There are 56 million of them. They have billions to spend every year. They're between 10 and 22 years old. They're online, and they have access to credit cards. Say hello to Gen Y. "There's plenty of room for competitors in this space; it's a huge demographic with a lot of spending power," says Matthew Diamond, 32, CEO of Alloy Online Inc., a New York City-based site he founded in 1996 with COO Jim Johnson, 32, and built into a top Gen Y portal.
There's more to succeeding with a teen site than running *N SYNC contests and selling hip clothes. While Diamond sums up Alloy.com as "a teen community, content and commerce media company," the company also has an offline approach that includes a printed Alloy catalog, a teen book imprint, a wireless strategy and an interactive TV partnership with Liberty Digital. Each of these directs teens back to the main Web site, where products and ads drive revenue. "We thought it was very important to build an offline presence and then focus on very high margins," explains Diamond.
With 2.6 million registered users, Alloy seems to have a good understanding of what the Gen Y audience is looking for in a Web site. It takes a cool combination of young celebrities, fashion and make-up tips, dating advice, gear for guys, chats and contests.
Diamond has one main piece of advice for entrepreneurs looking to break into the online Gen Y market: "Build your brand," he says. "If you don't have a brand that everybody's going to know, you're not going to succeed as a Web site."
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