Jeff Sherman and Andy Tarnoff founded the company and its award-winning web site in 1998.
Their original investors, whose names are not disclosed, are cashing in their investments in the company.
Sherman and Tarnoff recently explained their goals for reaching the next level by selling their company or attracting new investors in an exclusive interview with BizTimes executive editor Steve Jagler. The following are excerpts from that interview.
BizTimes: I understand your company is at a turning point. Can you tell us what is happening?
Sherman: "We're engaged in a process to find the right partner to help us expand our reach and grow our core business while extending our services into consulting, more development and niche publishing. After almost 15 years, our investors are looking for an exit strategy, which is OK with management, since we're also looking for new opportunities to continue to fuel our current growth."
BizTimes: So, in an ideal world, what will happen next?
Tarnoff: "Our initial investors are ready to move on, and we're looking to replace them with a complementary publisher, digital business or another savvy investor who can bring continued vision, energy, communities and capital to the table. On one hand, being a completely independent media company in Milwaukee is great; we're free to innovate with few restrictions. On the other hand, we'd love to have additional opportunities, resources and markets available to further realize and accelerate our growth potential. We're extremely proud of what we've built and how we've helped Milwaukee innovate. So, in many ways, the best is yet to come."
BizTimes: What are the other options for OnMilwaukee.com?
Sherman: "There are several options that we're currently evaluating. They include acquisition or a strategic alliance with a larger publisher or even an agency. We're also exploring opportunities for additional capital investment so we can acquire other properties and/or businesses."
BizTimes: Can the OnMilwaukee model be replicated in other metro markets, or did that window close?
Tarnoff: "We don't necessarily want to build another OnMilwaukee.com from scratch, but with the right media partner, we could easily rebuild and relaunch a news site, entertainment guide or a major broadcast media site. We just won the 2012 Editor & Publisher EPPY Award for 'Best Entertainment Web Site,' so we have the team and playbook for growing and monetizing the online portion of a partner's business."
BizTimes: Why do you believe OnMilwaukee would be a worthy investment for new investors?
Sherman: "We know media, and understand the digital space. We've grown the business exponentially since founding it in 1998, and through this growth have acquired much knowledge, a huge readership, amazing technology, an expert team and a marketability that's second to none. Not only did we build OnMilwaukee.com from the ground up, we've weathered difficult media climates with steady and consistent growth in both revenue and readership."
BizTimes: From a fiscal standpoint, how is the company doing in 2012?
Tarnoff: "2012 is shaping up to be the highest revenue year on record. This last quarter has been one of our most profitable, too. If there's a time to leverage success and 'sell high,' that time is now.
BizTimes: Where will your company's future growth come from?
Sherman: "It's all about content and context. Quality, engaged local audience is where we excel and what every good media entity wants. We'll continue to grow local and regional ad dollars, expand our list of national advertisers and targeted locals with a national ad product that we rep. We'll build on mobile and social. Then, beyond Milwaukee, we'll look to expand our consulting business. Since we own all of our intellectual property, including our own award-winning software, we can be a turnkey partner to the right publisher or entity."
BizTimes: Are you targeting any particular type of investor?
Tarnoff: "Regional and national publishers, and savvy digital pioneers who understand our unique situation with our investors."
BizTimes: Would you entertain a strategic offer from another media company?
Sherman: "Yes, and we're talking to several."
BizTimes: Do you have a time frame in mind, as far as finding an investor?
Tarnoff: "It could happen fairly soon. Per our existing investors' mandate, we're aggressively pursuing and fielding opportunities and offers."
BizTimes: In the meantime, can you keep your employees on the payroll?
Sherman: "Absolutely. We're still growing, and we plan on continuing to grow even if nothing changes on the M&A front. We've assembled the best digital team in the area. They're invested, just as we are, in making new media great media, and moving Milwaukee (and hopefully other markets) forward."
BizTimes: What is personally motivating you to make a change?
Tarnoff: "People ask me this all the time, but I really do love what I do. OnMilwaukee.com is the realization of a dream I had when I was 23, and now, it's a reality. We're a 15-person team that's built a $1.5 million company from scratch. Still, there's so much more for us to accomplish, and as a completely independent entity without access to more resources to realize these goals, it's challenging. I can't wait for the next phase of OnMilwaukee.com, when we can leverage what we've built and how we've changed the online media landscape in Milwaukee – and kick it into high gear. The team is in place, the groundwork is laid. I'm personally ready to give our business a shot in the arm."
BizTimes: Why explore M&A options now?
Sherman: "I'm extremely proud of the company we've built. In just over a decade, we've changed the media and marketing landscapes in a city that's often resistant and extremely slow to change. It's amazing what we've done, and now it's time to do it on a larger and/or different scale. Why sell? Personally, it's another leadership challenge that I want to tackle. Everyone needs change to fuel creativity and growth, and selling/merging our company creates new advantages and opportunities. It also will force new thinking that will benefit the new entity and us personally. As digital matures, we have an opportunity to export our knowledge, readership, advertisers and spirit into a new entity. Too many organizations are so far behind in the digital game, and we can help fuel their future and necessary growth with our playbook." n