Where are they now: iWon

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Editor's note: This is the final installment in The Industry Standard's Where Are They Now series, which looks back at some of the major e-commerce sites, online communities, and other Internet-based businesses from the late 1990s. Today's subject: iWon.com, a site that once epitomized some of the excesses of the first Internet bubble, but has nevertheless managed to survive to the present day under a retooled business plan and new ownership.

Founding: iWon.com launched in 1999, founded by Jonas Steinman and Bill Daugherty. Steinman had been a general partner at Chase Capital Partners, while Daugherty served as the NBA's senior vice president of business development. They were classmates at the Harvard Business School. CBS funded the pair with a $30 million loan and the promise of $70 million in advertising to get iWon.com started.

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History: If one company could sum up the cash craze and greed that marked the first Internet boom of the late 90's, it would be CBS's iWon portal. The site gave surfers cash prizes just by visiting the site and clicking links, hoping to generate leads in the process for advertisers. It was a powerful proposition in a market packed with sites struggling to survive.

The cash outlays were significant. As explained in a November 1999 Washington Post article, the site awarded a $10,000 prize daily, $1 million monthly and $10 million every April. According to the story, "Surfers [earned] up to 100 points a day for clicking on links, with each point giving them another contest entry. Every item on iWon.com [had] a tiny number beside it representing the number of points earned for clicking." As Daugherty put it, "The kernel here is that we will reward you for using us to do what you would do online anyway -- read the news or check sports scores."

iWon made deals with many Internet companies to supply "clickable" content. The companies included other sites that CBS had invested in, such as MarketWatch and Sportsline. Until iWon launched, CBS was the only major television network without its own "Web guide." In an October 1999 BusinessWeek article, analysts saw the plan as an attempt to create an umbrella brand or portal for CBS's various online properties.

Many were skeptical about the site's business model. It wasn't just the premise of handing out scads of cash to users. By late 1999, the all-in-one portals were losing their luster, and many would eventually fail. Questions were also raised about the quality of the audience attracted to iWon. A Jupiter Media Metrix analyst told CNET in October 2000 that advertisers might not be able to trust the leads that come through sites like iWon.

In the end, CBS failed to make iWon a central part of its online strategy. The high-powered giveaways were also scaled back. Nevertheless, iWon managed to weather the storm and is still around today.

What Happened: iWon has gone through a number of ownership changes over the past decade. CBS retooled its Internet strategy in 2001 and by 2002 iWon.com was back under the control of its cofounders as one of several properties operated by Interactive Search Holdings. In 2004, Ask Jeeves Inc. bought Interactive Search Holdings, including iWon. Ask Jeeves itself was acquired by Barry Diller's InterActiveCorp around the same time.

After taking control of iWon, IAC proceeded to make some changes to the site. In September 2007, a revised version of the site was launched focusing primarily on casual games to add stickiness. Before, iWon depended on users clicking links, but under the new site let users earn "coins" which could be traded in for sweepstakes entries.

Big prizes are still part of the iWon formula. Current sweepstakes include an annual $1 million prize, various monthly prizes, a $500 weekly prize, and a $100 daily prize.

The site had 3.8 million unique visitors per month, according to comScore's March 2009 data cited on the IAC website. IAC did not break out the revenue for iWon in its 10-K reportfiled with the Securities and Exchange Commission in March, but did say "the impairment at the Media & Advertising segment primarily resulted from the decline in revenue and profitability in IAC Search & Media's Excite, iWon and MyWay portals businesses." IAC declined to provide revenue or profit figures for iWon or discuss future plans for the site with the Standard.

Where Are They Now? The Industry Standard was unable to track down Jonas Steinman or Bill Daugherty. The two were involved in the $343 million Interactive Search Holdings acquisition by Ask Jeeves in 2004, and were "expected to be retained" after the takeover closed. IAC, which now owns both Ask and iWon, declined to answer any questions about Steinman or Daugherty when contacted by The Industry Standard, but described them as "former" executives.

This story, "Where are they now: iWon" was originally published by The Industry Standard.