Amateur Sports Sites Jump-Starting Vertical Business Models

Amateur sports and lifestyle services are great vertical categories that are generally worth many times more in their own wrapping than in a magazine, newspaper or Yellow Pages.

Active Networks, whose leadership and original funding have some roots from IAC, has been a longtime leader in the space. Mostly, it’s focused on the reservation category for sports events — a platform that it has extended to nonprofits and others. It also does data mining of the athletic minded for brands from power bars to heart monitor watches.

The 800-employee company has been on an acquisition tear of late. This week (per peHub, which I saw via PaidContent), it announced $65 million in new funding, atop $107 million from previous rounds (which included ESPN).

Another amateur sports and lifestyle venture I’ve been watching is Steve Outing’s Enthusiast Group. Outing, a leading media analyst and columnist, and avid mountain biker, teamed up with other passionate sports-minded people in the Boulder area to create the Enthusiast Group. The idea was to build sites for amateur sports such as biking, climbing, running and “horse sports.”

After a year-and-a-half, the company has been getting some promising participation from athletic vendors, which had sponsor various local events with the company. “We did a series of six 24-hour bike races around the country,” says Outing. “We recruited grassroots correspondents, they took photos, video … it was fun coverage. And the race organizers gave out free entry tickets.”

But an advertising-supported model has proved to be something of a pipe dream. Outing says the company is currently in transition from an ad-supported service to a platform provider. Although some of his sites are getting 100,000 page views a month — a pretty good number — Outing has concluded that social vertical sites need a solid partner, with a good brand, existing relationships and users.

He thinks the company’s social networking component will bring a good balance to media properties, like magazines. And/or brand companies, like Merrill shoes or Vitamin Water or the equivalent.

“When we started, we were thinking of applying a traditional publishing model — build an audience, supported by advertisers — to grassroots media and tight niches occupied by passionate enthusiasts,” says Outing. “While we’ve gained some nice traction, the communities take a while to build.

In any case, the revolution in social networks has changed the product. “As we watched the sites evolve, the behavior shifted from merely sharing and communicating with fellow enthusiasts online, to physical communities forming from people who met for the first time on our sites,” notes Outing. “For instance, climbers often find each other on our yourclimbing.com site and then hook up for the climbing dates and parties.”

The communities are also, surprisingly, driven by something of a celebrity presence — athletes that others look up to in their specific categories. Katie Brown, for instance — a world champion rock climber when she was in her teens — has a huge following among the rock climber crowd.

“In the past, these types of people would get endorsement deals” from companies like Patagonia,” says Outing. “You’d see pictures. Maybe a description of an adventure. But they were really untouchable” by the fan base.

But now they can really interact as “blogger ambassadors” with discussion boards, photo sharing, instant messaging, etc. “You have to have personality at the core of these things,” says Outing. “You have to tap people’s desire to talk with each other.”

Are these things local? Outing says they’re actually national sites first, with local coming on the back end. “We have a huge base of rock climbers in Boulder,” he says. But aside from calendar listings, most of the content and discussion is national. Eventually, the local stuff will scale better, dealer networks will localize, etc.

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