• by May 5, 2006

Does it seem lately as if babies are slithering forth into the world at breakneck speed? Popping their furry little heads up and out like sprouts poking through the damp earth in early spring? Sure seems so to this here Minute, who knows of at least three recent births and two sets of twins on the way.

There is, of course, a great market opportunity in pregnant women and new parents--and the folks at Kaboose Inc. are now poised to capitalize on it. In case you didn't hear, the Toronto-based kids and family portal earlier this week snapped up BabyZone.com, a pregnancy and parenting Web portal, for a cool $22 million plus $2 million Kaboose warrants. In addition, the choo-choo company also signed an agreement to acquire Two Peas Inc., an online scrapbooking company, for $600,000.

The folks at Kaboose were so excited about the acquisition, they called to crow about it. BabyZone, which claims 2 million unique monthly users, achieved $4.3 million in revenue last year and expects to rack up sales of $8 million this year. Kaboose will use the acquisition of BabyZone to bundle properties and ratchet up its ad sales offerings, spanning the life cycle from birth to young teens. The company says only Disney and Viacom have bigger kids and family offerings.

"We've been the largest independent online media company in the kids and family space," Jonathan Graff, president of Kaboose, told me this week. "We were strong in the moms with kids ages 3 to 12, but we saw an opportunity to go younger, into the pregnancy and parenting space, and we thought we'd have a very unique position."

Graff says Kaboose saw the pregnancy, infant, and toddler segment as a key piece of the life cycle. "What was really attractive was the ability to reach moms at a significant trigger point in their lives, which is the birth of child. With BabyZone, you can reach them at a time of need and change in their lives. It's when they build brand affinities."

BabyZone, a well-respected and well-known brand, will enable Kaboose to forge closer relationships with mothers and develop more targeted offers. Still, it's not clear yet whether the BabyZone brand will remain a significant presence online and in terms of editorial content. The only other big player in the baby space is BabyCenter, owned by Johnson & Johnson, the people who brought us those gorgeous commercials with the tag, "Having a baby changes everything."

Graff says that for the next year or so, the BabyZone brand will most likely remain intact: "It's a fantastic brand in its space, there's a lot of awareness and loyalty and trust built up. But it's a Kaboose company, so we would look to leverage BabyZone's local content within Kaboose.com itself. We would look to migrate BabyZone registered users to Kaboose when the kids are older."

Kaboose itself claims more than 2.5 million registered users, almost exclusively mothers ages 25 to 35. When that traffic is combined with BabyZone's, it has the potential to spike to nearly 10 million uniques per month during the peak period from September through December, according to Graff.

Too, Graff is excited about the potential for video content vis-à-vis BabyZone, which he says will launch on the site soon. As for ad deals, BabyZone brings Kaboose more in the way of long-term plays--six-, nine-, and 12-month deals with clients. There's the potential for "significant advanced buying," he says.

"With respect to cross-platform media deals, we don't have media assets other than our online assets. But for Kaboose, cross-platform means branded advertising, sampling, and e-commerce," Graff adds. Since BabyZone has local content and sales in 80 markets, there are plenty of e-mail and direct marketing opportunities, as well as affiliate revenues. Relationship marketing and data capture are both part of the mix.

So go, baby!