Sweet times for Web business for women

By DONNA KATO

The Sugars quit their day jobs to devote themselves to their startup.

SAN JOSE, Calif. — A husband and wife team with the serendipitous surname of “Sugar” may have found the recipe for successfully combining content, e-commerce and social networking on a site that attracts a most attractive demographic: women ages 18 to 44.

Brian and Lisa Sugar are the founders of San Francisco-based www.sugarinc.com, an online media company with a network of channels focused on specific topics that draw women.

The enterprise started as a hobby in 2005 with PopSugar, a blog devoted to celebrity news and gossip. The hobby became a business, which then spawned FabSugar for fashionistas, YumSugar for foodies, BellaSugar for beauty addicts, GeekSugar for techies and CasaSugar for home decor devotees.

In three years, the brand built on a sweetly clever name play has grown to encompass 17 live sites employing about 80 people, most of them content producers who write in a breezy, chatty style that’s become the hallmark of blogging.

“We’re trying to be a lot of different things,” said Brian, 34, chief executive of the company whose last job was vice president of marketing for 2Wire in San Jose, a provider of broadband service delivery platforms.

“As a media company, it’s important to create content that your audience wants.”

The company said its various Sugar sites have 8.5 million unique visitors as measured by Quantcast, and more than 60 million page views, according to Google Analytics. Ninety-six percent of the visitors are female and the median age of visitors is 26 years old, Brian said.

It was Lisa’s obsession with pop culture that was the foundation of the Sugar empire. A media buyer for advertising company Goodby, Silverstein and Partners in San Francisco, Lisa, 31, was an avid follower of entertainment developments and celebrity dish, and a self-styled blogger on hot Hollywood topics. PopSugar was launched after the March 2005 Oscars Red Carpet parade.

With the increasing popularity of the site, the Sugars did what Silicon Valley workers used to do with abandon: Both quit their jobs and devoted themselves to a start-up. Not even the impending birth of their first child gave them doubts that they were on the right track.

“My last day at 2Wire was May 12, 2006,” Brian said. “Katie was born on June 1.”

They invested about $250,000 of their own money and hired bloggers to keep the posts fresh.

“We were creating content every hour,” Lisa said. “Immediacy — that’s the format. Without rapid content, we lose viewers.” The bloggers, meanwhile, were trained to write as if “they are sitting around talking to girlfriends,” she said.

Unlike pop/entertainment/fashion Web sites such as GoFugYourself or TMZ that thrive on snarky commentary, the posts on PopSugar were, and are, mostly gentle observations with lots of photographs of stars.

“The audience feels safe and advertisers want to be associated with goodness and positivity,” said Lisa, now editor in chief of Sugar.

In October 2006, the company secured $5 million in funding from venture capital firm Sequoia Capital and grew to 35 people.

Advertisers came next, along with NBC Universal, which invested $10 million in exchange for the right to sell ads for the site and 50 percent of the revenues derived from advertising sold on the various blog channels.

Last month, the Sugars severed that arrangement in favor of selling their own ads with their own sales staff, though NBC Universal remains an investor.

Their site underscores the draw that women have with advertisers, something Comcast also realized when earlier this month it bought New York-based Daily Candy, another lifestyle Web site with a large female following, for a price rumored to be between $75 million and $125 million.

PopSugar’s sibling sites — all linked to each other by a site map on the home pages — were born in quick succession along with a United Kingdom version of PopSugar and FabSugar specific to British stars, style and sensibilities.

While social networking has been a big part of participating on the Sugar sites, the e-commerce component didn’t exist until the Sugars bought Los Altos, Calif.-based ShopStyle about a year ago for an undisclosed price.

That site enables viewers to shop for goods from about 150 retailers, which pay the Sugars a per-click fee when viewers go to a particular store’s online site from ShopStyle. About two-thirds of Sugar’s revenue comes from advertising, and the rest from commissions and revenue sharing from ShopStyle.

TechCrunch, the popular valley blog that profiles and reviews new Internet products and companies, estimates that Sugar has ad sales of $10 million a year.

Last year, Sugar acquired Coutorture for an undisclosed price. The site is described as “the leading network of independent style publishers online.”

It’s an online fashion community of 230 style-related Web sites and blogs. Sugar also recently picked up Starbrand Media, a company that creates shopping tie-ins with TV shows. Terms of that deal also were not disclosed.

The heart of the Sugar operation is inside the pink and blue offices on the 15th floor of a building on Sutter Street in San Francisco’s financial district.

FabSugar and BellaSugar, the fashion and beauty sites, have editors in New York. The employees are mostly women, mostly young, giving the office the vibe of a Northern California Conde Nast — the New York publisher of women’s magazines, including Vogue.

Sugar readers, in fact, are similar in demographic to those who read the glossies.

“Sugar is a place where women can escape and be a fashionista or a celebrity gossip hound or a foodie,” said Brian. “It’s a place where alter egos can come out.”