Web site for Generation A targets Americans over 50

JERUSALEM — Generation A's staff is determined to prove that the world really is a global village.

Its Web site, which targets Americans over 50, is run from two continents.

Sales and marketing happen in the United States. The management of all the content, and indeed some of the writers, are in Israel.

At first glance the whole premise of the site — www.generationa.com — seems unfeasible. What can young Israelis, even if they were born in the United States, know about the experiences of a retiree who lives in Florida and likes to knit or play golf?

The answer is a great deal, judging from the response of users, most of whom are unaware there is any Israeli connection.

The site was launched in November and now has 45 staff members, including writers. It has also managed to attract some high-profile writers, as well as celebrities like the Bay Area couple Michael Tucker and Jill Eikenberry, who will act as the site's spokespersons.

Nevertheless, the question remains, why Israel?

Stephen Steiner, the 31-year-old president, CEO and co-founder of Generation A, says it was a natural decision because he is based in New Jersey and his business partner lives in Jerusalem.

That partner, Elie Wurtman, is the founder and chairman of the board at Deltathree.com and founder of Ambient Corp., a specialist in "smart card" technology.

Before founding Generation A, Steiner served as executive vice president and chief operating officer for RSL.Com, a telecommunications operator with a market cap of $1 billion. Wurtman also worked for a time as vice president of emerging technologies for RSL Communications.

Both men noticed that the fastest-growing segment of the population joining the Internet was the over-50s crowd. In the United States, that translates into more than 80 million people.

The pair examined the experiences of their own parents, who had just logged on to the Net and were excited about the potential. Steiner and Wurtman realized that the age group, despite its high spending potential, was underserved.

"We saw a market opportunity and realized we had to do it quickly," Steiner says.

The next decision was where to work. "We sat down and thought about where we could get this done efficiently, and cost was an integral component of our decision," says Steiner.

"In the U.S. there are certain things you pay a lot more for, like writers. In Israel there are some talented writers and they're a little less expensive and just as good, if not better, than in the U.S., from what I've seen."

At the same time, Israel offered the company access to a number of technological developments and, of course, was the home of Wurtman, who has extensive contacts in the high-tech industry.

In July, the company raised $1 million in its first round of fund-raising from friends and family, and the hard work of setting up the site began. Soon afterward, the company appointed Aimee Rhodes, a journalist who had worked for some years for Reuters in Israel, as the site's content manager.

One of the first decisions was the name of the company and site. Inspired by Generation X, the management coined the term Generation A.

"Generation A is the first generation," Rhodes says. "It's all about achievement and ability. These people have a lot of experience and have much to offer that we can tap into."

With the distinct flavor of a magazine, the Web site offers a wide range of feature articles in areas such as finance, health, travel, technology and family. There are also chat lines, tools to create online communities, and e-commerce links. The Web site even has its own online drug store.

Unlike many Web sites that are dense with links and information, Generation A is presented in a clean and simple fashion that makes it easy to navigate and understand.

Though at present it doesn't contain many links to other Web sites, Steiner says this will change in coming months as the site develops.

"It's a one-stop product for Americans over the age of 50 on the Internet," says Rhodes. "We are an interactive online community. Users can connect to family, meet new friends, form new clubs with people who share similar interests. We're trying to give these people a place where they will never be lonely and there will always be things to do. We want to build a community environment, a home for these people."

Steiner refutes claims that the site will be out of touch with its targeted audience.

"We don't have that problem," he says. "Our writers are all Americans and Europeans, and we get a lot of feedback from them and from our focus groups."

The site is just beginning to market itself. This spring, it will kick off a major marketing campaign in television, radio and print.

The company is also planning to raise $20 million in a second round of financing by the end of this quarter. If all goes well, the company is considering an initial public offering in the first quarter of 2001.

Generation A is not the first Web site to create global content from Israel. WholeFamily.com is an Israeli-based site written in English that focuses on family relationships. This site has already attracted the attention of some big U.S. players.

Yoni Hashkin, managing partner of Netlaunch, an Internet innovation center set up by venture-capital fund Jerusalem Global to help start-ups, believes that these two sites represent a new business model in the world of Israeli technology.

"Most people assume that Israel's advantage in technology means that R&D should be created here and business and marketing carried out in the U.S. That's the clear model today, but maybe this proves there can be a different model," he says.

"If you'd asked someone beforehand whether this model would work most people would have said no. But if it actually does work, then you can't disagree with the facts. It just adds more power to the Internet and its ability to be location-independent. More people are using the Internet to work from home or in rural areas. Now they can work in another country.

"I'm highly impressed that it's happening," he adds. "It's a great sign."

When it comes to making money the company has two main strategies.

First, it wants to generate revenues through e-commerce. The company has also signed a deal with a major pharmaceutical company to set up a discount drug store on the site. Users can fill prescriptions as well as buy products like shampoo or razor blades.

Second, the company aims to make money from advertising and sponsorship. At present on the Net, there are very few companies that actually manage to make a profit from advertising, but Steiner says this is because his site's main focus is on getting as many new users as possible.

"The idea is to get the eyeballs," he said. "When you slow that process down many companies will become profitable."

Though the site does aim to attract traditional banner advertising, it also plans to find corporate sponsors for its different sections. The travel section, for instance, could be sponsored by a cruise company. Steiner is looking for contracts for a minimum of one year.

"There's tremendous potential in sponsorships because of the demographics," says Steiner. "We believe that for us advertising can create substantial revenues."

One of the main advantages is that the population the site is aiming at has more disposable income than virtually any other segment of society. They also have more leisure time.

For instance, 80 percent of all luxury travel is purchased by people aged 50 and over, Steiner says.

As with all good ideas, Steiner and Wurtman are not the only people to understand the potential.

There are at least two other Web sites out there trying to appeal to a similar audience. These include ThirdAge.com and AARP.org

Steiner believes, however, that Generation A has a unique strategy.

"There are 80 million people over the age of 50 in the U.S. and only about 10 million of these are online. Our strategy is to begin offline. We are building strategic relationships with Internet cafes and retirement communities — places where we can reach our demographics through a grassroots campaign. We will sponsor Internet training at these places and provide them with access to our site. We plan to build loyalty and a brand-name offline, to strengthen our position online."

The company also intends to harness celebrities to create more interest in the site. "These celebrities are not just smoke and mist," Steiner says. "They actually write content and moderate chats."

Overall, Steiner is pleased with the decision to work in Israel.

"It's enabled us to do a lot of good things very quickly from a technology and content stand point. The Israel connection has really worked in our favor."