EARLIER THIS SPRING, WHEN FOOTBALL LEGEND EMMITT SMITH appeared on the NBC series "Who Do You Think You Are?" to search for his family's roots, nearly seven million Americans were tuned in when he learned that his ancestors included not only slaves but also, in all probability, a Virginia slave owner. Genealogy had gone mainstream -- and Ancestry.com had gone prime time.
The company, a sponsor of the series and operator of the largest commercial Website for researching family roots, said that tens of thousands of new visitors headed for its site as a result of the Smith episode. And that was only the latest growth surge; the site now boasts more than 1.2 million subscribers.
The pursuit of genealogy, once the province of local libraries and historical societies, has become a booming business because of, well, the boomers. With their seeming unquenchable thirst for personal experiences, some aging baby boomers are clamoring to find their earliest forebears, helped by the sea of data available on the Internet. By some estimates, genealogy is the No. 2 American pastime, trailing only gardening.
That presents a world of opportunity for Ancestry.com, which went public last year and now has a stock-market value of $731 million. If CEO Tim Sullivan is right, the company is on its way to cementing a role at the very center of the genealogy craze.
"In the same way that Netflix is the destination of choice for people renting DVDs, as Amazon.com is for book buyers, I'm confident that the growing numbers of those who wake up and realize their interest in this will find their way to our doorstep," says Sullivan.
The company charges people at least $13 a month for annual memberships that give access to some four billion records, such as birth certificates, draft cards and ships' passenger lists. Last month, Ancestry reported that its total of subscribers had jumped 48% in the first quarter from the year-earlier level, while revenue per subscriber edged higher.
Ancestry.com thinks it probably will generate more in earnings than originally expected in 2010 -- as much as $95 million, up from previous estimates of $85 million, once the upfront cost of backing the NBC show is offset by the revenue from all those budding genealogists.
That all bodes well for the stock, which has been changing hands around 17, up from 13.50 at the IPO. If the growth continues -- and overseas markets look especially promising -- the stock could hit 19 within a year, says Piper Jaffray analyst Gene Munster.
IT IS NO ACCIDENT THAT ANCESTRY.COM is based in Provo, Utah, not far from the Mormon Temple in Salt Lake City. Members of the Church of Jesus Christ of Latter-Day Saints are enjoined to research their family history as an article of faith, and some employees and backers of Ancestry.com are members of the church.
The vast holdings of the church's Family History Library have made Salt Lake City the undisputed capital of genealogical research. Just last month, the city hosted a National Genealogy Society conference that drew a record 2,865 attendees. They thronged the exhibitors' hall, wiping out stocks of everything from family-tree charts to T-shirts emblazoned with logos like "I seek dead people."
Jan Alpert, president of the society, is a study in just how addictive genealogy can be. She is working with a professional genealogist her late father hired in 1981 to learn about their family, the Nutters. "Here I am, nearly 30 years later, still paying him to hunt for the right members of the family," she says, " although I've helped a lot of other Nutters connect with each other along the way."
Unfortunately for genealogists and companies in the field, many newcomers aren't so willing to pay up, and mountains of data are available free. The church itself is a ready supply of free information through its FamilySearch Website. Those who make the trek to Salt Lake City can spend hours getting help from a swarm of eager volunteers at the Family History Library.
But Sullivan argues that the free material simply helps newbies and converts many from casual researchers to avid, paying amateur genealogists.
And, he adds, few subscribers opt out after having made their first round of discoveries. "Our lowest rate of churn is among those who have been our subscribers the longest," he says. In fact, the overall monthly churn rate fell to 3.3% in the latest quarter from 4.3% a year earlier.
Says Sullivan: "We are building a platform to serve multiples of the users that we have today. We believe there are many millions of subscribers still out there to acquire, and our challenge is to keep adding the resources, the data and the features to the site that will attract them in the first place and keep them coming back."
He has a big factor in his favor. As genealogical researchers know, even with the Internet, it can take years to unlock the mysteries of a family.
The Bottom Line
This stock, which has climbed from 13.50 at its IPO last year to around 17, could rise another 12% as subscriptions surge and revenue per subscriber edges higher.