Part 2: Surviving the market and offline ediets program

How do you plan to be a dot.com survivor when so many online companies are folding their tents?
We have employed a subscription based business model from our inception, which has been the key to our success and longevity. Our continued growth even in a slowing economy supports our belief that the online model of the billion-dollar diet center business is superior to the offline model, in that personalization, convenience and privacy are powerful consumer benefits that are difficult to replicate offline.

The Internet-based distribution and subscription model allows us to maintain strong cost controls for member acquisition initiatives and operations, and we retain members for a significantly longer period of time than our offline competition.

In addition, eDiets is expanding into international markets with programs tailored to the unique needs of each region it serves, having already launched throughout the UK and Ireland - the first step in our long range plan to become the world's foremost nutritional advisor.

You also offer a service that is available offline. Considering that you are a niche online site, how do you compete with already established companies in the diet industry?
Consider the basic economics of an online company versus thousands of offline, brick-and-mortar diet centers. Jenny Craig and Weight Watchers have hundreds of centers to manage, while eDiets only has one. Further, Jenny Craig and Weight Watchers only set up centers where it's financially sound to do so, while eDiets is available to anyone, anywhere with an Internet-enabled computer.

Paying members stay with the eDiets program an average of six months. This is double the time dieters typically devote to traditional walk-in programs. Simply, the efficiency and consumer benefits of delivering a diet service online are substantially greater than the services popularized by offline diet companies.

In addition, eDiets has established both advertising relationships and co-branded diet centers with the Internet's leading brands (AOL, iVillage, etc.), which are the gateways to our target audience and a major source of revenue, in addition to our newsletter circulation base of over 5.6 million subscribers.

Further, your revenue sources are somewhat different than typical offline diet centers. How much do you rely on banner advertising as opposed to revenue from subscribers?
In order to provide quality health information, news and tools in a timely manner to our visitors, eDiets.com permits advertising on our site. However, we do not allow outside advertisers to affect the quality or accuracy of information on our site, and we maintain a stringent policy of editorial independence.

While advertising does provide the company with an additional revenue stream, we will continue to use the member subscription model as our primary source of revenue. Currently, banner advertising accounts for less than 5% of our revenue, with subscriptions equating to 90%+.

What are your plans for the next twelve months to continue this success?
eDiets will continue to enhance and refine its domestic offering, while simultaneously expanding into international markets with the initial focus on our recently launched business in the UK and Ireland.

In addition, we will ramp up our diet program geared specifically for the needs of men, will further expand our personalized fitness programs, and will continue to develop critical strategic partnerships.