Using Web savvy, alum makes it big

As a freshman, Josh Kopelman seemed like a typical Penn student.

From Long Island with an interest in business, Kopelman became a member of Wharton’s Class of 1993, concentrating in Entrepreneurial Management and Marketing.

But by senior year, when his classmates were going from job interview to job interview, Kopelman was giving them.

Kopelman, now 29, co-founded the information-services company Infonautics during his junior year at Wharton when the modern, commercial Internet was still being born.

“No one at school had an e-mail address,” Kopelman remembered.

Infonautics started out producing publication databases for the K-12 market, eventually generating the largest collection of such databases.

But Kopelman’s personal interest in technology went back to his high school days, when he and a friend ran a BBS, an early dial-in online service.

“I’ve always been a geek,” he joked.

Kopelman came up with his next big idea in July 1999, leaving Infonautics with a $280,000 investment to start a new company: Half.com.

The company’s Web site allows individuals and merchants to sell books, CDs, movies and videogames online at up to half their original price.

Rather than a traditional auction format, Half.com uses fixed prices and a massive database to standardize item descriptions. The site also handles the transactions, taking credit card numbers from buyers and paying sellers on a monthly basis. The company takes a 15 percent commission on each sale and also makes money through shipping charges.

“[Auctions are] really great for selling one-of-a-kind merchandise, but it really wasn’t the right model” for more common items, Kopelman said. “When you walk into the Gap to buy khakis, you don’t start bidding against the guy next to you.”

Kopelman sees the site eventually allowing for the sale of other items, possibly including electronics, toys, computers and even cars.

Kopelman quickly raised more than $20 million in venture capital for the site.

The company, headquartered in Conshohocken, Pa., promoted its site aggressively prior to its launch, but one unusual effort really put the site in the spotlight the day the site was launched.

“We wanted to pull a stunt,” Kopelman explained.

After telling his marketing team five times to “do something to put us on the map,” Kopelman’s staff decided to take his direction literally.

The company convinced the town of Halfway, Ore. — selected for its small population of about 350 people — to issue a proclamation changing its name to Half.com for the year 2000.

In return, the town received — for $75,000 — 20 computers for its elementary school and Web hosting services for town businesses.

Though some criticized the deal, it definitely brought attention to the young site. The “stunt” got Kopelman’s company noted in over 150 million print impressions, and received a considerable amount of attention online and on television, including an interview with the Today Show’s Katie Couric.

Within 100 days, the company had 100,000 registered users.

Twenty days after the site’s launch, online-auction giant eBay called. In June, just 143 days after the site’s premier, eBay purchased Half.com for at least $312 million in stock. The company remains in Conshohocken as a wholly owned subsidiary of eBay.

The eBay deal boosted the site’s profile even more. Kopelman says that sales are currently doubling every 60 days.

The site gets more traffic than Barnes & Noble’s Web site — at the time of the eBay purchase in June, it was already the 18th most frequently visited e-commerce site, according to tracking firm PCData.

“It’s very surreal,” Kopelman said. “We started this thing to build a great company. [We] never thought it would go so far so fast.”

Kopelman said he believes his Penn experience clearly helped him in the business world.

“The curriculum, the professors, the network, alumni. I think Wharton was a big help,” he said.

Marketing Professor Peter Fader, who advised Kopelman on an independent project, called his former student “pretty visionary.”

“I think it’s not just a matter of being in the right place at the right time,” Fader said. “He’s been staking out this turf since a lot of these people were [just] out of diapers.”

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