The Santa Clara, California, start-up has 54 affiliates in 26 states and is buying affiliates in San Francisco, New York City, Washington D.C., Philadelphia, and Orange County, California, as reported yesterday by CNET's NEWS.COM. At the same time, it is adding franchises in Seattle, Pittsburgh, Austin, Texas; and Irvine and Laguna Beach, California, executives said.
"Our aim is to build the next EDS or Andersen in the next five years, rather than over decades," said Toby Corey, USWeb's executive vice president of marketing. Corey said that buying up the affiliates will accelerate the process and increase efficiencies.
The affiliates' management team will continue to run day-to-day operations. The privately held company, founded in 1995, still plans on delivering its Internet, intranet, and Web consulting services through its franchises.
With $17 million in capital, USWeb set out last April to conquer the professional Web market by offering franchises to already-established Net businesses. Affiliates pay a $50,000 initiation fee to join USWeb and pay more than 7 percent of gross revenues to the company.
Franchises are supported by the parent company with shared technology research and services, products such as accounting forms and discounted business supplies, continuous education, and marketing support.
Joining a chain may seem like a great opportunity for Web start-ups that are starting to feel the shakeout of the great Net boom. USWeb provides marketing clout and money--not a hard sell for companies that are often brimming with talent but struggling financially.
USWeb's revenue model isn't shabby, either. For the basic corporate Web site, USWeb charges $20,000 to $100,000. For intranets, what USWeb calls "business-critical" sites, it charges $50,000 to $1 million. And for "mission-critical" sites, which are used for internal financial systems or customer service networks, USWeb charges $500,000 to $3 million.
In another phase of its three- to five-year business plan, USWeb plans to expand internationally. Previously targeted countries were Japan, Singapore, Germany, the United Kingdom, France, Australia, and New Zealand.