Ancestry.com Boosts Its Subscriber Family By 31%

Ancestry.com (ACOM), the world's largest online genealogy resource, is seeing signs that its business is moving beyond a lucrative niche and into the mainstream.

The public's interest in learning their family history is growing thanks to social networking and the NBC reality TV show "Who Do You Think You Are?" Ancestry is a sponsor and an expert resource on the show, which tracks the family histories of celebrities such as singer Lionel Richie and actress Kim Cattrall.

On the social networking front, Ancestry is looking to leverage Facebook communities more to build interest in its subscription service.

Ancestry late Thursday reported better-than-expected subscriber growth in the fourth quarter. It ended the year with 1.4 million subscribers, up 31% from Q4 2009, and up slightly from the third quarter. It had forecast 1.38 million subscribers.

The Provo, Utah-based company earned 25 cents a share, up 25% from the prior year and matching Wall Street's estimates, for the quarter ended Dec. 31. Ancestry posted sales of $82.7 million, up 38% from a year earlier and slightly better than analyst forecasts.

Hard To Gauge Long Term

It also guided analysts higher on revenue and subscribers for the current quarter and full year. Ancestry expects to end the year with 1.7 million subscribers, up 22%.

Ancestry.com CEO Tim Sullivan said the company has good visibility into subscriber growth over the next few quarters, but it's difficult to predict the ultimate size of the market.

"The real question is: Is this a 2 million, 3 million, 5 million or 10 million subscriber category?" Sullivan said in an interview Friday. "We're more optimistic today about this being a potentially very large market opportunity than ever before."

Ancestry hopes to get a boost from the second season of "Who Do You Think You Are?" which began airing Feb. 4. NBC announced Tuesday that it had picked up the show for a third season, likely to air in early 2012.

The first three episodes this season have averaged 6.6 million viewers, making it NBC's top-rated Friday show this year, Sullivan says.

Ratings are up 9% over last year, which should help with Ancestry.com subscriber growth, Heath Terry, an analyst with Canaccord Genuity, said in a research report.

Ancestry is established in five markets: the U.S., U.K., Canada, Australia and Sweden. It has an emerging presence in Germany, France and China.

Company goals for this year include improving the experience for new subscribers, expanding its Facebook presence and developing apps for tablet computers and smart phones.