Good afternoon.
I'm Scott Turicchi, the President and CFO of J2 Global and welcome to J2 Global's first ever Analyst Day. We're going to be soon celebrating our 25th anniversary as a company later this year. Last year, we celebrated in this very building our 20th anniversary as a publicly traded company on NASDAQ. So welcome to all of you that made it here today in New York City. We're pleased with the attendance since you got through the coronavirus incidents and for all of you that are participating via the audio and webcast.
We are going to be reaffirming our guidance today which we gave a few weeks ago. So we have the safe harbor for forward looking statements and some risk factors. You're actually not going to hear much from me today. A lot of you I've interacted with over the years, but this is really an As I mentioned, we're going to go from 2 to 6 without interruption. As I mentioned, we're going to go from 2 to 6 without interruption.
I'm going to spend the first few minutes here with going through the agenda and then walk you through some high level financials. I will then introduce Nate Simmons, who is the President of our Cloud Services division. He'll be followed by Steve Horowitz, the President of Ziff Davis followed by Dan Stone, the President of Everyday Health Group then Sean Alford, the President or the Executive Vice President of J2 Acquisition System, Lilly Corporate Development. That will follow then with a fireside chat with our CEO, Vivek Shah, which the questions will be led by Dan Ives, one of our research analysts that's covered us many years. Then finally at 5:30, the whole management team will reassemble and we'll do a Q and A for those of you in this room.
For those of you that are local here, we'll break at 6 o'clock for cocktails. I'm going to take a step back, particularly for those that maybe don't know much about J2 or those that think they know a lot about J2. And I want to hit sort of 5 points that we think are really important in understanding the J2 story. What's happened over these 25 years? We've assembled a very rich diversified portfolio of internet brands spanning from cloud services into digital media.
And they have all leveraged in varying degrees the shift from analog to digital technology, which is very much still ongoing. The other element of everything we do is we believe in high recurring revenues. About 62% of all of J2's revenues are from subscriptions, whether they're in the cloud side or the media side, but even our advertisers have a very high renewal rate. As a result, we've consistently grown revenues. In fact, every year this company, but for its 1st year, has had an increase in revenues year over year.
We've also been very good at managing to get great EBITDA generation and earnings to the bottom line. This is done in part that we call our programmatic M and A system. We'll give you some data and statistics today to show this has been very successful over a long period of time. What does this all do? It creates a lot of free cash flow that we at the parent then look to reinvest in our capital allocation activities, which primarily means reinvesting back in the businesses for M and A, but it does also mean returning capital to shareholders through our stock buyback program.
This slide has a lot of information on it.
What I believe we want
to draw your attention to is in the upper left hand corner. If we look at the last 10 years, this company has grown at an average compound growth rate in revenues of over 20%. And in 2010, the business was substantially all what we call one business unit today, digital facts, that $255,000,000 revenue versus the year we just closed where we have 13 business units managed through 3 divisions and we had $1,372,000,000 of revenue. But as good as the revenue growth is, it's got to translate into profit, which is on the chart below. Dollars 133,000,000 of EBITDA 10 years ago, just over $550,000,000 in the year just ended.
And even that's not good enough. That EBITDA is going to translate into real free cash flow, which you see on the lower right hand chart. That conversion rate is in the low 60s to the high 60s year in and year out, meaning the conversion of our EBITDA to free cash flow. And finally, in the upper right hand corner, this is one way of looking at the success of our capital investments, predominantly M and A, but also the CapEx that we make back into the businesses, averaging in excess of 20% over this timeframe and in some years even well in excess of that. We think that's a phenomenal story.
Now as you know, our businesses are amalgamated for purposes of reporting into 2 segments. The Digital Media segment, which consists of Zip Davis and Everyday Health Group and Cloud Services. You'll notice that over the last several years since we acquired Zip Davis in late 2012, it's had superb growth both organically and through the judicious use of M and A, such that it's grown 33% compounded over this timeframe to $700,000,000 plus revenues at the end of last year. It operates on a target margin of about 35 percent EBITDA, which it achieved in 2019, generating $246,000,000 of EBITDA. Our cloud services business has been very consistent, just below a 10% CAGR growth ending last year at $662,000,000 of revs, generating a 50% plus EBITDA margin, so over $334,000,000 of EBITDA.
What I would note is that while the revenues are balanced last year between digital media and cloud, given the higher margin in our cloud services business, they constitute about 58% of the total EBITDA of J2. What you see beneath, but all the division presidents get into it much more detail, are certain select brands that map to our digital media segment and our Cloud Services segment. As I mentioned at the beginning, we're going to reaffirm our guidance. For those of you that are new to j2, we released our guidance in conjunction with our Q4 earnings call, which happened just a few weeks ago. And we guide to revenues, adjusted EBITDA and adjusted non GAAP EPS.
So to remind you all for this fiscal year 2020, we expect our revenues to be between $1,465,000,000 $1,505,000,000 our adjusted EBITDA to be between 575,000,000 dollars $595,000,000 and our adjusted non GAAP EPS to be between $7.36 a share $7.66 per share. And I would note, if you look at our GAAP versus non GAAP financials, the primary differentials are the exclusion in our non GAAP financials of the amortization of intangibles associated with our M and A program and non cash comp expense. Now, I've talked already a lot about M and A and its importance to J2. So one of the last points I want to convey to you before bringing up the division presidents is we have significant capacity for acquisitions actually in 2020 beyond. We start with our balance sheet.
So in real time, we have approximately $600,000,000 of cash, a large portion of which came from a financing we did late last year, which was the issuance of the 1.75 percent convertible notes. We also though look to our free cash flow in 2020. At the midpoint of our guidance range, we estimate that to be just shy of $400,000,000 of incremental capacity. And finally, we have a line of credit. Right now, it's rather modest.
It's at our cloud level. It's $100,000,000 But as many of you know, last year, we expanded that line to $200,000,000 to accommodate the timing to fund certain M and A deals. So you put that all together without having to raise really any more debt, we've got access to $1,000,000,000 to put to work. And I think I want to leave you with that impression because I think when you hear Sean come up and talk about the work that he's doing with the division presidents and business units, you'll see that when I'm back here, whenever we do our next Analyst Day, hopefully there's going to be more dry powder, but we'll have spent this $1,000,000,000 if not more.
At this point now, we're going to transition
to the operating business units. First up is the President of our Cloud Services, Nate Simmons. He has joined us about 6 months ago. He has a great background for managing our cloud service portfolio, which he will tell you about, but it ranges from management consulting all the way up through subscription services in the area of security and privacy. And I think you're going to be interested on what might be for many of you a different take on our cloud services portfolio and a more in-depth take.
So Nate, I'd like to welcome you up and kick off the operational portion of our Analyst Day.
Thank you, Scott. It's good to be here and it's great to meet all of you here today. I'm very excited to have the opportunity to talk to you about cloud services and to share my outlook on the business and the opportunities that we have for growth. As Scott said, I've been with J2 about 6 months. I joined in September of last year.
And so before I dive into the cloud, I will start and just talk a little bit about myself, give you my background, talk about my experience and share how that shapes my approach to the business. And also talk a little bit about how I ended up here. So I started my career about 20 years ago, over 20 years ago as a consultant with McKinsey. And after that, I did a brief stint in the corporate strategy group at Time Warner, what's now known as Warner Media. And this was this first phase of my career was very much focused on strategy.
I quickly decided that I wanted to be an operator. I felt that was a much more exciting place to work in business and I wanted to get my hands dirty and shape the outcomes of business. But what that phase of my career gave to me is a good foundation and strategy. And I think most importantly, a set of tools, analytical tools and a discipline around being data driven in terms of setting strategy and making decisions. And I carry that with me today and it's certainly a discipline that I'm bringing to cloud services.
But after that, given the fact that I wanted to be in an operating role, my next phase of my career, I worked at Time Inc, the publishing division of Time Warner, which at the time was the largest publisher in the world. I held many roles at Time Inc, but all of them were focused on subscriptions, subscription marketing and managing subscription businesses there. And that's really what I took from that experience that I bring to the cloud. So obviously, publishing and content and media are very different businesses from software, which is what we do in the cloud. But the revenue model is the same, it's subscription.
And what I learned at Time Inc. Was a very disciplined profit driven approach to acquiring customers and retaining them. Equally important to that was at Time Inc. That I first encountered Vivek, our CEO. So I was able to work with him there.
I got to observe his leadership style and see his ability to grow businesses. And that's what brought me to J2, to be frank. So I was very excited to have the opportunity to work with him. And more broadly, I'm excited to work with Scott and the rest of the leaders, many of whom you're here today. It's really been great the past 6 months.
It's very collaborative and there's a ton of energy around growth at j2, which is something that I found pretty great. After Time Inc, I made what many people consider an interesting transition. I moved into the world of cybersecurity. So immediately prior to J2, I was at Symantec, which is the biggest cybersecurity company in the world. While I was there, I was the Chief Operating Officer of the Norton LifeLock Consumer Business Unit within Symantec.
So Norton LifeLock had about $2,400,000,000 in revenue when I was there. And today it's a standalone company with a market cap of little over $11,000,000,000 So that's a very substantial security and privacy business. And the work I did there is also something that led me to J2. And it's incredibly relevant to the businesses we have in cloud services and to the opportunities we have to grow. So first, obviously, Norton LifeLock is fundamentally a security and privacy company.
And as I'll talk about shortly, we have a very substantial security and privacy business within cloud services. And then even some of our other businesses such as online fax, which have been around for a while, we're starting to think about them as security businesses, because that's where the value proposition lies. The second part of my work there that was very relevant is my biggest push at Norton LifeLock was around growing revenue profitably. And the way we sought to do that was really about deepening our customer relationships, providing more value to our customers in a subscription framework. And in turn, we would earn more value back from those customers.
And you would measure that by your attention of customers as well as your ARPU or ARPA or whatever metric. So what that looked like at Norton LifeLock, that was about expanding the value proposition from traditional device security to online privacy and VPNs as well as identity protection. We used M and A to do that. Most notably, we bought LifeLock in 2017. And I led the efforts to integrate those solutions and bring them to market.
The second part of my work there, I'll just touch upon is, as Chief Operating Officer, I was overseeing areas such as customer support, customer lifecycle management, e commerce. These functional areas are very critical in a subscription business and critical in a business where you sell direct to customers over the web. So they are powerful complements to your product offering. And so a big focus on these kind of areas, excellence operationally is also what I bring to the cloud and that I think it's a way we can unlock value in the business. So just to sum that up, my approach, data driven, very enthusiastic about security and privacy, but also very passionate overall about subscriptions, the subscription model and growing revenue in that framework.
And then second, what brought me to J2 is that I'm excited about the businesses. I think we have a great collection of assets. I was excited to join the leadership here and I was attracted to the model, the programmatic M and A that Scott talked about that's also balanced with other elements. I thought it gave me a great opportunity to grow a set of businesses. So enough about me.
Now we'll talk about cloud services. Cloud services, J2 Cloud Services. We provide market leading software and services that enable people and businesses to be productive and safe in the digital world. So what does that mean? In summary, there are 4 key things that I'd like everyone to take away about cloud services from my talk here today.
Number 1, we provide market leading security communications and marketing solutions for businesses and consumers. Just to unpack that a little bit, start with the phrase market leading. The key point I want to make is that we have strong products. And this gets back to my point about value for customers being important to a business. So we have strong products and our products lead in many of the markets in which we participate.
2nd, security communications and marketing. So we've diversified significantly from the origins of cloud services into the online in online fax, we've diversified into multiple markets and these are all large and important markets. And the third part of that sentence is businesses and consumers. We serve all segments of the market. Consumers, home offices, small and medium sized businesses and to a small extent enterprises.
So we've got about 3,000,000 consumer and SOHO customers and about 190,000 business accounts. And I would highlight those are accounts. So there's many, many more users associated with those accounts in the different businesses. The second point, we've delivered strong financial performance and our revenue is very reliable. This goes back again, I talked about subscriptions and introducing myself and the very predictable revenue model.
3rd point, and it's a very predictable revenue model. 3rd point, Scott talked about this successful acquisitions, we've used those to expand our product offerings and to drive profitable growth. This is the programmatic M and A that Scott talked about. You'll hear a lot more about this from Sean later. But my team and myself in cloud services, we collaborate quite extensively with Sean and this is also a key part of the model.
And then finally, the 4th point and what's most important is growth. How are we going to grow the business? So today, what I want to focus on given that I came from the security industry right before, naturally that's something I focused a lot on in my early days here. We've got multiple growth engines in this business. And these growth engines, they revolve around value propositions for customers that are rooted in digital security and privacy.
So we've got secure document delivery for sensitive business and customer information. That's basically corporate facts. Corporate facts is a growing market and our corporate facts business is growing. 2nd, we've got security and data protection for small and medium sized businesses. That's traditional cybersecurity and also the backup and disaster recovery services that we provide our customers.
We've got a great set of offerings here and I see a lot of upsell and cross sell opportunity there and a lot of opportunities to align our go to market and really win with small and medium customers. And finally, privacy solutions that enable individuals to use the Internet safely. We created a new privacy business in 2019 with our acquisition of several VPN brands. This is also it's a significant size business and it's also growing at a great clip and we're very excited about this. So this slide, this is a timeline that maps the expansion of cloud services into multiple markets.
So a bit of a narrative to support what I talked about. So on the left there we have eFax, which is the premier cloud fax brand and service in the world. J2 acquired eFax in 2000 and eFax is still a significant part of our business and a valuable contributor of cash flows. But the expansion and the diversification within cloud, it really began in earnest in 2010. And so I'll highlight some acquisitions there.
Number 1, we expanded into email security with the acquisition of a company called FuseMail. We've since rebranded that Viper, but that was a significant step there. Number 2, we expanded into backup and disaster recovery with the acquisition of Keep It Safe. And third, we expanded into email marketing with the acquisition of Campaigner. So I'm not going to go through every acquisition that we've done.
There have been many, but some other notable transactions that I'll highlight. 2014, we acquired LiveDrive. 2015, we acquired SugarSync. This brought us into secure file storage, sharing and sync for consumers. In 2017, we acquired a company called Sfax.
Sfax is a HIPAA compliant fax service that grew our footprint in that market. 2018, we acquired a company called Line 2. Per the name, it's a virtual communication service that enables you to add a second line with voice and data features to your smartphone and it helps businesses create virtual teams and communications. And also in 2018, we acquired Viper, which rounded out our security offering with endpoint security. It's got a really great product and that was an important step there.
Finally, as we go to the right side of the slide 2019, this was a pivotal year for cloud services in terms of acquisitions. Number 1, you can see the VPN brands there. We created a privacy business with the acquisition of several VPN brands. IPVanish is the largest it's one of the largest personal VPN providers in the world and that's our flagship VPN service. 2nd, we bought iContact.
So that's an email marketing service for small businesses and that significantly expanded our footprint in Martech and in email marketing. And then 3rd, off-site data sync. That's a secure backup or a premium but that's a key part of our strategy to turn the backup business around and get it back to growth, which is something that Vivek and Scott have talked about on our earnings calls. So I think about cloud services as having 4 subdivisions. Each of these subdivisions has a specific set of value propositions for customers and also their own set of growth prospects.
So the first is security and privacy. Viber, Off-site Data Sync, IPVanish, Sugar Sync, Live Drive. We have many more brands than this in this space. This is our largest segment in terms of revenue, dollars 215,000,000 in 2019. That's about a third of the $662,000,000 in revenue that's cited earlier.
I would even add that's a bit understated because it only includes 9 months of our VPN business, which is large and growing. So our mission in security and privacy protect businesses and consumers from disruption and loss due to cyber threats. So in essence, we have 3 offerings in this space and we monetize and provide those offerings to both businesses and consumers. So we've got cybersecurity, so advanced email and endpoint security and threat intelligence. That's primarily a small and medium sized business product and primarily a B2B business for us.
But we also have a small consumer security business there. And I think we have a lot of bundling opportunities with our VPN service, which is currently more targeted at consumers. We have an opportunity to generate some more revenue there in the consumer space by layering it into our privacy solution and our VPN solutions for consumers. 2nd, there's data backup and disaster recovery. Again, this is also primarily focused on business customers.
It's well, it's in the name. It's secure backup and disaster recovery. But there's also a consumer element to this business. As I said, under the brands LiveDrive and SugarSync, we also offer secure storage, file sync and things of that nature. And in December of this past year, we added SugarSync, secure file sync to the IPVanish subscriptions that we sell on the Internet.
So basically the proposition for those customers expands from we're keeping your Internet connections private and safe to we can also help you keep your files safe and help you share your files safely. And finally, I talked a lot about this consumer VPN malware protection and look I already put secure file storage there. So that's security and privacy. 2nd subdivision or 2nd segment is SOHO Cloud FAX, so home office Cloud FAX. I think everyone's pretty familiar with this.
Our primary brand here is eFax. We offer very simple, easy to use fax services for use in the home. This eliminates the need for people to have fax machines, etcetera. As you can see, it's still a significant part of our revenue. It's very high margin.
It's a very valuable contributor to the company. But we've been declining low single digits in this segment and we expect that to continue. We don't see this as an area of growth, but we're still also very focused on making sure we have the best product offerings, good customer experiences and making the most of the business we have there. 3rd is corporate cloud facts. So I talked about this.
And one thing I would highlight is corporate facts is different from home office fax. It's a different set of customers. It's a different product and it's a different value proposition. So of course corporate users have much higher levels of requirements around the performance of a service, the reliability of it. They need things to integrate into their systems and they have a more sophisticated set of needs.
In addition, they have requirements around information security, especially in industries that are regulated and have a lot of compliance in this area. So, this segment, as I said, this is a growth segment for us. I think of this segment as a security business. The differentiation of facts as a method for companies to transmit documents and data is that it's secure. It's explicitly deemed as secure in HIPAA.
So it's very appealing to healthcare customers and it's easy to use. It's universal. Everyone has it. But it really comes back to security here. It has a much stronger value proposition in this market.
We expect to grow about 10% in this segment in 2020. The last subdivision here is SMB enablement. So this is defined more by the customer and currently the scope of this is our email marketing business. So we offer email marketing solutions that help companies acquire and retain customers. As Vivek said on one of our calls, email marketing is sort of the first step that a company takes when it enters marketing.
So if you're a small business, one of the first things you need to be able to do is communicate with your customers that you sign up and remarket to them. And email is a very basic form of marketing. As I said, we also offer voice and communication tools. So these help companies very cost effectively collaborate and get set up to work virtually and in teams. We also offer some call center solutions.
We grew very significantly in this area in 2019 with the acquisition of iContact. And these are large growing markets. They're important services. So we also see opportunity here both to grow our scale in voice and messaging and email marketing, but also to figure out what are some of the other services we can offer to these customers. So market leading products.
So as I said, product is very important. This is the foundation of how we're going to grow the business. And one point I definitely want to get across is that we've got some great products in cloud services. We have great products across the division, but since one of my themes today is security and privacy, I'm just going to talk about some of our offerings in this area. So if we start on the left with Viper, which as I said we acquired in 2018.
Vypr offers endpoint and email security which are really the first two kinds of security that a small business needs and decides to get. So, VIPER offers very high levels of protection, But equally important, the product is developed and designed to be easy to use, to be easy to deploy, easy to administer. These are all really key things for small and medium sized businesses who may not have large security departments or large IT groups. So would emphasize this is a small business product. It's not targeted at enterprises.
Vypr scores extremely well in the various security tests that are out there. These are very independent like consumer reports. The one I have here, AV comparatives gave Viper Advanced Plus in 2019. And the quote there at the bottom pretty much sums up what we think is compelling about Viper. This product impresses with clear design, simple processes and strong reporting features.
The other thing I would say is that everyone is aware of cybersecurity and ransomware and the threats and how they continue to grow. Small businesses are increasingly a target for these attackers. So this is a very important service that we offer. Moving towards the right, we have IPVanish. We're one of the biggest personal VPN providers in the world and we have a very strong service here.
So the foundation so a VPN, a virtual private network, it provides users with the ability to have an encrypted connection to the Internet using our network. So the foundation of that service, of course, is the encryption. But IPVanish differentiates itself in a number of ways on a number of other elements that are also very important. So speed, speed is important and server choice is important. So IPVanish has a very large network, most of which is owned over 1300 servers in 75 countries.
We think we have one of the biggest VPN networks out there and this results in good speed and performance for our users. Usability is also very important. So with something like a VPN, you just wanted to operate in the background. So you wanted to choose your server, find the best speeds and really just help you do whatever it is that you want
to do
and you feel that you're safe and encrypted. IPVanish also excels in this area. Commitment to privacy. So there's a paid VPN, has a no log policy. We don't store any customer data.
We don't try to monetize customers in that way. So IPVanish is very committed to privacy and that's important for many users in this space. And finally, customer service. So the team there, the General Manager Nick Nelson there and that team, I'd say they're almost obsessed with customer service. They're really focused on customer NPS and they're really focused on resolving customer issues and making sure people think well of the service.
The quote there from a user, I mean, I think it says it all, fast speeds, plethora of server locations and most of all, they respect your privacy. So that's really what IPVanish is about. You can see we have a 4.5 star rating as aggregated by Trustpilot. 3rd, we have Off-site Data Sync. This is a premium hosted service provider in the backup and disaster recovery space.
This was an acquisition in 2019. Vivek and Scott have spoke quite a bit in our earnings calls about the managed decline in the backup segment. On our most recent call, they shared that we expect backup to decline low single digits in 2020. This is an improvement over the decline in 2019. And as they also shared, we have an outlook that we can return this business to growth and we anticipate that we can in 2021 and beyond.
Off-site data sync is really at the center of this. And this turnaround fundamentally comes down to the strength of the product. This is a team that has a very deep technology expertise, very strong customer service. It offers many of the leading products. I've got the logo there for Veeam.
Veeam is well known and regarded as one of the leading, if not the leading software platforms for backup. Off-site Data Sync, they specialize in Veeam and they focus quite a bit there. It's a really great service. And how that's going to help us with the business is, number 1, it's off-site data sync is growing. It's on an organic growth trajectory on its own.
Number 2, it opens up possibilities for the backup team to execute its M and A playbook. It opens up a wider berth for M and A. And 3rd, it's helping us, for example, with our Keep It Safe brand in Europe, Keep It Safe is leveraging the off-site data sync platform and using that to propel organic growth. So as I said, Veeam is a key product for off-site data sync. J2 is now one of the largest Veeam cloud service providers in the world.
We're a platinum, a Veeam global platinum partner. There's only a handful of service providers in the world that have that designation. And then just this week, I think later in the week, Off-site DataSync is going to be named the Beam North American Partner of the Year. So we got their permission to reveal it early today, but the team is thrilled about that. And in the headline there, I say highly rated by customers, partners, 3rd party reviewers, testing.
This is an instance where a key partner of ours is really validating the quality of our service for customers. And finally eFax Corporate. As I said, Corporate FAX, we're very excited about the growth prospects there. In Q4 of last year, eFax was certified, HITRUST certified. HITRUST is an independent council of healthcare and information technology companies that put together a set of frameworks basically to audit and expect the processes of a company, their product, their physical locations, their processes to ensure that they're HIPAA compliant.
So eFax is the 1st major cloud fax provider to receive that designation. Given the importance of security in this market that's significant and it's just a reflection of the investments that we've made in the product and how much we've improved it. Financial performance, strong financial performance. As Scott said, our revenue has grown about 9% annually over the past 5 years. EBITDA has grown in sync with that.
We've been operating at roughly a 50% EBITDA margin. And per the chart on the left, 83% of our revenue last year was from fixed and recurring subscriptions. And I would highlight that even the 17% that's usage based is very predictable. So that's a lot of our corporate fax customers where they give us projections on their expected page volumes and some of that comes from our backup customers where we know how much data they have stored with us and we have a good sense of how much data they will have stored with us. So altogether, our revenue is very predictable.
Acquisitions. Successful acquisitions expand our product offerings and drive profitable growth. This is the J2 program of programmatic M and A. So I'll highlight our M and A activity in the SMB enablement space in the past couple of years. I've mentioned both of these, Line 2 and iContact.
We bought Line 2 in 2018. We bought Line 2 because it has a great product. So in particular, Line 2 is a strong mobile app and also it leverages voice VoIP or voice over the Internet technology, which we were lacking in our communications platform prior. So we bought Line 2 to improve our product. In addition, we knew we could expand the margins.
So when I say we, I wasn't here, but the team knew that we could expand our margins. And we've done that successfully by just basically it's a tuck in for lack of a better expression. IContact was a little bit different. That was more about growing our scale in email marketing. IContact significantly increased our scale, especially with small business customers.
IContact has been around about 15 years. It has a very strong brand and it's particularly known for being easy to use. So with iContact, our strategy was more about growing our scale. There are of course efficiencies associated with that, not quite as significant as with a tuck in, but there were certainly efficiencies. But also we had a view that we could drive more revenue by porting some monetization strategies.
And in addition, we saw that we could bring some of the features from my contact into our other email marketing platforms. So things like a drag and drop photo editor for the person who's creating an email. I contact the users love the photo editor, right? So we're putting that on to our other e mail platforms. That's just one example.
So you can see that the aggregate purchase price, you can see that EBITDA contribution in 2019, altogether very solid and successful acquisitions. So looking towards the future and growth in the future, Excuse me. Building leadership positions. So we've got these growth engines that I talked about earlier. So I want to talk a little bit about each of them.
Secure document transmission. So I call this the business formerly known as Corporate Fax. Our strategy here is to grow in healthcare and other compliance verticals. On the left, you can see our share, our estimated share in different online fax markets. At the top, you can see we're dominant in the home office online fax segment with very high share about 55% share.
In the bottom left there, you can see we don't have nearly as much share in the corporate fax market. Now highlight, this isn't cloud fax, this is just online fax. So this includes companies and services where there's servers on the premise. Server based fax still accounts for most of the share there. So we see a big opportunity to take market share there and to grow.
We have been growing. We've grown in each of the past 2 years in this market segment And we look to accelerate that growth in 2020. Healthcare is key. So based on the research we have, we estimate that it's about a third of the TAM in this market. And that's because most of the documents that are transmitted in healthcare are transmitted by fax.
What is that? That is your doctor sending your prescription to the pharmacist. That's your primary care physician sending something to a specialist, that's a hospital, sending your discharge papers to your family doctor. All of that's obviously very private information in the U. S.
It's governed by HIPAA and it's very important that it's transmitted securely. So our strategy on the right side here, as I said, win share and do this by having the best product. What does that look like? A big piece of that is infrastructure. So being high speed and 100% reliable.
So we've invested a lot in infrastructure over the past couple of years. Our corporate fax service utilizes 5 data centers in 4 different continents. There's a lot of redundancy and there's a lot of mechanisms in place to make sure it's always up. We've got 20 fourseven operations, 20 fourseven customer support. So we have an enterprise grade infrastructure.
Being HIPAA compliant, one thing that FAX has as a benefit, it's explicitly identified as HIPAA compliant in HIPAA. And it's as I said before, it's universal. It's not that expensive. So, this makes it a very attractive way for healthcare companies to send documents around in compliance. Things like regional data sovereignty.
So for one reason or the other, some customers don't want their data or their customer data to leave the country in which it originates. So infrastructure is very important. We have great infrastructure. There's product. So the team has been hard at work at developing different features that appeal to these buyers.
So you need APIs to integrate into their systems and into their workflow. There's something they recently released called the eFax router that helps route the faxes to the right place. So if it goes to a certain number and comes from a certain place, it goes to the right repository within the customer system. Consensus by eFax, it's actually I think it's just consensus. But that's launching next week at HIMSS and that is an interoperability solution that we're bringing to market.
So today, our fax service, we power some interoperable solutions in the market. They use many different transmission methods, fax being one of them, and we power them. So consensus is us going to market with our own solution. It's powered by fax, but it also leverages secure messaging and other protocols basically so that we can help companies exchange documents and be more than facts. And then finally, go to market.
So direct sales, we leverage the web quite a bit, channel and e commerce. I'd just highlight that we have a very robust operation in this area and we do very well with different ways getting the market very cost effectively. Last thing I'll say is it's working. So in last year we had a 20% growth in our new business. So that's a good forward looking indicator.
That's not equal to total revenue. Obviously, a lot of your revenue in a subscription business comes from existing business. But growth in your new business is a good indicator of the growth you're going to experience in the future. We had 20% growth in that last year. And in the Q4, the majority of that came from healthcare buyers.
Next is cybersecurity and data protection. So as I said earlier, I like to be data driven. So one of the first things that I did when I got here was with our security teams, I said, let's talk to customers. I want to do research. Go out and interview customers.
Let's do a survey. I want to understand which customer segments are we going after and what do they care about. So we did a survey of about 1,000 small and medium businesses in the U. S. In December.
We asked them lots of things, but this is the most simple question that we asked them. What's essential and very important to you and that you plan to purchase in the next 24 months? So we were very happy, of course when a survey and data validates what you've been doing. But obviously as I said malware protection and email protection, those are 2 of the basics. So those were at the top.
But it was definitely a light bulb moment. We hadn't been thinking of backup as a security product and that you can see is number 3 there. Threat intelligence is an area we focus a lot on. Security awareness training, we're OEMing a security awareness product around phishing and phishing simulation. We're bringing that to market this year.
Web security, we're also bringing a web security add on to market to Vypr this year. VPN and secure gateways didn't rank as highly, but we have a solution in house with IPVanish. As I said, that's primarily a consumer VPN service, but they also have a VPN for Teams product that's used by companies, so that you can buy a subscription for your employees, provision it to them, administrate it and tell them, look, be secure when you're using the Internet on your work device or you're doing different things, not necessarily when you're connecting to our corporate network, be secure all the time so that employees aren't bringing threats to work with them. So we feel that our offerings align very well with the needs of the small business customer segment. We've got some very easy to use products.
And I'm personally very excited about our opportunities to really 0 in on this segment to really synchronize our go to market efforts and also to continue fleshing out our portfolio. So using data to really inform our M and A strategy. So when I talk to Sean and team about what do we want to look at, I'm not going to say specifically, but it would be informed by data and talking to customers. Privacy solutions. This is a new business unit and something I'm very passionate about as well.
I think as a consumer, my profile could be called paranoid. So I've long been a user of security and privacy solutions. So in 2019, J2 acquired a portfolio of VPN brands. The biggest was IPVanish. It's an important point to make.
These businesses were attractive in their own right. So recurring revenue, growth, strong margins and good free cash flow. So there are good businesses to be in. This was in April of 2019 that this acquisition closed. And so then that team, we've retained pretty much all of the team and then we put them into the J2 system for lack of a better word and got to work on accelerating the revenue.
And what does that look like? Corporate development, we did 2 tuck ins last year. They were very small, but it was a good way to grow the customer base very efficiently because we're able to serve those customers using our existing infrastructure with really without any incremental cost or not material. Distribution, in Q4 of last year, we launched Vypr branded VPN. So basically there's now a premium version of Vypr for the home that incorporates VPN as a feature.
And although that's a small part of the Vypr business, it's still material. And our sales since then have been beating budget and beating projections and up year over year. So it's really been a needle mover for our home security business having VPN as a service. In addition, we launched an Ookla Speedtest VPN embedded in the Speedtest app. So Steve will talk about Ookla later.
I don't want to talk about as I might misstate some facts or figures, but it has a huge customer base. It's an app that people open when they're getting on Wi Fi. So it's a very intuitive and natural point for us to distribute VPN and to bring customers into a VPN. So we have an Ookla branded VPN out there. It utilizes a white label platform that our VPN business has and that's very exciting.
And as I said, adding SugarSync. In December, we added it to our IPVanish subscriptions. So this is storing your files and storing your data with a service that's very sticky, right? You're not as likely to move and it's also more value. So this is a way for us to increase the lifetime value of those customers either to retain them longer or to have some premium offerings in that space.
And we're very excited with what we're seeing there as well. And one thing I would just say is that bundling and cross sell, I view that as an intermediary state. That's a tactic. That's a pragmatic way for us to generate more revenue and have more value. But really what you want are integrated solutions.
You don't want people to have to make a choice to buy something extra. You want them to receive it and to activate it and really to drive the use. So this is in contrast to the things I've shared before, which were all about things that happened, things we've done, things we're working on is more of a conceptual slide developing the future product suite. But I wanted to make the point, we have such a great set of businesses and services and a great set of assets and cloud services that as we think about a privacy solution, we already have so many of the ingredients. So line 2, as I said, it allows you to add a second line to your phone.
So if you're a personal trainer or real estate agent or anybody who doesn't want to carry 2 phones, maybe doesn't want to give your personal phone number out, you can just use line 2 as an app on your phone and do business from your phone and keep your private phone number to yourself. We've talked a lot about security and file storage and VPNs and we're continuously working with Sean and team to evaluate other ways for us to make the product better. And these are just a couple of examples, but that's not exhaustive or necessarily an indication that we're going to do some of these things. So my last slide and this is an important point to make. We've got a great team.
So I've been up here talking about cloud for the last 40 minutes, but we have a team that does the work and that drives the businesses. We follow the GM structure of j2. We have 6 GMs within cloud and then we also have a leader of HR and a leader of finance. I won't go through each person, but what I'll say is they each bring something very unique to the table. Just to pick 1, John Nebergall in the lower left there.
He leads our fax division. John's background is in healthcare software and technology. That's what John's all about. He has a true passion in that area and he could talk to you for hours about things like interoperability and what healthcare providers want and need. Tim Smith on the lower right there, he's a former investment banker, worked at EMC, Western Digital.
So he combines financial acumen and also he knows the world of backup. So we've got a great team and they've been a pleasure to work with. And in conclusion, I think I'll just restate my introduction, which is the 4 things that are important about cloud. Number 1, we have great products. We operate in great markets and we serve businesses and consumers.
Number 2, we have strong financial performance that's rooted in subscription. Number 3, we use acquisitions like all of the divisions of j2 to grow and that's important. And then 4th, security and privacy. We have a big opportunity there. We have several growth engines within our business right now, and I'm very excited about that.
So that concludes my section. So I'll turn it back over to Scott.
Thank you, Nate. And as you can see, he's been very busy in just the short six months he's been with us. Hopefully, you share our enthusiasm of having him part of our management team, really unpacking, I think, a new vision, a way of thinking about our portfolio of cloud services. So we're looking for many great things to come. We're going to now shift our attention to J2's Digital Media business.
As I mentioned at the beginning, we have 2 divisions, although we report in one segment from an accounting standpoint. We're going to start with Zip Davis. And by way of background, this was the company that J2 Global bought back in November of 2012. To give you just some benchmarks, at the time the company was doing about $50,000,000 in revenue. Steve Horowitz, who is the President of the division, and will walk you through the various aspects of it.
Under his tenure and leadership, this business has grown tenfold. Last year, it closed the year at just shy of $500,000,000 of revenue. So, some very exciting aspects to this business. It's had tremendous growth both organically and through the use of the M and A program. And I'd like to have Steve come up now to give you a little bit more of his background and then walk you through his division.
Thank you, Scott. So I've been with the company, as Scott mentioned, with Ziff Davis just a few months after Vivek actually acquired Ziff Davis. This is going back before we were acquired by J2. So getting close to 10 years or to put it in perspective as an acknowledgment of Dan's dominant position in the parenting and pregnancy space, 114 months I've been with the company. It's been an amazing 10 years so far.
And I was introduced to Vivek by an old CEO of mine, a guy named Tom Evans, who ran Bankrate and a bunch of other things. He was the CEO of a company I was at called GeoCities. And it was a great introduction and partly because it's when you've got someone like Tom, I'll introduce you to someone like Vetback, it was such a wonderful handoff. And I was able to meet somebody who actually sees things the way that I do, which is you want to compete, you want to work really hard, you want to do the right thing and you want to grow a company and add jobs. And that's pretty simple.
And we've been able to do that in the 10 years that I've been at the company. In those 10 years, Vivek looks the same. I look like the after picture of The Dorian Gray. So we know that I'm doing the work and Vivek is just hanging out. So much of my career has really been focused and I won't go through this and I won't keep this up too long, has been in Internet marketplaces, classifieds businesses.
So my times at Yahoo! And at AOL, in autos and careers and real estates and understanding these marketplaces is really what I like because if it's done well, everybody wins and that's a rare thing, right? So the consumer wins, the client, whether it's an enterprise looking to reach a customer or a small business, And we certainly went. And so being able to find out the right either velocity or volume, there's all kinds of metrics that are used to determine how a marketplace can become robust. And it has to be robust so everybody wins.
If it's not robust, not everyone wins and that's not going to be a long term business. And that's what we try to do is focusing on long term businesses. So this will be the only slide that I'll read verbatim. Ziff Davis is a tech company intently focused on helping people research, decide and act on important decisions in their personal and professional lives. It is a very, very simple statement.
And I'm going to go over 3 very specific verticals that this applies to. And each of them are very different. And I'm fortunate enough to work with a team of general managers and coworkers that have the skills to work across 3 very diverse verticals. But we are all about intent. And that intent requires tremendous editorial capabilities and skill and great brands.
So the marketplace is built on trust. So here we're going to talk about really the not so much a time line. I almost look at it as like this is our evolution of modern man. Well, this is our evolution of a digital business and a strategy. Because when we started, you look earlier, let's go back to 2010 almost, we're primarily CPM based and we're primarily RFP based.
So request for proposal and CPM cost per 1,000. So it was an impression based business that basically required us to hopefully someone was going to go and say they needed to spend money. We were fortunate enough to know that they wanted to spend money and then we can go and get it, right? So to me, that's very reactive. And we still have a reactive part of the business and it's great.
But when we look at how we want to grow long term, this is the part that is very important. And we are very sort of Darwinistic in our approach. It's really the adaptability over time to understand what is going to be useful and at scale a few years out than when we came in. And Vivek gets a lot of credit early on when he first came into PCMag and understanding that affiliate commerce was a key component to our growth that we needed to go in and create this marketplace in affiliate commerce for us to be able to grow the business. And that's really where it all stemmed from.
So I'm going to walk through this a little bit. And there's a couple of things I want to note. First, we're going to talk about what I'll call renovation M and A. I trademarked that, TM renovation. So 2013 IGN, 2017 Mashable, 2019 Spice Works.
3 fantastic brands in their verticals. They were all significantly unprofitable. And we were able to go in there and understand how to value that company. And it wasn't because we paid the most, it wasn't because but we understood that the tent poles of what those businesses were built on, which is tremendous editorial authority, high quality employees. And we were able to then take our philosophy, which then I will go into and apply to those businesses.
First, it's rigor. You can't there's no college for that. It's just it's part of what we do. It comes from Vivek and it comes from me and then it comes from the people that we work with and going in there and doing the hard things. And quite frankly, the hard things that sometimes the prior ownership may not have done, whether that was intentional or not.
Then it's going in and saying, do you have the business fundamentals and the business philosophy to execute? And we believe we do. So the way we look at it is we are also going to give ourselves space in between renovation because it's not easy to do. But we know how to do it. But we're also smart enough to know you need to pace those out a bit.
So when you look at certain years, you're going to look at Speedtest. So now I'm going to talk about growth and what we'll sometimes talk about tuck in acquisitions, right? So Speedtest Ookla, same company, 2 brands, high, high growth business, which we acquired in 2014. Offers, very, very important business, which I'll talk about later in our commerce strategy in 2015. 2017, high growth business in Humble Bundle, we're going to spend some time on.
And then you're going to start to see some of these other tuck ins like Black Friday, Down Detector and Best Black Friday. And if you have a Black Friday domain and you're interested in selling it, you should see me after the conference. And then also Ekahau, which is another amazing product that we have, which is the enterprise leader in Wi Fi planning and monitoring, not just in the U. S. But across the globe.
So we ladder our behavior on purpose because we have very good flow through. Even in our high growth businesses, we have very good flow through. But the tuck ins, because we have this a system of operations, it allows us to take on some of these less profitable entities and actually give us a little bit of time to make sure we're doing the right things. And then it all catches up because in the end, we have to do the proverbial, we've got to fly the plane and build it at the same time. So and that leads me to the next slide when we look at our sectors in these markets.
And so first is tech. You're going to see a common theme across all of this, which is high editorial integrity and authority. And yes, that even applies to gaming, right? Because everyone says people are very serious about gaming and we're very serious about making sure that we're helping them make decisions because that decision is, I have $60 And to a kid who's 15, dollars 60 is a lot of money. Or it's 60 hours.
What I want to do with those 60 hours. So we take these things pretty seriously, even when it sort of seems like it's a little bit of a flippant topic. But for us in tech, the key here is building this business on a performance basis moving forward and delivering customers, not delivering impressions and not always being beholden to the RFP or the CPM. In gaming, we like our position here. We are a definitive brand for IGN, for companies that want to reach, that are marketing AAA games and entertainment.
And I'm going to talk about that later. But these this gaming audience is key to the entertainment vertical at this point. And the other part of Humble Bundle, and we have high aspirations for Humble Bundle. Our goal is to be kind of the main player in indie game supply chain. And I'll go through what that means.
And if we can do that there, we like our space there. There's a lot of big people that are fighting up here at the AAA game level and at this platform level, but we really like this multibillion dollar niche space that is indie gaming and we're to go through really the significant efforts that we've made over the last 2 years or so since we acquired the company to create a growing position there. And with gaming also it's important is because of these two businesses, it's a balanced portfolio. And you'll see this across all of my businesses. So my division as a whole and each of these different segments, the goal is a 1 legged stool doesn't stand very well, certainly not going to support me.
So we've got to have multiple legs to the stool to make sure that we're doing the right thing. Otherwise, one thing can tip us over. And that means that we were responsible in building the business. The last is broadband. And this is really the setup and maintenance and measurement in the broadband economy, which I would argue is the largest economy since oil was created.
I mean, it is everything that we do, right? I mean, one of the biggest things about this conference, where's the Wi Fi going to go on the back of their ID badges and stuff? And how is this being set up? Are we going to it is everything that we do. And if you have kids at home who then have their friends over, you are tech support.
You're your own geek squad And it's very important that you have resources to do that, whether you're at home or whether you're Apple opening up a retail outlet. And we really like our position between on one side you have, let's call it cellular and that's where Ookla and Speedtest come in. On one side you have Wi Fi, that's where Ekahau comes in. And in the middle you have 5 gs and soon to be 6 gs is already being talked about. I'm really sure how that works with the 5 gs.
But we believe that there is a for Happy Days fans, a Milache crunch in there for us that we can go in and really continue our dominance of that space. Talk a little bit about our financial overview. This is a lot better to look at than my profile picture. The goal is provide and sustain strong revenue and EBITDA growth. I can feel very proud to say that I think it's rarefied air to find a digital only media company that has a 24% CAGR over this period of time, especially given what's happened in the Internet technology space, in with ad networks and programmatic and all that stuff.
It's difficult. But why it works and why are we able to do this at scale? And by the way, scale and profitability. My view, when I interview people, I let them know that anyone can grow a large business, but not anyone can grow a profitable business at the same time. We have to parallel park in Hoboken, New Jersey.
If anyone's tried to do that in Hoboken, it's tough, right? We don't have we don't parallel park somewhere in Vermont. We have a very, very specific goals that we set out and we've got to hit margins. And to do that and get scale at the same time, we're very thankful that we have our M and A machine to do this. What Scott and team does and you'll hear from Sean and the way we're able to interact there, but also we have to build and launch good products and good editorial.
And so we've been able to do this, that 24% while doubling revenue and EBITDA dollars over that period of time. But as important, as I showed on the prior slide, this has been a march to changing the DNA of what we do, which is if you look at this, our display and video advertising, which at one point was 64% of the revenue, is now 27% of the revenue, but growing over a period of time in which we doubled the business. But you see subscriptions go from 5% to 31%. That's a big difference and a big change because when you have a visibility and you have the annuity that subscriptions bring, it's a whole other ballgame in thinking about how you can plan your business. You're in multi year plans.
You're not talking about quarters. You are building deeper consumer products or enterprise products and offerings. And that allows us to be able to do these things. And it also allows us to maybe go do the next renovation acquisition. So talk about this kind of broadly and I won't walk through every number.
It's a pretty simple equation. We start with an incredible audience. And I feel comfortable in saying incredible audience because I think everything we've ever seen about our brand and about the value that we bring to people demonstrates that we do have an incredible audience from a trust standpoint. And then we take that incredible audience and we mix it with our assets. That is those assets are great content.
They are all these deals and coupon codes that we curate. They are the 400,000,000 app downloads that we have between Speedtest and a bunch of other assets. And those two things combine because they create value to create engagement. It's pretty simple. That's the enzyme.
We get together, we get this engagement and that generates some pretty phenomenal stuff for us, right? So there's 4,000,000,000 reports generated a year. That's reports generated by Speedtest, by recent acquisition of ours down detector, which you may be seeing in the news more recently is more and more systems are being stressed as people are working from home and they have outages. Well, they go in, is this down, down to tech or they go in there, they log it and we see it typically faster or as fast as their internal tech systems. And then we get a yield from that.
And that's how it works. And then one example, we have over $1,000,000,000 in gross merchandise value. We move a lot of product. And we move a lot of product for consumers. And we move a lot of product on the SMB and the enterprise level.
And that's a really basic equation for us. And if we can continue to do that and if we can find assets that plug into that audience and asset equation, we think we've got the other stuff figured out. So I'm going to go now into the verticals. So we'll start off with tech. I won't read the slide verbatim.
I'm going to really hit 3 areas. And 1, I'm going to be repetitive on. But if I'm going to be repetitive, it's going to be certainly on this point is authoritative content. I can't stress that enough. We are not passive.
We are not a new site. It's not about sports. It's not about this. And by the way, I could consume all that as well. But you're not necessarily coming to have fun or to waste time.
You have important decision you're looking to make in your life. You're a 15 year old or you're me, a 23 year old, a parent who's trying to figure out what game they're going to get their kid for Christmas or Hanukkah or whatever holiday you celebrate and you kind of don't look like an idiot, right? So you're going to go you end up going to IGN to figure it out. Or you are trying to understand, every time I buy this piece of technology, I always regret it because the new thing came out and I never knew it. So you go down this the gamut of the verticals in which we cover, in this case, it's tech.
Our we matter. We matter and we clearly drive a lot of spending, which I talked about. But we also drive it in the ability to inform and decide. We make and empower customers on the consumer or the enterprise side to be better customers. The other thing is a concept, not original, but what we call most valuable categories or MVC.
We like our little acronyms. And that's very important for us is because honestly not all things are created equal. Now decisions to a particular person could be just as important God knows like it's just as important to buy a printer at home as it is for someone to buy a VoIP system for their company. So we understand that relationship. But we also understand there's a big difference in that relationship in terms of economics for us and for our partners, right?
So let's take NBC for a second and say the vertical is tech. A category is laptops or printers that I just said. That's fine. We recommend and we review dozens and dozens of printers a year. And people come to our site and then they will click on it, read our review, understand it, be informed, compare, go make a transaction somewhere else and we get a piece of that transaction.
It's wonderful. A most valuable category is VoIP, voice over IP or alarm systems. These businesses or these products that are themselves subscriptions or annuities or even maybe have high, high margins, say mattresses has become big online versus the margins that will happen on a printer. So we have to understand the content that we provide, how important is it going to be for the consumers and what will we yield? And then we go in and we want those relationships directly.
But it's also important to know that it's not just a volume play, right? So we are we can look at certain places like, you could argue VoIP is not a large volume play. But there are certain other categories like a VPN or even web hosting. You don't need a large volume of people looking, but you do want is a high LTV from the businesses that are trying to acquire those customers. And then that's where we go in and negotiate make sure we're getting our fair share.
I'm not going to just take $20 to acquire a new customer when I know they're going to be your customer for 4.5 years. We're going to want a piece of that LTV, either upfront or over the long term. And then the last piece we'll talk about is a concept of Vivek has preached since I met him, which is called multiple rents. And I think this is critical for any business that is a content creator and wants to afford high quality content moving forward, because the CPM does not solely support that. Affiliate Commerce is one of our larger rents that we get, and I'm going to go through a bunch of them.
But our goal is to make sure that we have several, remember this multi leg stool, several different ways for us to make our economics and our revenue and to interact with the consumers because those that are relying on one thing, back to I think, Darwin would not look at that as a good idea. He would say that that is not going to be adaptable over time. You will eventually get stuck if you're 1 dimensional. And so multiple rents is a big part of what we do. So for example, we write an article, we write a review.
Sasha Segan, who you saw in the clip in the beginning, he writes review on a cell phone, right? So we can get paid because someone goes to that page and they see ads, and we'll get a rent. They can go to that page and they click on the phone, they go to buy it. We can get a rent. Sasha also happened to think that that phone was worth calling an editor's choice.
He thought it was awesome. And about 4% of all products reviewed get that, not because we have a bar or anything, but that's how stringent our editorial team is in giving that out. Well, they sometimes may want to pay us to put that on the packaging. We may also then do a thing and say, hey, this is the top 10 phone of the year, and they want to put that on their packaging. So these are different multiple rents, all derived from the high quality of the editorial that we do.
So I'm going to talk about this is a very complex slide. It's mostly meant for context on the left. So and for those in the back, you'll we'll give you a handout. But like but the important part is on the right. And the reason why I decided to highlight this part when I'm talking about a Tech Media business is because this is where this is how we make margin.
This is how we get the expansion that we want and are able to afford more content and high quality content. Because we go in and we looked at and say coupon codes and creating deals are very important to the ecosystem. If you want to be in the affiliate commerce space, you can go work with a bunch of other companies back in the day for those who remember when you had the comparison shopping engines that were Price Grabber and Shopzilla and all those. Or you can be proactive and figure out how do you source your own supply and make sure that you are bringing these raw materials, right? We go through and I won't read the numbers, but we're talking about close to 2,000,000 codes a year that we go through.
And we almost like an editorial organization, we are sifting through this stuff to make sure that the best and also the most timely, very frustrating, if you have something that doesn't work and also unique. And because we do this level of effort, the merchants trust us. So they will come to us with unique stuff because they know putting the code in our hands is putting the codes in somebody that actually gets it and you want to trust. And so we take all of that, we bring it down and then we run it across our network of assets, whether it's with Dan and what to expect or whether it's on IGN or whether it's on PCMag or on offers.com. The other side to it, as I mentioned, is we have direct relationships with the merchants.
We there are platforms in between in the affiliate space. We know them. They're Commission Junction. There's LinkShare. You can go through the whole list.
But that is a platform. That's how stuff gets measured. We're going in and having direct negotiations. We do not want off the rack. I can't buy off the rack, so we're not going to take an off the rack deal.
And so we go in and that's part of what we do in our expansion. And so when we look at our M and A and the tuck in, say, the Black Friday sites, we immediately can see the lift that we can get from those sites because we know we are getting leading rates in the marketplace. And why? We're driving $1,000,000,000 of GMV. So we take all that stuff together and it turns out to be a pretty nice recipe.
But that's why we don't outsource the direct relationships, which a lot of folks do. They'll let the affiliate channel companies do it. And we don't outsource our ability to go get our promo codes and our and creating our deals. We actually view that as part of the editorial authority integrity that we have. Talk a little bit about case studies, so sort of double clicking on this.
So, we acquired offers in December of 2015. Offers based out of Austin is tremendous acquisition for us. A really great company and awesome people and allows me to get barbecue multiple times a year. So they're based in Austin. So what they did for us was they gave us this ownership at scale.
They are the ones that were doing all this coupon curating and all that stuff. And we love that. We already had direct relationships. They just happen to have direct relationships with 100 more. And we love that concept.
And we wanted to maybe attach maybe a little bit more of our deal philosophy or our negotiation philosophy to it. And that was a great acquisition for us. And it provided this underpinning of technology and capability that we still use today across all of our affiliate assets. Then we looked at it and said, okay, we've got this engine that's humming now, this affiliate engine, and I use this analogy. Now it's like, well, we have this great engine, where are the chassis that are maybe subscale, that are really nice, but their engine is not good or they're beat up and we can really refurbish them.
And then same thing in 2015 that happened earlier that year was actually the first Prime Day. And that was a thing, but not like it was in 2016. But we sort of looked at it, we understood that. Obviously, Black Friday was big. That was always going to be big and we view that was going to continue to be big.
But Prime Day actually really showed that event based commerce is truly a thing outside and you can create it beyond just the day after Thanksgiving. So we said, okay, well, let's at least try and take some ownership position the day after Thanksgiving. And if it works, then we will build out more event based commerce strategies. And that's what we did with our Black Friday sites. So when you add up offers and our Black Friday acquisitions, we spent about $66,000,000 and we drove about $27,000,000 in EBITDA last year, just that year, right?
So we like that. Yahtzee, let's try and do more of those. And that's what we're trying to figure out. But also note that we take offers and all these Black Friday's things, they power affiliate commerce on IGN. The IGN audience buys a lot of flat screen TVs.
They buy a lot of gaming chairs. So a lot of that's not actually showing up in the $27,000,000 And that's why when we like these acquisitions, when they come together and it really creates sort of that Reese's peanut butter cup moment where these two things come together and create this great event for us. So I'm going to move on to gaming. We have 2 assets, primarily in gaming. They're Humble Bundle and IGN.
And Humble Bundle is primarily a subscription service, excuse me, focused on indie gaming, but we also take a lot of AAA titles that have been sort of their retail life cycle is over. And we bring them into it because not everyone can play the game at whatever time. And it's part of a subscription service and you're getting it at a discounted rate. And we recently relaunched the subscription product that you will have multiple price points over multiple periods of time over multiple I only want 3 games or I want 6 games. And it's really about choice.
So that's why we're not that creative. That's why we named it Choice. So we have that business. We really like it. We love the charity component that we also have as part of that business and how the companies appreciate the way we can work with them as well.
IGN is really on the awareness side of things, right? So if you're going to have a AAA game or a console or especially new IP, new intellectual property in this space, IGN is a must. You got to be there. And so we kind of looked at gaming. We were 1 dimensional from a business standpoint, but also 1 dimensional from a, hey, we're hitting the higher end of the gaming market, but you got to go from AAA through indie.
And that's what we're doing between the two assets, although we're monetizing them a little bit differently. So I'm going to talk about Humble Bundle. So we have the flywheel here, because I think that's the cool hip thing you're supposed to do now is put a flywheel in, so that's why I did it. We actually happen to have 1, And it's fantastic. And so we have our publishing business.
We have our subscription business. We have our store. I'm not going to explain this. Talk about the publishing piece for a second, okay? Because this is one of the things that I think differentiates us.
And it's helped drive our business where in the last really since we've acquired the company, we've grown subscriptions over 200%. And as we're doing that, we also have to realize that part of it has to be a value and over time and the uniqueness of the catalog that we may be able to bring to our customers. So Humble Publishing. So what does that mean? So the structure is we focus on indie games and what we call finishing funds.
So let's just call that anything about $500,000 or below. So the game is it's been around for a little bit in terms of development. It's not just someone didn't just come in and draw some stuff on a paper and like, oh, it's a pretty cool idea. He looks like he knows what he's doing. It's a little bit more of that, more than that.
And we have a great team that goes out and sources. And so it's the game is probably somewhere between 6 to 18 months from being able to hit the market. And we come in and we pay a certain amount and that gives us a percentage of sale. Just as if not more importantly, it allows us to include it in our subscription 6 months out for no cost. And that's a very, very important piece.
The more of that supply that we create ourselves versus pay someone else to bring their supply into our ecosystem, it'll start creating that true win win win for everybody. And we also in those instances can license those games. And that's becoming a bigger thing now as everyone's creating their platforms, but they all need content and they need exclusive content for certain windows. And we have enough of a catalog to do that. So retail sales value.
Humble Bundle has a store. We sell games, our owns and everyone else's. And our publishing games also go on Steam. And Steam is the behemoth in the space, right? So if you don't know it, it's the App Store for PC gaming, if you're an Ios user.
The subscription value, as I mentioned, lower content costs and over time, unique and exclusive content. And we are very much at the infancy of that piece. In really less than 2 years, our progress has been we've invested in almost 60 games. It actually probably could be 60 by the last time I round that number. In the indie gaming space, and there's not a lot of stuff to track, we are maybe the biggest.
If not, I can't find who else is putting out the amount of games that we're putting out. We published 21 games to date. This year alone, our goal is to publish about 20. And so we're talking about some significant movement. We also know the games that people play.
So we know what they like. So then we also know what to develop. And there's a game called Temtem that launched in January. It's certainly a hit. It sold over 500,000 units, actually 536,000 to be precise in 2 months.
So to put that into perspective, our largest or most popular game sold 278,000 units in 2 months. A typical and remember, there's about 8,200 games released a year on Steam, not including the AAA titles. The average units on these games, even with the high levels like 5,000 units sold at about a $12 price point. This is our highest price point, dollars 34.99 And so we're very excited about this title. It's also our first game that actually involves multi play and it can really extend itself.
And we're in good position for sequels and those other things. So that's sort of how the flywheel within the flywheel operates for us. IGN is really one point to make here, because IGN, a lot of people know it. And I got a lot of street cred for my kids when they were younger, like, oh, daddy's going to IGN. They thought I was cool for a day and a half.
And but the thing that's very, very important here is this is where the entertainment wars are being fought. You look at what's happening in the streaming wars right now, everybody's bulking up. It is an arms race. What Disney is doing, what's going to happen with AT and T and HBO Max. And when you look at the IP, Disney Plus launch with Mandalorian, right?
That's a very big statement. And we were a significant resource in terms of acquiring customers because of the programming. So we believe and we've seen that IGN is they're kind of like Florida, Ohio and Pennsylvania all in one. We are the battleground states that need to be won in the entertainment race. So we're talking a lot about gaming, but this is the space.
And our brand has never been bigger and has never been more important. And the reason why I chose that particular chart was because sometimes they all IGN has been around for over 20 years. These are the social platforms. These were the new things, right? This is where the old person is not supposed to be able to be relevant.
And we are as relevant today as we've ever been. And that goes back to great editorial content and the people that create it. So we're going to talk about broadband for a second. This is really my version, right? So there'll be other people that may eventually watch this and say, well, there's all these other different subcategories between cellular and fixed.
I'm trying to keep it broad here. But between cellular, DAS, 5 gs, Wi Fi and fixed, And on the bottom, we look at design and planning, measurement and troubleshooting. This is the space we play in, right? This is an immediate business. This is the space that we play in, design and planning, measurement and troubleshooting.
And to put some context around that, the customers really fall into 2 areas, I would say, necessity and expectation. Hospital, it's a necessity. You've got to be able to have good Wi Fi in your hospital. There are 4,000 hospitals with 150 beds or more. We're meaningful to them.
There are 340,000 retail centers, not individual stores, but where Wi Fi is the new way. And you have to have from your store signage to your cash registers. Over 3,000 institutions I'm sorry, education and universities, where Wi Fi is a necessity. Cellular coverage is a necessity. Expectation, 3,000 stadiums and arenas.
There are with over 8,000 seats. There's 67,000 hotels that are 150 rooms or more. There are this is an interesting one, 5,000 transportation hubs that see over 800,000 passengers a year. This is the economy at scale is what we're talking about. And we play in all three of those sectors across all five of those categories.
Talk a little bit about and you'll see how they sort of line up in the way we grade ourselves. Ekahau has been a fantastic acquisition for us based out of Finland and offices in Reston. We are the preeminent enterprise planning tool for Wi Fi. And we continue to launch new products. And we are, I think, just starting to hit our the product was always good.
It needed a little bit more rigor on the product life cycle development, smaller business, but we can come in with cash, we can accelerate that. But also the sales part of it. Sales is a big thing. It can't be overlooked in what we do. And we've created a sales structure and approach and a rigor that actually now the market really understands how good we are.
Before, maybe they just didn't see it as much. And now we see it globally. And that's very important. Speed test, hopefully most people know it. I would say of all our brands, actually people speed test is the one that most people know, but they don't know until you say, oh, well, it's that thing on your phone and they go, yes, I use that.
I mean, if you've had your cable provider, your cable technician over or you're using that before they walk out. We are at the enterprise and at the consumer level, we are the trust factor. We are what KBV being in the consumers' hands and Edmunds True Value being in the consumers' hands is what took the pain out of buying a car because there was a trust factor issue there. Well, that's what's been happening in this bit. We are now we've broken down that because everyone can see the same information on both sides.
And because of that, we can work with the carriers to make sure that they're delivering the highest quality plans that their consumers are paying for. And we take that as a very meaningful piece of what we do because it's becoming a larger and larger part of your home budget. So there's a few opportunities that we're focusing on. I mean, we've got a bunch of opportunities. But when we look at 2020, reviews, rewards and ratings, I see no reason to do anything but double, triple, quadruple down on authoritative content on the NBC categories.
And you'll start to see us peak into some other verticals. I feel confident enough in our leadership and in our infrastructure that what we can apply could work in other verticals. I won't mention any because I don't want it to be taken the wrong way. Surveys and research. So we have this wonderful audience that we get licensing dollars add up.
But we actually don't ask them a whole lot for marketers. And how can they benefit from participating in those surveys and in those research polls and questions. We think there's an interesting business in there. We've seen it in a lot of other sectors. And we're certainly going to be going after that.
Crowdsource, we're going to double down on this. It already exists in Speedtest, SpySource, Downetector. These are all crowdsource tools. We need to do a little bit more crowd sourcing of our audience for content, but also for the data because the crowd, the wisdom of crowds, if harnessed correctly, it other areas. Attribution, big deal.
So privacy compliance, future of the cookie. I'm on the Board of the IAB. I spent a fair amount of time looking at these things and considering these things. But in the end, whatever happens there, I want members. I don't want users.
I want customers. I want members. And that's what we're going to focus on. Because when you have that, the methods of attribution that happen on the Internet are pretty much irrelevant. And M and A, which you'll hear from Sean in a little bit, our aperture has never been bigger.
Part of that is because of the mechanism and the programmatic aspect of what we do. But also, we as a team, as at Davis, we've done every shape and size now. We've done renovation M and A. We've done tuck in. We've done growth, big and small.
And we are not daunted by whatever challenge that could potentially come from an asset. I'm not going to go through the every picture on the slide here, but we have an incredible team and it varies in skill set. So Yael Pro, who is the GM of IGN, she's been with IGN for well over a decade. When we first acquired the company, she was running LA sales. She has grown with our organization to run sales, to be the GM.
And because of that gaming knowledge, she's the perfect GM for this. And we're very, very fortunate to have her in that role. You have someone like Jeff O'Meara, he came in right around when we did the Ekahau acquisition. So he was as new as the Ekahau acquired company and those employees. And that's worked out great.
We've got Doug Suttles, who is the founder of Ookla and is still with us after all these years. And so I'm not going to go through everybody, but we have a very diverse team that frankly make me look a lot better than my profile picture. And they are leaders in their individual areas. And they do M and A really well. So in conclusion, as Nate had mentioned, there's a few things that I'd like to leave you with.
We are growth minded. It's just you can't say that enough. Grow, grow, grow. And but you got to do it in a diversified way and you got to be balanced. My division and the BUs, we've got to have enough legs to the stool so everyone can stand on their own.
You have to be protected. You have to have your barrier island for whatever next storm that may happen. And we focus on that. We've done a nice job over the last 5 years. We've doubled revenue and EBITDA dollars over that period of time, while changing the DNA of how we make that money.
Delivering customers is what's most important to us. Owning is a good thing. Owning a relationship with our advertisers, with the supply chain, not outsourcing the part that's hard. That's the part that a lot of people outsource. Don't.
We do the part that's hard or ugly. Have these relationships with 100 and 100 of merchants. Go collect your own coupon codes by the 1,000,000 and sift through it. Because hard is actually defensible. A lot of times people think technology and we got this, no one else has it and we're going to patent it.
I'm telling you, rigor and hard work is defensible and that's what we do here. M and A has been good for us. We're not relying on it. We use it as one of the tools. And as I mentioned, our management team is fantastic.
And at some point, I hope you get to meet all of them. My time is up. That's Ziff Davis. I'm going to hand it back to Scott and you're going to meet Dan. So thanks.
Thank you, Steve. Thank you
for taking us through and really unpacking Ziff Davis and the transformation evolution it's had over the last 7 years, not only moving from the small tech business that J2 bought in late 2012, but also the diverse forms of monetization. Now we're going to turn our attention, as Steve just mentioned, to healthcare. As many of you know, we bought Everyday Health in late 2016. It was a publicly traded company. 2017 was a very interesting year in terms of reformulating that set of assets.
We divested 2 of them during that year in 2 separate transactions, also called out some revenue that was unprofitable. Shortly after that, in 2018, Dan Stone, who is now the President of Everyday Health Group, came into it and he's now taken those assets and he's put really I think an interesting take on not only what they do today, but how they can take advantage of trends in the healthcare space. So I'd like to welcome up to Dan Stone, President of Everyday Health Group.
Thank you, Scott, and good morning, everybody or good afternoon, everybody. It's somewhat fitting that I go 3rd because being in the healthcare space, I live in the same industry as Steve Horowitz actually, as Nate Simmons on the cloud services business. We're fundamentally a digital media company, like Steve Horowitz with Ziff Davis. But as you probably know or will learn, there are special things about the healthcare business that make it distinct and require a distinct focus. I don't believe, correct me if I'm wrong, but I don't believe there are any healthcare analysts here today.
But I'm 100% sure that everybody personally cares about healthcare. Whether it's health and wellness, getting up early in the morning and exercising or it's taking care of your own health or it's taking care of it's being a caretaker. And of course, in the news today, it's a combination of coronavirus on one hand and the healthcare stocks exploding on the other hand because of what seems to be the decline of Bernie Sanders. So healthcare is a very exciting space and very personal. Speaking of personal, let me give you a little bit of my background.
I've been in the media business for over 35 years, started in consulting and investment banking, serving media companies, and then joined one of my early bosses from Booz Allen, who Ted Turner brought into Turner Broadcasting to build their ad sales business. 1st on the domestic side, where cable television was under penetrated relative to broadcast and people the agency community underappreciated the targeting capability of cable. Obviously, you've got a very different audience with ESPN or Cartoon Network. And that really foreshadowed a lot of the work that actually went on in digital media. Also within Turner, I was responsible for launching our Turner cable networks around the world, local versions of Turner cable networks like CNN.
And I was there at the very beginning of the commercial internet starting the commercial operations of cnn.com@turna Broadcasting and was one of the founders of the IAB, which Steve mentioned he's now a Board member of and Vivek was formerly a Chairman of the Board. Then we had the dotcomboom and I joined a company called SCIENT, was a private company that was an eBird Business Services company building industrial strength websites for, in my area, companies in the media entertainment space. And all these companies did not have new media departments yet. So, I'm particularly proud of mlb.com, which we built and they had 0 new media they had 1 new media employee at the time. And, dollars 40,000,000 later, they had a website and we had opening day and that's still here today.
Obviously, it's a lot cheaper these days. Thank God. We went public, became one of the dotcom darlings. And then, of course, you know the other side of that story. And coming out of the dotcom crash, I took over what had been a well funded, but troubled Internet company that was focused on science.
And I eventually, through acquisitions and development, developed a company called Imaginova, which is a combination of imagination and innovation focused on the science and technology vertical. And it was really a predecessor to the work that Vivek and Steve did at Ziff Davis, which is it was an integrated content and commerce model. We would monetize impressions either through advertising or we move them over to our e commerce sites where we sell them telescopes or astronomy software. Now, while it was very cool to have Neil Armstrong on my board for several years and be able to work with him, One thing I learned is the expression TAM. And the TAM of science is actually very small.
So when I was given the opportunity to become CEO of a healthcare media company and looked at the size of the healthcare business, I got very excited. So Accent Health was a private equity backed company. It has screens in doctor's office waiting rooms that are able to target advertising based on the specialties of the doctors in the office and their prescription volume against different drug categories. And then after their ads ran, we would be measured by 3rd party firms to measure prescription lift that would give the advertisers an ROI on their advertising investment. We successfully sold that business.
And then as I was looking at the next opportunities, I was introduced by Sarah Fay, one of our board members from the media world, introduced me to Vivek. And the everyday health opportunity really brought together the work I had done in digital media and the work I had done in healthcare. When I first looked at getting in the healthcare space, I was warned by a lot of my media friends, stay away from healthcare. It's a really big market, but it's complicated. There's regulation.
You got to deal with the FDA. Pharmaceutical companies are slow. But what I soon came to learn is once you figure those out and you're building the systems to deal with privacy, to deal with regulations, it's an inherent barrier to entry to others. So you have an unusually large market with much less competition than in the other similarly sized verticals. So the mission of the Everyday Health Group is to drive better clinical and health outcomes through decision making informed by highly relevant information, data and analytics.
Our approach is to empower healthcare professionals and consumers with trusted content and services delivered through Everyday Health Group's world class brands. Steve emphasized trust as being so important. Trust within a healthcare context is as fundamental to the way we do business. Now with coronavirus, it allows us to show what we can do. And it's just it's so exciting to watch what our teams do because everyone needs to have more information on what coronavirus is, how it's affecting their community.
So they come to places like everyday health groups of asset, consumers and professionals. And if we haven't built that trusted and credible reputation with them ahead of time, we would not be the place they go. So this references the conversation that Scott started with. This is the history of Everyday Health acquired by J2 Global at the end of 2016. We had our shrink to grow phase, which has been a successful strategy employed by J2.
We sold 2 non strategic low margin assets Cambridge Biosciences and Tea Leaves in 2017. Before the end of 2017, we bought a spin off of a larger job listings business called Healthy Careers, which focuses on healthcare workers. Bought a data business called Life Script and that's right around the time I joined the company in April 2008. Since then, we've done 3 acquisitions: Prime, a continuing medical education company in Fort Lauderdale Castle Conley, a healthcare ratings business that rates the top doctors, which you've probably seen in flight magazines. And then most recently, and we're very excited about this, baby which together as I'll show you with our what to expect product, which together, as I'll show you with our What to Expect product, we have a very dominant position in the pregnancy and parenting vertical.
I think Steve made 3 allusions to me in pregnancy. And it clearly was not because I was pregnant nor my wife's pregnant. So it's strictly a business reference. So here's a financial snapshot of the Everyday Health Group. We're growing and we're diversified.
We have a compound annual growth rate since 2017 of 11%. It's about a 21% growth over those 2 years. Just a note on this data, it excludes the 2 divested businesses that were would have impacted 2017 results. And if you were to compare them to when everyday health was a public company, you'll see that we have lower revenues, but we don't see because we're not disclosing it here as a separate segment that we're significantly more profitable with a significantly higher profit margin than the old Everyday Health. And looking forward into 2020 beyond, we expect to be surpassed in terms of total revenue very shortly.
But I was told I couldn't show forecasts here as much as I'd like to. We have diversified revenue streams. We're still predominantly advertising based, but there are some subtleties here in the advertising market in the healthcare advertising market that are important to explain. So 35% of our revenue is action based marketing, performance marketing, cost per action, cost per unique visitor, cost per engagement, which we use on the physician side of our business, Cost per new people brought to a condition. So that is kind of classic performance marketing.
And then we have 41%, which is impression based advertising, display advertising. But 60% of that is sold to pharmaceutical advertisers. And because of the privacy restrictions within the healthcare world, we cannot know that a particular person bought a particular drug in reaction to that ad. But certainly the pharmaceutical advertisers want and need to know that. So they are either measuring themselves or measuring through 3rd parties what either the number of customers we help drive to their treatment or their lift in prescription and then they can calculate the ROI on the investment.
So our renewals are very much objective measures of our ability to draw people to our sites. And it's also important to note here, well, I should say also that similar to the evolution of Ziff Davis, we are looking to expand into non advertising areas. We have 14% in subscription, 10% in services. And when I talk about the evolution of the business going forward, it will naturally lead to that being a higher share of our business going forward given the areas of growth that we're focusing on. But I also want to talk about some things you may have read about restrictions on cookies and the inability to track privacy restrictions on tracking people across the Internet.
Well, that's where we have an advantage as having first party contact. So we can we know we can identify either condition sufferers based on the type of content that they visit within everyday health. And we can then track where they go on everyday health. So we are actually in a better position if those restrictions ever come down because we would have a huge advantage over pure ad tech companies that are just selling their ability to retarget. And they're not a primary destination in the 1st place.
So we break our markets into 4 we break our business into 4 markets. The first being consumer. Hopefully, you're all familiar with everydayhealth.com, which is a broad health and wellness site. We also run the commercial operations for Mayo Clinic, mayoclinic.org. And we run-in conjunction with the Mayo Clinic, the Mayo Clinic Diet, which is a subscription product.
So the websites focus on both health care and health and wellness. It's condition specific, consumer patient and patient centric media. On the commercial side, it's serving primarily pharmaceutical advertisers, which represent the vast majority of the advertising on the everyday health in the Mayo Clinic sites. In total, we do about $75,000,000 to $80,000,000 in 2019. Then moving on to our professional market, which is serving healthcare professionals varying stripes.
Our core product is called MedPage Today, which is a newsletter business and a website business and an app business with condition specific content focused on physicians. Underlying this is very strong affiliation with medical societies. We actually curate areas with medical societies on areas like oncology and rheumatology and other major conditions. And again, this is primarily supported by pharmaceutical advertisers and that's about a $45,000,000 business. And then our pregnancy and parenting market, originally we own the digital rights to the What to Expect brand, which we've owned for many years.
And then as I mentioned in the 4th quarter of last year, we acquired BabyCenter from Johnson and Johnson. So collectively, these primarily serve moms, but they also serve parents in general. Everything from fertility, trying to have a child to being pregnant to raising toddlers. It's predominantly an app business. And I have to say it is the most natural app there is.
And it's actually one of the earliest apps, pregnancy trackers were one of the earliest apps ever provided. Because think about it, when you sign up for the for either the baby center or the what to expect app, all you have to do is put in whether you're the expectant mother or father and your due date. And we know everything we need to know about you for the next 9 months and beyond in terms of serving content, in terms of directing you to the right community. And from a marketing platform standpoint, the marketers can very closely target where they want given where they sell their products or services in the life cycle of parenthood or pregnancy. So it's incredibly profitable.
And that's about a $50,000,000 business. But I'll have to say that because we bought BabyCenter in the Q4 of 2019, kind of understates the run rate business in that market. The 4th and newest part of our business is broadly called provider services. The distinction here is in provider services, whether they be doctors or hospitals or hospital systems, the end customer is in fact the hospital. It's not us delivering an audience of professionals.
It's actually serving the professionals directly. And we have 3 businesses there. We bought a company called Prime, which is a leading brand in the continuing medical education space for healthcare professionals. This allows doctors to maintain their certifications. This is a combination of online events and live events.
We have Healthy Careers, which I mentioned before, which is the leading HCP healthcare professional job listing sites with strong affiliations with medical societies. And Castle Conley is the leader in health care provider research for over 28 years. It is the big brand in the space. So it's highly sought after honor at your doctor's office. You may see a plaque on the wall saying they're a Castle County doctor.
That's a good thing. And it's a trusted source for consumers to identify good doctors. It's kind of the digital version of calling up your primary care physician or asking your friend who's a doctor who you should go see for this next condition or specialty. But this does it in a much more efficient way and broadly across the country. And this is about a $42,000,000 business.
So as the newest of the 3 divisions of the business, are the amount of revenue we have in each of our markets are a little less than we would, which is ideal. We should have about $100,000,000 in each of our business units. But given the growth trajectory on and the opportunities we see in the market and the full year actualization of acquisitions we've done recently, we think in the very near future we'll be at the $100,000,000 level in each of these markets. That's how we're thinking about growth. And we're also thinking in a total basis of moving from $200,000,000 to $500,000,000 over the next few years.
By providing these content and services, we've aggregated some very valuable audiences, which we call marketing platforms. And these are massive reach of people in each of these categories. And there's massive dollars involved in each of these markets. Channels. We have 46 particular high value conditions that we get very high scores in terms of the credibility of our content and how we engage with consumers.
We're very young, which skews more to the health and wellness side versus the healthcare side. And from a targeting standpoint, on any given day, we can target on 2,300 different measures the audience based on what an advertiser is looking for. We own a data management platform internally. And it really allows us incredible flexibility to target our user base. On the professional side, we reach about 830,000 of the 1,000,000 or so doctors in the U.
S. Particularly in the top 30 specialties. We reach about 80% of the doctors with about 2,200,000 active monthly website users a month. This isn't all sitting behind their desk. They're using it mobile just like the general population.
And importantly, a extent as a clinical tool. So it's not just casual. It's actually serious content for them. On the pregnancy and parenting market, we own the number 1 and number 2 pregnancy apps with BabyCenter and What to Expect. 90% of U.
S. Pregnancies each year register with 1 of our properties. That means we know due dates and emails and whether it's an expected mother or father for 90% of the pregnancies in the U. S. At any given time.
In particular, our reach with first time loans is exceptionally high at 90%. For those of you who have multiple children, you understand that as you go to number 2 and number 3, you start taking less pictures and fewer videos. And you figure out you figure you know it all anyway. So you may use a tool like this less. So that's probably our sweet spot would certainly be with 1st time loans.
We have a thriving newsletter business on a global basis. I should mention that the baby center business brought us into 9 additional languages and an international footprint, whereas our What to Expect business is domestic only. So we have 15,000,000 global newsletter subs. And this is an incredible statistic. There's a BabyCenter or What to Expect app downloaded every 4 seconds.
That doesn't mean that they all registered. That's our the job of our marketing departments that they do, but it's just an incredible velocity of activity with our apps. And we have 27,000,000 monthly unduplicated visitors to our various sites, 50,000,000 on a global basis. On the provider services business, it's a mix of type of reach. We have cumulatively reached 1,200,000 job seeking healthcare professionals.
And with all the there's actually more demand than supply of healthcare professionals. So healthcare systems are constantly reaching out for both primary care physicians where there's a big shortage or some of the key specialties where there's competition for practitioners. We have affiliations with 27 medical societies. On the CME, the continuing medical education part of our business, we issue about 180,000 certificates to doctors each year. There are 60,000 Castle County top doctors around the country.
So it's an exclusive group. That's 60,000 out of 1,000,000. And there are Castle County doctors that have been nominated by their peers at all top 20 of the top 20 major health care systems. So not only do we have tremendous reach into each of these markets, but our competitive positioning we believe is very strong with some implicit barriers to entry. So the combined consumer properties we have are the number 3 largest network of healthcare consumer properties.
The content itself is focused both on healthcare, which is seeing a doctor going into a clinical setting or self care, which could be fitness or it could be just healthy living. The mailclinic.org site itself is 8 times larger than the next hospitalfacility.org. Cleveland Clinic, Harvard Medical School, you name it. It's 8 times larger. They built an incredible niche and that's part of our network.
The barriers to entry in this space is really a significant investment in content over time that's trusted, trusted incredible and that's very SEO friendly because that's the strongest way that we get new users to the site. Now, we all are faced the issue of Google and the ongoing algorithm changes that Google implements across the industry. I'd say the good news in the healthcare space is Google takes particular focus on this. They have something called your money or your life, which applies to health care sites and particularly consumer financial sites, things that are near and dear to our lives. And their guidelines are particularly stringent on how they analyze the quality of sites and their page rank in the site.
So while that means the bar is high in terms of what we need to produce, It is something specific to shoot for. And they look at expertise of the content, the authority of the content and the trust of the content. And that's something that you just don't turn on. That's built up over many years. And in Mayo's case, they have the highest domain authority as measured by one of the services across all the brands in the space.
And they are just killers in the SEO side of the world as well. So that's our consumer business. There's even greater barriers within our professional business driven by the amount of time doctors have to actually spend time with media. As you probably heard your own doctors complain about the number of patients they need to see every day and there is less time with each patient. They don't have the ability to read 6 different sources.
There are really only 2 or 3 that are in their consideration set every day. And MedPage today is one of those. It's the number 2 largest ad supported news site for professionals, for physicians, driven by daily targeted newsletters. So if you were to be a recipient of the newsletter now, you would see a coronavirus story at a very clinical level given the audience of physicians every single day. So it's we try to ban ourselves as an indispensable resource for healthcare professionals.
And similar to our consumer business, this is based on tremendous editorial expertise built up over many years, which drives SEO. And I should also say that the privacy side of our businesses are have a very high barrier as well. So with GDPR in Europe and the California privacy protections, it's like show us something new. We've been dealing with the HIPAA regulations and much more stringent privacy regulations than most other verticals for as long as we've been in business. So this is just something that we're used to.
We're used to dealing with privacy issues at the forefront. In our pregnancy and parenting business, we by far have the vast market share in the business. As I mentioned, 90% of U. S. Pregnancies register with us each year, published in 9 languages across the world.
And so we're not only relying on that market share, but we're also continually coming up with new content and tools. The good news is that despite everything that may change in the world and with technology, that 9 months is going to be 9 months. And that 9 months is the same in New York as it is in China, as it is in South America. It's a very natural occurrence. But the digital media tools that we can employ to make that experience more relevant, we can constantly be upgrading and we do.
On the provider services part of our business, so much of this also relies on trust and reputation. Prime is one of the top continuing medical education brands in a very highly fragmented market. They win awards for the quality of their research every year and they justify the investment in the education by showing outcomes research that the education that the doctors received actually resulted in better outcomes for patients and use of therapies and adherence to therapies. I mentioned we have the number one job listing site for healthcare professionals. And we solidify that competitive position by our associations with various medical societies.
And Council Conley in a field of what you're starting to see within the doctor rating space is Yelp is in there. It's kind of become the open table of doctor ratings. But whereas you're willing probably online to look at, OpenTable or Yelp to decide whether to go to a particular restaurant, I would hope we all have a higher bar as it relates to being referred to a doctor. So the trust that's inherent in the Castle Connolly brand is a significant barrier to entry for others. So our core competitive set is made up of other probably well known to you, healthcare media and services company, WebMD, Healthline, Healthgrades.
And while there are substantial competitors in each of our 4 markets, we really benefit from the differentiation across these markets. We're the only one who has a significant stake across the 4 markets that I mentioned. You'll also note when you look at ownership that other than everyday health being owned by J2, they're all private equity owned. Given the size of the market, the growth of the market and the very favorable cash flow, EBITDA and cash flow characteristics, that has lent itself to a lot of activity in the private space. There are a number of trends which you probably read about virtually every day.
About and a lot of them are fodder for the political scene today. But there are a lot of dynamics in the industry that in aggregate are very favorable to our business. So we have an aging population on one hand, which means more focus on health care, which is unfortunately driving up health care costs. And the rise of the millennials on the other hand, which are more focused on self care. And this is true both in terms of the way we need to talk to both patients and doctors.
Because guess what millennials are now doctors. So the way you reach a millennial is very different today than it certainly was 10, 20, 30 years ago. Overall, you'll hear the term consumerization of healthcare, which is which patients and consumers are more ingrained in choices in their healthcare, both out of necessity and out of desire. And they need information in order to be able to hold their own really with the whole healthcare system and their doctors. The other thing that's driving this focus on self care is cost.
Increase in high deductible plans where more is coming out of pocket and more cash pay consumers who don't have insurance. This focus is also true with employers. An increase in self insured employers, I wouldn't be surprised if many people in this room, employers are self insured. J2 has been self insured for a couple of years now. What does this all mean?
It means that both for the patients, the consumers and for the employers and the payers, everybody has a vested interest in people being more healthy. The healthier people are, the less costs there are in the system, cost to employers, cost to insurance companies, cost to the patients. So again, this just creates the need to educate and inform patients and consumers. Our primary advertisers are pharmaceutical companies, which has been a very healthy space. Over the last several years through changes at the FDA approval process, There have been more rapid drug approvals.
The last couple of years have had more drugs approved, than in ever for any given year. And they're increasingly focused on targeted high value patient populations. Unfortunately, it gets a lot of bad press because they tend to be very expensive. But you have drugs like Harvonia by Gilead that cured hep C. So the outcomes are also very, very impressive.
Physician access is challenged for the pharma reps because doctors are so busy. They used to the pharma reps used to just walk in the door with samples and with an iPad to train them on their therapy and on their drug. The doctors just don't have time in today's world. And so it's really caused pharma companies to look at non personal promotion, not involving live sales reps, which lends itself again to the type of products we have reaching doctors through news products, for example. Then in the health care system overall, there's an increased focus on transparency and pricing or the high prices on one hand and transparency in the other and whether things are medically necessary.
A lot of focus on that. And actually to that end, we recently brought on a new Editor in Chief, to our MedPage Today business called Marty Macri, who wrote the book called The Price We Pay. He's a doctor at Johns Hopkins and an expert in pricing for our healthcare services. And if you haven't read the book, I'd encourage you to go out and get it. It is scary on one hand and fascinating on the next.
But it really just shows some of the dysfunction in our healthcare system that needs to be solved. The other thing that needs to be solved and this may hit home with a lot of you who have had to navigate your own care or cares of loved ones is the good news is all sorts of new technology has come into the healthcare market. Google's here, Amazon's here, Microsoft's here, 100 of 1000 of digital tech apps. But then how do you navigate that? There is no one necessarily to go to help you navigate.
And when you're in that situation, you try to do the best you can to become an expert quickly. But the concept of matching the right patients with the right providers and the right treatments across the patient's journey, technology and digital technology is a way that that can be enabled and that's a key area that we're looking at. And then on the healthcare media side, relative to other verticals, there's an under penetration of digital media spend in the health care vertical relative to others. Pharma advertisers have stubbornly hung on to mass market vehicles like broadcast TV and magazines. All that's changing and I'll show you in a bit.
And the healthcare systems increasingly look at data, whether it's big data or artificial intelligence applied to the huge amounts of data in the industry, which is both increasing efficiencies on the cost side and improving outcomes. And really across the board, there's a rise of digital solutions across the value chain. You'll hear the terminology, the digitally enabled consumer. So in aggregate, what we're really seeing here is a digital transformation of the healthcare business that manifests itself into a lot of different products and services and capabilities. And so our job at Everyday Health is really to pick our shots.
And I'll talk a little more about the way that we think about that. So some statistics. You've probably seen this, but an unbelievable 18% of our GDP is focused on health care expenditures, dollars 3,700,000,000,000 and it's growing each year. And so whether it's universal healthcare or Medicare for all, it's all about bending this growth curve. And within that, pharmaceutical spendings are going up, largely driven by the increase in new specialty drugs, the increased approval rate at the FDA.
So given this is our underlying advertising base, it's a healthy sign for our business. Within the ad side of the healthcare business, about there's about $3,000,000,000 spent on digital advertising relative to $15,000,000,000 overall. And one of the challenges for traditionally for digital advertising in healthcare is that the relative amount of digital advertising again is behind other verticals. In fact, notwithstanding the size of the healthcare market, you see on the left side, the healthcare and pharma advertising is only 2.6% of total digital advertising. But if you look on the right, that has been changing and it will continue to change as is a shift from TV and magazines to the Internet.
You probably I don't know if you focused on this, but I'm a gout sufferer and I take a generic drug every day that keeps my gout in check. And gout affects a very small percent of the population. A few years ago, there was a drug called Uloric, which was all over the TV, all over prime time, all over major sporting events. And that's geared for people who have gout, who do not respond to the generic treatment, which is a small percent of a small percent. It makes no sense from an ROI standpoint, where you have a vehicle like broadcast that is not targeted.
And so that's what's with the pressure, the profit pressure these companies are under, they're finally shifting more and more of their business to digital, which accrues to our benefit. On the professional side, advertising only represents 6% of overall expenditures to healthcare professionals. 2 thirds is a sampling where they're actually giving out free drugs. 26% is detailing. That's where the rep physically goes to the doctor's office.
But as I mentioned before, it's increasingly difficult for reps to get in the office shown by the chart on the lower right that in 2,000 and 8, 80% of doctors allowed reps in their office. By 2017, only 46%. So we have the answer for that, which is non personal promotion, which is the professional advertising side of our business. So in terms of how we think about growing our business, we think about it in respect to connections, connecting patients with services and tools, connecting patients with providers, connecting and supporting providers, connecting employers and payers with their employees. Fundamentally, it's about digital information and tools providing connections between the major constituents in the space across the healthcare ecosystem.
Which is why as you look at the universe of healthcare media companies, there's been a shift. There are many fewer pure healthcare media companies like Everyday Health originally was. There's been a movement toward the healthcare service and healthcare IT side of the business where most of the public companies evolve. And it's not only because the multiples are so phenomenally high in the HCIT space, but it's also because virtually everything we're talking about is about digitally enabling aspects of the healthcare system. So it only be natural for companies like Everyday Health and others in the space to leverage the market reach we have and the capabilities we have to move beyond pure media into the services side of the business and the digital enabled IT side of the business.
And so provider services is really our entree into the services side of the business, the HCIT side of the business. So in October 2017, we bought Healthy Careers, which is a spin out of a much larger recruitment site. That was a shrink to grow strategy. We dropped product lines. We dropped unprofitable product lines.
We invested in the more profitable product lines. Prime was a very high margin business when he bought it, but it was owned by the founder, who was very conservative with growth. And so that is a growth investment. So, Steve talked about the Steve, what was the word used? The 2 types, growth and renovation.
So Healthy Careers is a renovation play and prime is a growth play. You put those together, combined purchase price of $83,000,000 $15,000,000 in EBITDA contribution in 2019, so for effective 5.5 times multiple. I'll get a little defensive here because we've owned them for less than 2 years. So, we haven't really even achieved most of the upside we hope to get out of these. So, I would expect that that multiple to go down significantly over the next couple of years.
And thanks to Sean Alford and our corporate development team who works alongside us to make the M and A side of our total growth strategy sing. So further way we look at identifying growth opportunities is to think in terms of patient journey. So as a patient, you have a symptom or a need to go online to research the condition. Hopefully, you go to everydayhealth.com. You research the doctors in that space or the healthcare facilities.
You use a method to select a provider, hopefully Castle Connolly, if not a friend and family or your PCP, then you decide to book an appointment. You have two choices when you book an appointment now. You can go to the physical point of care at a doctor's hospice or a hospital or you can do an e visit through telemedicine. In either case, the appointment is just the beginning of the journey. There's everything that happens after the appointment.
There is adherence, big challenge about keeping people on therapies, keeping people on treatments. There's referrals to other doctors in the hospital system or outside the hospital system. There are surveys at the hospitals and the doctors need in order to get reimbursement from Medicare. And there are ratings and reviews, whether it's Castle Colony or other, because like it or not, doctors have to worry about reputation management. They have to worry about the cleanliness of their waiting room and about how long they make you wait in the waiting room because it's going to show up online.
And this cycle unfortunately continues around because usually solutions aren't solved on the first pass. So as we think about areas, we think about this in a few different ways, areas of internal growth, areas working with Sean on M and A and also in areas, let's take telemedicine for example. So the dark blue are the areas that we're not currently in that we are looking at getting in. If you look at the valuations, companies like Teladoc in the telemedicine space, the valuations are out of sight. It's really not an area we can directly play in.
But given the marketing platforms we have and the access to patients at the time that they're worried about their condition, at the time they're thinking about doctors and at the time they're booking appointments, we can curate a set of services to help give them a choice to find the best telemedicine provider for their particular condition. And this could either be in the form of supporting an ad supported model where just their activity on our site drives ad revenue. But where we we are also thinking in terms of developing a marketplace where we partner with these services to actually get paid for referrals in the cases that we can because there are regulations in this space. And so really have a marketplace. So we become one stop shopping for someone to research their conditions, to find doctors, to book appointments, and then to actually get to the right facility.
And the trends really support really the digitization of this patient journey. The Internet is the number one preferred source of information for health conditions by far. And there's a demographic element here that younger patients prefer online appointment booking by 2 times over baby boomers. And clearly, they're just much more comfortable with it. And it's the first thing they think about, not the old fashioned way, which is all these things leading to an explosion in telemedicine, which I think is like the utmost example of digital applied to the healthcare market and really bringing together all aspects of finding the right patients with the right doctors and treating them at the right time.
There's no better expression of that than the telemedicine market. We too have a very experienced senior management team, which is a combination of people who are deep for many years in the healthcare space. In the case of Nan Forte, who was an original WebMD and Healthline Media to the health and wellness space. Heidi Cho who runs our pregnancy and parenting business, comes from the health and wellness space at Rodale, Hurst and Hachette. And Jeff Blatt is an expert who runs our professional business, is an expert in direct marketing and customer acquisition.
And he's learned a lot about the healthcare business. So we have a really great mix of classic marketers, digital marketers, and healthcare media professionals. Supported by other talented people, to Brian who runs our prime business in Fort Lauderdale, Greg Chang, who runs our Healthy Career Business in Denver, Tom Dean in the back row, who is our Head of FP and A Extraordinaire and our, Deb Getz, our Head of Human Resources. This is our executive management team. In addition to being highly qualified, I'm very proud of the diversity of our senior management team, which also resembles more broadly the diversity across everyday health overall.
So in summary, we have experienced a successful financial and business evolution since the November 2016 acquisition of Everyday Health when it was a public company. We're exhibiting strong revenue growth with increasingly diversified revenue streams. We have a powerful and differentiated consumer, patient and provider engagement platforms. I hope I expressed to you that we have strong indefensible competitive positions across healthcare markets. We have a numerous favorable digital healthcare market tailwinds driving massive market potential across our 4 different markets.
We have a total growth strategy, a well developed organic growth strategy and an M and A driven strategy, driven by a very experienced and successful group of managers. Thank you very much.
Thank you, Dan. We're going
to be turning our attention now to mergers and acquisitions. And I would just note that Everyday Health was the largest transaction in the company's history. The gross purchase price of about $500,000,000 in late 2016. Obviously, we thinned that down through the 2 divestitures that Dan mentioned in 2017. And thank you, Dan, for really elucidating the opportunities that exist in this very large portion of our economy.
Hopefully, it's given you an idea of how a platform transaction can be evolved to take advantage of more than just what was initially purchased. Now, you've heard us talk a lot about M and A. Each of the 3 division presidents have done that. They've each used them in a very appropriate manner to build, grow their businesses. I can tell you 20 years ago, J2 did its first acquisition because I was there.
And I would say that in the 1st 10 years, it wasn't so systematized. We had rules for the road, but we really began to about 10 years ago build a true systemization for our M and A. And so much so that we now call it the programmatic M and A of J2. So we thought it would be helpful for you to get an in-depth view of how we look at M and A. And in order to do that, Sean Alford, who is the Senior Vice President of Corporate Development will come up and he'll take you through both some numbers so you can get a sense of the success we've had, but also give you some depth in terms of how we actually go about finding deals and then successfully bringing them to conclusion.
Sean?
All right. Thank you, Scott. So let's talk about M and A. There are 3 topics that I want to cover in my portion of today's session. 1, I want to give some historical perspective on the M and A platform at j2, particularly over the last 10 years and highlight some patterns that have emerged.
I also want to explain how the acquisition system works, how we identify, evaluate, prioritize and execute with such high velocity and conviction. And finally, I'll conclude with a recap of M and A activity in 2019. But before we dive in, I'll give you my background. As Scott said, my name is Sean Alford. I'm Senior Vice President of Corporate Development at j2.
And I've spent my career focused on corporate transactions in the technology, media and telecom sector. I've worked on public company M and A, private M and A, equity transactions, debt transactions, minority investments, joint ventures, strategic partnerships, all in and around TMT. I've worked as an outside advisor at a New York law firm and I've also worked as a principal at a large cap media company and most recently at j2 where I've been for 3 years. And it's been a busy 3 years. Since I've been at j2, I've been a part of 25 acquisitions and put to work over $900,000,000 of capital on M and A.
But that rate of activity is not unique to me. It certainly predates me. When you look at the last 10 years of activity at j2, you see a similar volume and pacing, which this slide illustrates. Since 2010, j2 has completed 157 acquisitions and put to work over 2.5 $1,000,000,000 of capital on M and A. As we've studied our acquisition history, particularly over this 10 year period, there are some consistent patterns that have emerged that we believe demonstrates the success of our approach.
And I want to highlight a few of those for you today. Number 1, there are 2 very clear types of deals that we do. And you've heard Vivek and Scott talk about this. There are tuck in acquisitions and there are platform acquisitions. On the tuck in side, there are 3 basic types.
Number 1, there are customer acquisitions, where we acquire and migrate a competitor's customers onto our platform. You've seen this historically at fax, voice, backup and more recently in consumer privacy with IPVanish. Number 2, there are audience acquisitions, where we see a strong but under monetized audience that we believe we can monetize through our expertise in ad sales, subscription models, lead gen and other revenue models. Mashable, BabyCenter and Spice Works fall into that audience bucket. And then finally, the 3rd type of tuck in is product acquisitions.
This is
where we've identified a high quality product that needs access to sales or distribution or access to audience that we have in our portfolio. Castle Connolly and Downdetector fall into this bucket. Then there are platform acquisitions. This is an acquisition of a company that can stand on its own, typically in a sector where we see additional tuck in opportunities. Most of our 13 business units are built around platform acquisitions made in the last 10 years, what you see here.
And there are 2 types of platform acquisitions. There are platform acquisitions within a division and there are platform acquisitions that merit the creation of a new division. What this layer cake graph shows you is the impact of the larger platform acquisitions, the new division acquisitions. In the last 10 years, there have been 2, Ziff Davis in 2012, Everyday Health in 2016, both of which have had a very positive impact on the total growth story at j2. And right now, I can tell you, we are actively evaluating and have the financial capacity to execute on a new division acquisition that would add another layer to the total growth story at j2.
Now a few interesting data points for you when you look at tuck ins and platform acquisitions. I said 157 acquisitions in 10 years. Around 145 of those, the vast majority were tuck ins with the balance as platform acquisitions. A very different story emerges when you look at the allocation of capital between the two types. Dollars 2,500,000,000 of capital deployed, around 1.3 1.2 on tuck ins.
To borrow a sports analogy, tuck ins are our running game. They're steady, lower risk that gets you short yardage. Platform acquisitions are our passing game, a little bit higher risk, but they move the ball forward in a more meaningful way. Another trend that I would highlight as we looked across the last 10 years is that there's an incredible diversity of transaction types that we do it, J2. I think you heard this earlier today from the division presidents.
We look at public companies. We look at private companies. We buy venture backed growth companies. We invest in companies in situations of distress in need of a turnaround. We buy from private equity firms.
We buy from founders. We buy domestically, we buy in North America and we buy in the rest of the world. This speaks to the flexibility and adaptability of our approach. But the most important pattern as you look across the last 10 years is that we consistently invest in businesses at prices that end up being around or below 5 times the annual EBITDA contribution of that business within about 24 months. This slide gives just a small snapshot of some examples and some successes over the last 10 years.
I want to be very clear about what this does and does not illustrate. These multiples are not the EBITDA multiples that we pay at the time of purchase. These are not LTM EBITDA multiples. These multiples reflect purchase price divided by 2019 EBITDA contribution. These are EBITDA multiples after the realization of growth, synergy and optimization.
Many of the opportunities on this page were acquired at healthy EBITDA multiples on an LTM basis at the time of purchase. What this shows you is that over time, we have a history of realizing high yield on the prices that we pay. And this is not to suggest that every purchase price is less than 5 times annual EBITDA contribution after 24 months. You see 2 examples on the page, Prime and Viper, where the purchase price is not yet below 5 times annual EBITDA contribution, in part because we haven't hit the 2 year mark and in part because it may take more time for these acquisitions to grow into the target multiple. But these are still exciting platform acquisitions that move the needle in a meaningful way for us.
This tells you that the playbook is working and it's working across many sectors and across many transaction types. You would be hard pressed to find another serial acquirer or another private equity firm focused on the middle market in TMT with a track record like this. So how do we do this? Like most success stories in business, it starts with the people and it's not just the people who you've heard from today, but it's the thousands of people at j2. M and A is a part of the DNA at j2 and it quickly becomes a part of the DNA at every portfolio business that we acquire.
We have an incredibly talented roster of operating executives who know how to execute a plan and run a P and L within a specific domain. And what I think a lot of people do not realize about the j2 parent organization is that we have a full team of investment professionals, similar to a private equity firm. This is a team of individuals with significant technical investment expertise, who work in partnership with the operating executives to source, evaluate and execute acquisitions. When you take our operating talent and our investment talent and you combine it with the j2 acquisition system, which we refer to here as the j2 global M and A toolkit, something very special emerges. And there are 4 components of this toolkit that I want to focus on in the time that we have left, the flywheel advantage, our sourcing network, our programmatic approach to review and execution and our disciplined approach to valuation and deal making.
But the two remaining points are important, operational enhancements and our commitment to integrity. The division presidents have given you a good sense for the infrastructure that they have in place, the sector expertise that they have in their respective portfolios. And I hope that you now have a better understanding of the type of operational excellence and strategic insights that we can tap into to unlock shareholder value in every company that we acquire. On the integrity front, I will say that this is something the senior team at j2 takes very seriously. We are cognizant of the fact that the world of M and A is small and the way that you treat a person in one situation can often have a direct impact on the way that you are treated in the next situation.
So we hold ourselves to a high standard internally and externally when it comes to respect, honesty and integrity. As a result, we built trust with the M and A community. Folks in this room, I'm sure know a lot of people in the M and A community. And you also know that we are often among the first calls when a business in one of our sectors comes up for sale. So let's take a look at some of the other components starting with the flywheel.
To be successful in M and A, you really need 3 key ingredients that feed off of one another. You need operating and domain expertise, you need transaction expertise and you need access to capital. When you have all 3, you can be dangerous. You can move quickly, decisively and effectively. We are fortunate in that we have all 3, unlike a lot of other organizations.
On the operating front, we have 16 general managers, 3 division presidents and access to dozens of other backable execs who are experienced P and L operators within a specific domain. On the transaction side, I mentioned we have a team of investment professionals. Importantly, they are focused on investing in the middle market within TMT. And these are people with backgrounds from venture capital to private equity to management consulting to bulgebracketinvestmentbankingtobrutiqueinvestmentbanking. We also have highly sophisticated in house legal support, starting with our General Counsel and an attorney devoted exclusively to M and A.
Over the last year, we have tripled the size of our investment team. We now have the bandwidth and expertise to explore larger, more complex situations where we think that we can find value. We believe that we are well positioned to thrive on the uncertainty that we are seeing in the current environment. And frankly, we welcome uncertainty. In terms of access to capital, I don't need to tell this group about our capital structure.
You guys speak with Scott all the time. You know, we steady we generate steady cash flow that quickly accumulates into a war chest that can be recycled into the M and A program. Importantly, when you look at our peers and the parties against whom we compete for M and A, we are an all cash buyer. That differentiates us. A few other items to note when you look across our peers and the folks against whom we compete for M and A, small companies may have the domain expertise, the operating expertise, but they may not know how to execute a transaction or have access to capital.
Large enterprises don't focus on the middle market, doesn't move the needle for them. Therefore, they don't have the middle market expertise and the attention to middle market M and A. Private equity checks a few boxes. They have transactional expertise. They have access to capital, although sometimes most of the time their deals are subject to does a private equity firm have full time in house devoted operating and domain expertise.
Now we're seeing this model migrate more to what j2 does through programs like KKR's Capstone, GTCR's Leader Strategy Program and other executive and residence programs at private equity, we view this as a validation of our approach. You can see that J2 Global is uniquely positioned. We have all three key ingredients to be successful in M and A, and this is why we're able to move with such differentiated speed, certainty and integrity. Now let's shift to how investment opportunities get into the system and talk about our sourcing program. While we have many different businesses and brands and cultures and people at j2, there is a unifying theme.
The executives at j2 are hungry for M and A. And this creates a culture of competition for cash and competition for resources where only the best opportunities advance through the process. You've heard from Steve and Nate and Dan, you know M and A is a part of their playbook. Each division has its own M and A program. Each business unit has its own M and A program and the J2 parent has its own M and A program.
These all feed into my team, which shepherds deals through the process with Vivek and Scott and ultimately the Board making capital allocation decisions. In total, we have 30 executives or more at j2 who spend a meaningful part of their time on sourcing M and A. My team also has active dialogues with intermediaries and institutional investors. We have regular conversations with TMT focused venture capital funds and private equity funds, particularly those with a middle market portfolio, we have a reverse coverage program in my group, where we have a list of over 200 TMT focused investment banks. Each member of my team is responsible for maintaining an active dialogue with specific banks on the list.
This is designed to make sure we get a look at every relevant opportunity. We also have an emerging executive network that can act as an additional source of deal flow. We can act as a capital partner to seasoned execs who identify acquisitions. All told, over 1,000 opportunities will make their way into the J2 M and A system in any given year. And this means we have to say no to a lot of opportunities.
So let's talk about how we evaluate, prioritize and say no. Deals are prioritized on 2 tracks at j2. There is strategic prioritization driven by the operating executives and there is financial prioritization driven by my group and the J2 parent. On the strategic side, the division presidents and business unit general managers have autonomy to prioritize their own deal flow. If they want to explore growth opportunities related to an existing business, they can do that.
If they see themes in a sector where they see value and opportunity, they can pursue those. For Dan, you heard about provider tools and services as a priority. For Steve, you heard about game publishing as a priority. For Nate, you heard about privacy solutions as a priority. My team looks at deals through a very different lens.
And this slide summarizes a lot of the way that we look at deals. We evaluate deals based on the fundamentals. If there is one North Star metric for us, it's free cash flow. When we measure and compare investments, we primarily do it by internal rate of return, which as this group knows is a function of the purchase price you pay relative to the free cash flow that an opportunity generates. Because we are effectively a permanent capital vehicle with a long term hold period, the predictability and sustainability of a revenue stream is also very important.
As a result, we prioritize recurring revenue business models. Over the last few years, you've seen us prioritize subscription businesses and businesses with subscription like characteristics. We're also big believers in bottom up, line by line painful modeling for every opportunity that reaches a certain stage. This detail oriented KPI driven approach ensures a complete understanding of the opportunity and the drivers. And it facilitates the right debates on the right topics about an opportunity, which brings me to the point about the Socratic method at j2.
Our investment process, particularly on platform acquisitions, is very rigorous and is filled with regular constructive debate. As a result, deal sponsors expect for their deals to be challenged at every stage. They expect to be tested at every turn and they thoroughly prepare knowing this. They identify the strengths and weaknesses. They prepare for the debate and we reach the right outcome as a result.
When people bring deals up for approval, they have a clear plan. On the cost savings side, I don't think it will come as a surprise in our experience. Cost synergies are more reliable than revenue synergies. As a result, we prioritize those. We found that J2 portfolio companies are often able to run much leaner and more efficiently than they do on a standalone basis.
To facilitate cost saving and our vetting of cost saving opportunities, we actually have a team, J2, a procurement team that comes in at a certain stage of every M and A deal, gets into a target company and identifies immediate third party expenses that can be cut or where we can take advantage of saving opportunities because of other relationships. Finally,
we on
the side of conservatism in our underwriting. Heroic modeling and aggressive assumptions are not rewarded at j2. On the financial front, the investment team, the corporate development team is dispassionate. We're not beholden to any division, to any business unit, to any theme or any deal. Our aim is to develop the highest confidence underwriting case on every deal so that Vivek, Scott and ultimately our Board are in the best position to make prudent capital allocation decisions.
And in our experience, conservatism and confidence are highly correlated. So we've covered the flywheel, our sourcing network, some of the ways that we evaluate deals. Now let's turn to process. As you might imagine, we have a highly structured system for M and A at j2 and it's designed with checkpoints and gates to ensure that we're spending the most time on the best opportunities and the least time on the lowest probability opportunities. Essential principle of our system is to ensure collaboration and partnership between the investment teams and the operating teams throughout the deal process.
You see there are 5 basic stages and this is how we track our deal flow through a CRM platform that we use. As every opportunity advances through stages, it inquires an increased level of internal sponsorship, it's subject to a heightened level of scrutiny and analytical rigor and it's touched by more stakeholders and subject matter experts within our organization. So let's talk about each stage starting with the watch list. These are early stage opportunities. 100 are at this stage at any given time.
I looked at our CRM this morning, there were over 700 watch list opportunities. This is usually pre NDA. It could be an early relationship. Opportunities until there's a sponsor, someone willing to advocate for it and advance it through the process. There are a few key checkpoints at this stage.
Members of my team have weekly check ins with business unit GMs to talk about their watch list and prioritize. There is also a corporate development weekly screen where my team sits down to talk about the watch list, the most actionable opportunities and determine how to spend our time. Then we get to initial review. This is where the light touch work begins. As a frame of reference, when I looked at our CRM today, there were 58 deals at this stage in the process.
This is where the partnership between the operating teams and the corporate development team really begins. At this point, you have an operating sponsor, typically a division president or a BUGM. You have a corporate development sponsor that's someone from my team and they work closely together to frame up the case. At this point, we've signed an MDA. We're reviewing confidential information.
We're making information requests. We're doing top down modeling at this stage. And there are regular checkpoints, including a weekly meeting that I have with the division presidents to review their respective pipelines. Then we move to active diligence, where the heavy lift begins. Again, frame of reference, at this point, there are 10 deals at this stage in our pipeline.
And here is where the sponsors are working toward a specific recommendation on a deal. They've spent significant time and are spending significant time doing bottom up IRR modeling, detailed due diligence requests, management meetings, research and analysis, both in house and in some cases, bringing in 3rd party experts. At this stage, the deal becomes a part of a weekly meeting held by the group presenting to you today. Nate, Steve, Dan, Scott, Vivek and me. Here, we meet to discuss the most actionable and active opportunities in the pipeline and this effectively comes a forum for Vivek and Scott to begin to make capital allocation decisions.
The negotiation and execution stages are the next two stages. This is where we see a significant uptick in resources, j2 stakeholder engagement, subject matter expert engagement. This is where we bring to bear the full resources of j2. We have legal engaged. We bring tax and accounting and finance is wrapping around the opportunity.
Human Resources begins integration planning. We have a technology team, an infosec team. We have in the case of a media deal, we may bring in our audience development experts to vet an opportunity. In the case of a software opportunity, we may bring in product marketing experts. And it's really amazing at these stages how all of the pieces work together.
It's almost like a symphony orchestra, the way that we perform at this level in a deal. And this builds up to final approval by Vivek, Scott and ultimately our Board of Directors. While I can't share details on the number of deals that we have at the bottom of the funnel, I can say there are several active situations that we hope to be able to announce in the coming months. So you can see that we have a very systematic and methodical approach to M and A. And this approach translates to results.
So let's take a look at 2019. It was a successful year. We spent $435,000,000 of cash across 12 acquisitions in 8 business units. But I want to be clear, every business unit at j2 participated in M and A in some way, shape or form in 2019. While a majority closed deals, not all closed deals, if you look at 400 opportunities reviewed, that means 400 opportunities made it to that initial review stage that we covered on the prior slide.
Importantly, 9 of the 12 acquisitions in 2019 were proprietary, meaning they were sourced outside of a formal sell side process. That speaks to the power of our sourcing program. Cloud services had the highest deal volume and dollar value in 2019, 8 deals at cloud, 4 at digital media. When you exclude the IPVanish transaction, a more balanced picture emerges and the capital was excluding IPVanish evenly allocated across the 3 divisions, something we like to see. Ultimately, we feel great about what we accomplished in 2019 on the M and A front.
We were purposefully diversified. We had good volume across all three divisions. We acquired some world class brands with SpiceWorks and Baby Center. And we entered a new sector, consumer privacy with IPVanish that has already proven to be an effective platform for tuck in M and A. The acquisition system at j2 is working and we're off to a very strong start in 2019 2020, I'm sorry.
What I hope you'll take away from this portion of today's session is that we have a thought fully designed system and evaluation framework that allows us to execute M and A in a unique and differentiated way. Thank you.
Thank you, Sean. Hopefully that was helpful to everybody. I think it's the most explicit J2 has ever been in terms of unpacking and detailing our M and A philosophy and strategy.
We're going to take just a
well, I guess they're done.
I was going to
take a little break here, set the chairs up, but the chairs and mics are ready to go.
So we're going to now move
to our fireside chat. Vivek, our CEO has been very patient at the back of the room all day. Brief intro for him. As many of you know, he spent just about 15 years at Time Inc. In a variety of management roles.
Then in 2010 went off and bought a company called Zip Davis in conjunction with a private equity firm, ran that business for the better part of 2 years in the late 2012, as I mentioned much earlier in the day, J2 Global acquired Zip Davis. He ran what we call the digital media segment up through the end of 2017 because as of January 1, 2018, he became the CEO of J2 Global Inc, the parent company. Interviewing Vivek today will be Dan Ives, Managing Director and Equity Research Analyst in Technology at Wedbush Securities. I had the pleasure of meeting Dan probably 16, 17 years ago. And he's been one of our longest covering analysts approximately 15 years.
So I'd like to invite now Vivek and Dan to come up on stage and lead Dan the fireside chat. Thank you.
Thanks for the intro, Scott.
Thank you, Scott.
So it's great to be here interviewing you. I think just sort of setting up for the broader Q and A as well with Vivek. So, I mean, I'd start off by just saying, look, this is J2's 1st Analyst Day ever. So what were you hoping to accomplish today? Like why now?
And maybe just talk about that. Yes.
So first, thank you for doing this. And everyone, thank you for being here. I know this is a large investment of time and hopefully it's proving to be valuable to you. We certainly appreciate you being here. So I think we try and do 3 things.
So first is to give you and the investment community a deeper view into the portfolio. Because when Scott and I go out and we go to conferences and we do non deal road shows and we do our 1 on ones, you don't get into the level of depth that we just got into where you have a real understanding of the brands, of the companies, of the markets, where we see growth and where we see opportunity. So the portfolio review and making sure that there's a full appreciation for what's inside of j2, I think was important. The second thing is the team. You know, intentionally Scott and I said, you know, this isn't going to be about us because you've heard from us, but you had not heard from our divisional presidents and Sean.
And I will tell you with our divisional presidents, it is my estimation and for those who know them well, they each could be CEOs of meaningful companies. And so I feel privileged and we should all feel great that we have that caliber of leadership inside of the company. And underneath them are really incredible operators. These general managers are fantastic. I often refer to them as backable CEOs.
So the management and leadership depth is pretty special. And so showcasing that and just because I always say that doesn't make it true having everyone see them talk about their businesses and how they think about them, I thought was important. And then Sean, he's kind of a secret weapon at J2. I don't really allow him to go out much because he is so impressive and he is such a key part of what we do and has really taken the acquisition program to a next level. And that's probably the 3rd goal of this event.
We are more than just a company that buys companies. The thing that we're trying to convey here is that there truly is a system, a program, a method to how we identify and create value. You know, I almost don't even like the term M and A. You know, I think about value creation and we have an extraordinary track record. It isn't something that's just been lately.
It's been for some long period of time. And it is infused in our culture. It's what we do. It is defining. And I think we're probably in a marketplace where we may see some of the best opportunities we've seen in some time.
So that was the reason. And we hope, as Scott mentioned, we hope to do this on a regular basis. I think it's important, a number of you, when I moved into the role said you got to do an Analyst Day. And I'm glad that all of you who told me we should do an Analyst Day are actually here, which I appreciate. And so we'll look to do more of these.
So when you think about the portfolio, I mean, we obviously we saw a real deep dive into all the different businesses. And of course, you love all your children. But what's the one or maybe the parts of the portfolio that excite you the most relative to growth or maybe even some of the M and A prospects and maybe you could differentiate and talk about it?
I have 4 kids, so I could never just pick 1, 4 children in my real life. And we have these 3 operating divisions. And so maybe I'll pick 1 from each one. So when Nate talks about the protection thesis, I think he's spot on. And I think whether we're protecting documents, whether we're protecting privacy, whether we're protecting endpoints, whether we're protecting data, He's on to, I think, what is at the core of what consumers and businesses are thinking about and concerned about in a digital world.
And I think the brands and the suite that he has architected is very exciting. We're only beginning to scratch the surface on how to bundle, how to cross sell and how to upsell between those. We now actually have a suite of products where we can do that. So I'm very excited for that. And I think in 8, we've got the person to do that.
On the Ziff Davis side, I'm torn because there's some really strong ones. I'm very excited for the gaming business. I always have enjoyed the space. It's one that is clearly growing as an entertainment option in popularity and in value. But I think what we're doing with the Humble Publishing business in particular is a big idea.
And that's kind of one of those free option type things. When we look at a lot of these opportunities, we didn't buy Humble Bundle for that piece. We bought it for what we saw as a very exciting and growing subscription business, which it still is. But the publishing business, I think, is very compelling. And what Steve described on Temtem, if you do a little bit of the math, that becomes very compelling if we can scale that and repeat that.
And then Dan's business, what is really special about that is he's organized around every stakeholder in healthcare. There are a lot of healthcare companies and it's a healthcare company by the way. There are a lot of healthcare companies that focus on patient or provider or payer or pharma. He's built a circle around all of that. And that's very compelling.
And he's absolutely right. I mean, when you think about where healthcare is going, particularly in the United States, high deductible plans, what does that mean? Patients are more aware of the out of pocket expenses and all of a sudden price transparency matters. As companies like ours are self insured, I take the risk of medical care at J2, we do. I'm now paying very close attention to why that MRI cost this and that MRI cost that.
1 block away from each other, the same procedure. These things are going to become common and choice and becoming discerning as a customer in healthcare is going to matter and it has an impact on every part of the ecosystem, which is why I think where Dan is very exciting. So I know you asked me to pick one, but I picked 1 by division.
Great. So $1,000,000,000 of dry powder. And even if we go back years ago, I mean, obviously, J2 is just really facts. Of course, Ziff Davis really changed everything and you look at Everyday Health and some other bigger acquisitions. But just how are you thinking about that?
Are you thinking about it like when we have the let's call it the 2 or 3 pillars as you define it to add a whole another pillar or it has to be the right acquisition, the right strategy or you just continue to fill in what we have today like just maybe from a high level, how you think about that just from an M and A perspective?
Yes. I mean, look, I think that the answer is yes to probably all of that. I think we want to fund our current divisions and business units around where they see value and help them achieve that through their acquisition programs. I think at the J2 parent level, we are thinking about a 4th leg to the stool. As Sean pointed out, we 8 years ago, we did Ziff Davis and that added a leg and then 4 years ago, everyday health.
So I think we're due for adding a pillar to the company. So I think that would be a good use of our capital and we've got ideas about that. And then as you also know, we have been opportunistic buyers of our own shares, of our own stock. And when the market isn't valuing the company in the way that we think is right and where we think that the returns from share buybacks equal or are better than the returns we can get from buying companies and buying businesses, we're going to do that. And we have been doing that and it's a way to return capital to shareholders.
So those are the principal ways in which we're thinking about how to use that dry powder. And I will say, we've been relatively quiet over the last two quarters. I get a lot of questions as to why that is. I think now, I think it's exciting to more people because it's like, wow, you are sitting on a fair amount of dry powder. And what I think is going to be, is going to be an interesting set of value opportunities for us and for others.
I think this is going to be, I I think we're seeing it. It's going to be a buyer's market.
It's a buyer's market, but obviously maybe you could just talk and Scott talks about it often on the road like just a disciplined from a financial perspective in terms of the acquisitions you look at, why you look at them and then maybe just look, obviously, a great job talking about M and A and why you've been successful. But maybe now, I mean, you were obviously working in digital media business. Now you've seen cloud and the whole companies, but being the CEO. Maybe just talk about things from an M and A perspective that you try to avoid, like what's been one of the parts of the success?
Well, look, so why do we own software and media today? Let me answer that question because I think it answers kind of where we would go and where we wouldn't go. So I don't think of software and media as being all that different. I look at it as both businesses are digitally delivered goods and services. So we like digitally delivered goods and services.
Both businesses, I often say this rely on typists. We have people who type content. We have people who type code. The beauty of typists is they're all over the world. We have 3,100 employees in 57 locations around the world.
We can leverage the global talent pool, not just a city center talent pool. We're right now going through the greatest work from home experiment in human history. That's been a part of who we've been for a while. So in our way, I think a lot of companies may actually recognize that there are other ways in which to work, but you can only do that I think in a digitally delivered type proposition. We like businesses with high recurring revenue streams.
Scott alluded to this in his opening remarks. Our advertising business has a recurrence of revenue higher than our subscription business. There is a stability to that business because we're in vertical categories, end of funnel, we're a must buy. We're not just a like to buy. And that speaks to why we have recurrence revenue.
We love businesses with great cash flow characteristics. Sean talked about the permanent capital that is the J2 cash flow focus. We generate cash to buy businesses that we optimize to generate cash. And that continues to go. So those are the things, if you fit in those worlds, research, analytics, data businesses, those would be obvious places for us to extend.
Plenty of runway in software and in digital media. We're certainly not at the end of history in either of those. So there's a lot for us to do, but we're not that's fairly that's clear. That's a concise definition of where we're going to go. Outside of that, we don't need to go.
There's plenty in what I just described.
And really, now that you've put the heads of all the different business units and basically CEOs of their own companies within the broader framework, more competition for capital. So in theory, the bar for M and A continues to go up based on the scrutiny and the amount of deals that are coming through.
There's that aspect of it and then there's also the aspect of while our divisional presidents and general managers are in charge of their businesses and their P and Ls, they generate cash fairly or unfairly, we take it all upstairs. And so you don't have your own balance sheet. You don't get to use your own cash. You're in competition. And that is one of the advantages of the portfolio.
We have parts of the portfolio that have better cash characteristics that are funding the growth ambitions of other parts of the portfolio that without access to that, would have to find that. And that is one of the benefits to the portfolio, because I get asked that question a lot, which is why these things together. And so being able to do that is important. So yes, I think it's that plus the it's a healthy competition. And we're getting to the point where the more successful we are, the greater our bandwidth also becomes, right, our ability to do more.
So what
as you've gone around meeting with investors over the last few years, in your perception, obviously, you talk about a lot among your managing team and the Board. You think it's just the most misunderstood piece about G2, which obviously you try to hit here. Maybe just talk about that from your perception, especially going from before you ran digital media. Obviously, you know that. So but now as you as CEO, you have a different vantage point.
Well, look, I think that many members of the investment community still define the company as it was in its 1st decade. And so it's the fax company. I can't tell you how many rooms I go into and it's, oh, you're the fax company. Now to be clear, we love that part of our business. But as you can tell, the WebFacts and they're really talking about the WebFacts part of the business is less than 14% of our revenues.
And then when you say that, there is this moment of incredible surprise. Like, no, I didn't know that happened. When did that happen? And how did that happen? But I do think we still deal with the perceptions that exist around the company from them.
So I think there is a there's still some ambiguity or confusion as to what is the company. And so this is why we're doing an Analyst Day. And this is why we've been more focused. Scott's always been tremendous in the marketplace meeting with shareholders and with analysts and bondholders. But I've been involved and we're getting some of our some of the people you met here more involved because we think it's important to address that.
That's on us. That's on no one else but us and it's our job to get out there. Doing some media, trying to do some of the things you saw in the sizzle reel, just to get the story out. I think those things are important. And for those of you who are fans of the company and have been longtime supporters, you've asked for it too, which is, hey, give us some cover.
We're there and help us help you. And so being more active, I think, is something we've been focused on. And the other misperception, it's not a misperception, it is a disagreement. And that is we're a total growth story. We think of growth.
You've heard me many of you have heard me talk about total growth, whether I'm spending money at the income statement level, whether I'm spending money whether I'm spending OpEx, CapEx or doing M and A, I'm putting money to work to generate cash flow. That's what we do. We are not religious about one over another. The market likes organic or has liked organic more, places a higher value. Some of the analysts here will say, well, given the organic growth, we're going to put this discount in.
I certainly don't accept that because I don't think it's true. I think in the history of the markets, I would say that stories like ours that truly do what we do well are far more sustainable, predictable and long term better growers than organic stories that start to run out of organic growth and start to do diseconomic things to maintain top line revenue. We're seeing it. The market is characterized by growth at any cost. And so we certainly never employed that.
Growth at any cost has really been the negative outcome of the misplaced value of organic revenue growth. It's not organic earnings growth. It's organic revenue growth that the market's been focused on. So that's a little bit of my tirade against what I think is the conventional wisdoms of the market. But we're not alone.
Constellation, Danaher, there's some great names. They may not be on everyone's list, but we've done our own work, which is, well, who else is like us? Who else has a capital allocation focus? Who has a total growth story? We've been pleased to see that we're not alone.
I wouldn't mind seeing some of the valuations of some of the names on that group, but that's maybe another Analyst Day.
Day. We all know Scott loves the organic versus acquisitive growth question.
Yes, I'd like to add Quiz. So could
you maybe I mean, like we know that you and the Board have a different philosophy than some other companies when it comes to equity based compensation for leadership. Maybe explain it, the rationale and how it all fits into the broader strategy?
Yes. So for those of you who aren't aware, we are active users of performance based restricted stock units that vest not based on time, but they vest based on achieving certain per share price threshold at j2. So my own package is 80% essentially variable, which is a combination of these performance units plus stock options. And I need to get to $185 a share for my equity divest. And we arrived at that figure based on the historic compounded annual growth rate of the company, of the share price, and applied it prospectively for the next 8 years.
And I think that's healthy. I think it's healthy that I should be compensated for creating value, not for staying alive and not for remaining in the job. I think many people, it's just about being in the role and good things start to happen. For the divisional presidents and for the general managers and for all other folks for whom we grant equity, 50% of their equity are performance shares. So a high ratio of how we're compensated is really based on the per share price of J2.
And that is what we think about. I think about the per share price of j2 and anything and everything we can do to enhance that. That's what I'm paid essentially to do. And so having the organization myself included organized around that very specific and simple to understand equation, I think has been very clarifying and helpful. And I would encourage more companies to do it.
Now we're seeing trends towards more performance units. And by the way, the reward should be outsized if you achieve those. If we're at $185 and we've got a $12,000,000,000 $13,000,000,000 enterprise value, that's great. We've just created another $6,000,000,000 of enterprise value. I came from a PE world.
You got compensated a percentage of the value you created, not a function of the size of the business. It was what was the value you created, you got a piece of that. So that is what we're trying to mimic in our program.
That's great. Insightful answer. So look, a number of investors and obviously I've talked to many of them and you and many of my colleagues as well, when they say, okay, J2 is basically a publicly traded private equity firm. I mean, do you take units accurate, take offense, like just maybe talk to that because it goes back to like you don't fit in 1 group from a valuation perspective. So maybe just talk about that perception, is it right or wrong?
So look, if when someone says you're a publicly traded private equity firm, they mean you're disciplined and you have rigor, you're focused on IRR and returns, then I certainly embrace that aspect of it. But there are some key differences between us and a private equity firm. I think first is private equity firms own. We own and we operate. We create value.
We have platforms. We have technology. We have people. We're not just buying businesses and they sit in the portfolio each on its own and the portfolio I've been in the private equity firm, each of the portfolio CEOs couldn't pick any of the other ones out of the lineup or knew no one, none of the GPs. So we're not that certainly.
And I think that's a very key difference. 2, private equity is organized to get one price once to get the exit. That's what they do. They own to ultimately sell. That's one standard and approach.
Nothing wrong with that. We need to create sustainable value. These cannot be things that we have one trick and one trick only and then it's over. It has to continue. So you have to have a sustained approach to value creation.
We're going to own these businesses for a long time. I think the other thing is our source of capital, we refer to it as a source of permanent capital. It's the cash flow from our operations. It's our balance sheet. It's not a fundraising with LPs.
It's just a different way to think about capital and your source of capital. And then possibly, I think our purview, it's interesting. Sometimes they are well, your purview seems broad, but in comparison to our private equity firm, our purview is very narrow. When you think about digitally delivered goods and services or software and media, that's not the ocean And we're not trying to be in all of these other categories. So I think there's more focus to what we do.
But don't get me wrong, I was private equity owned. I enjoyed that experience. I think there's some really great examples of great experiences around private equity. I just don't think it's a perfect parallel for who we are.
So we talked about adding, but maybe talk about subtracting. Like when you talk about spin offs, divestment selling pieces of the business, sunset and how do you think about that? Because obviously it's continuing to evolve. You have hundreds of acquisitions that you've done over the last call it 15, 20 or just think about that like maybe talk about that how you think about different pieces of the business that maybe don't fit and what are the strategies and kind of the in the process as you think about some of the
Well, I think you in your question have separated situations. So I think let's take the situation of should you sell for value creation purposes to unlock value. Because if you go back to what I said, I only care about the per share price of j2. So I am open to every idea around enhancing in a meaningful way, in a sustainable way, the per share price of J2. Often the challenge of doing that from a sales point, selling an asset, as we have low tax basis in a lot of our companies.
And so there's going to be a tax fight. And so if the after tax proceeds don't yield something that is a meaningful impact on the price that becomes hard. Spinning or carve out IPO is certainly another option. I don't think any of the pieces you saw yet are at this scale yet, but being the upper board at the scale where they would thrive long term as their own publicly traded company. I think some are not far, but I'm careful about having a series of small caps.
J2 is borderline, we're SMID. I keep being told, we're not even solidly mid cap yet. So I'd like to get solidly mid cap, which opens a different universe of shareholders and interests. So that is something we think about it. Just I think we've got to get some of these pieces to a little bit more scale and that could be in combination with something we don't own and that gets us there.
So I think we're open to separations that unlock per share price value for J2. Now for things that are not core, not strategic for which we don't think we can create a lot more value that may be a distraction, we have no hesitation to sell off or otherwise separate from those assets. And clearly we have done it with the Cambridge Biomarketing Business, the Tea Leaves business, the Web 24 business, the hosting business. So we've done that and we do think about that. Because any portfolio needs to have the rigor of portfolio management and there may be things that have changed in the intervening years from when the deal happened to now.
So we're always looking at that. I don't think it's a material thing. I mean, when you look through all the things that we went through, there's not an obvious one that I can draw a circle around and say that needs to go. Okay.
And just last question for the audience. When you think about M and A, I mean, obviously, from a pipeline perspective, you talked about it's probably the best pipeline you've seen in terms of a lot of the deals. Is it different the type of deals you're seeing now versus maybe even a year or 2 ago in terms of quality, growth, different areas? Like how would you compare and contrast? Well, I think
we're seeing more because we have more people looking. It was that Sean had that slide with all those little headshots of all those people. Those people create deal flow, right? Their activity brings a lot of activity. So we're seeing more and therefore in more places.
Reputationally, I think we get the benefit of being viewed as they are a very versatile transactor. They've taken a public company in. They've done a carve out. They've done a venture backed situation. They've done PE backed.
They've done owner operator, they've done all kinds of hair and issues and problems and they don't seem to scream and run the other way. This is a very important thing for me and for the entire team, for Scott and the divisional presidents and Sean, which is we don't re trade. We are very careful about the terms we put forward and you should be able to rely on that term, those terms from the beginning to the end. Clearly, if something significant is uncovered, it probably changes our overall appetite and perspective on the deal. But we're very good at not stringing people along, throwing LOIs to get a look at a book.
We don't do that. Because if what's core to us is the J2 acquisition system, which it is, reputation matters. And our reputation amongst banks, our reputation amongst entrepreneurs is very good. The fact Steve mentioned, Doug Suttles, one of our general managers who is a founder of Ookla, he made a ton of money. We paid a nice price for that.
And he doesn't need to work here anymore. He wants to work here. He wants to be part of this. Per Schneider, the founder of IGN wants to be part of this. We have multiple of these founders who want to still stay part of this and we're excited for that.
And so, yes, look, I think that this market is a good one for us. We're seeing a lot that's interesting, but we will also be very disciplined and we are exceedingly patient. I say $185 but that's I've got 6 years on my 8 year clock. The program is an 8 year program, if you're not aware. And so we're not going to do anything to unnaturally, except in the
same way
that I might talk about growth, revenue growth at any cost. We don't do M and A at any cost. We never have. We never will. And you're saying it the last two quarters, we're exercising a great deal of discipline because we think there may be more better.
Great. Well, thanks just for the insight.
Thank you for doing this. I think what we're going to do now is we're going to open it up to the audience for questions. I think we're going
to Yes.
We're going
to invite the rest of the management team. So Nate, Steve, Dan and Sean to join Vivek on stage with myself. Dan, thank you for hosting the fireside chat.
I think they've got to bring up chairs.
So while they're doing that, what I would just note is if you are interested in asking a question, raise your hand. There should be 1 person on each side of the room to hand you a microphone. When you get the microphone, please articulate into the microphone for the benefit of the webcast your question. I'll actually repeat it and then hand it off to the appropriate person to answer it. Okay.
First question. Okay.
First of all, thanks, Vivek. Thanks, Scott for hosting the Analyst Day. It's very helpful. I have a few questions. Nate, I'll throw the first one out to you.
Where do you see the ability to have the most impact in cloud this year and then over the next few years? I know you talked a lot about privacy and security, but just when you look at the overall cloud business, how do you think about that?
Okay. So the opportunities now and in the not too distant future?
Sure. So I mean, I think I'll reiterate what I shared earlier. Number 1, in our privacy business, that business is growing strong double digits and I see a big opportunity to accelerate that and we have a lot of things in motion that will accomplish that. And then number 2 is our corporate facts business. As I said, we have a lot of plans there around product and better serving the customers in that market.
And that's also going to deliver double digit growth. And when I say that, that's before any M and A. So those are both large. So that's good. And then in our security business, I see a big opportunity as well.
So my personal instinct is to go deep. And in those three areas are 3 areas I saw that we had some traction, some scale and we had some momentum. So for me, I'd like to hit a home run-in those areas. And I think that's how we can have the most impact. That said, there are many other things going on.
But it's cliche, put first things first. And those are three areas where I think we can definitely have the most impact in the next 12 months.
Great. I have a couple more. Next one for Sean. Deploying over $400,000,000 in a year, obviously, great year. You highlighted very sophisticated, repeatable process that's scalable, clearly scalable.
But I guess we always want to see more on the outside. And so the question is, what are the bottlenecks to deploying more capital in a given year? And how much more room is there to improve there?
Sean, how do you put more capital? $1,000,000,000 More is never enough, more,
more, more. Look, I think we can look at larger opportunities and we're actively doing that because of the dry powder that we have available. I don't think that we want to over index on large a So by definition, we could increase volume. I do feel like we have the capacity to do that with the team. I think the business unit GM structure, the division president structure, the addition of Nate in the last 6 to 9 months allows us to increase our spend, but we're going to do it in a disciplined way.
We're not going to spend more because spending more is attractive. We're going to spend more because we see valuable opportunities, value creating opportunities that bear with the spend.
Great. And then last one for Vivek. Know Dan asked about choosing your favorite kids, if you will. I'll ask a slightly different question. When you look at the business, what are the big internal, not M and A, but the big internal organic growth opportunities that you're most excited about?
It's probably very similar to the answer I gave. I didn't mention the corporate facts piece. So I maybe elaborate a little bit on that. I think you caught the math, but Nate's got a $130,000,000 business that a portion of which, a majority, but a portion is the healthcare market. He's got 9% market share.
That's probably generous. It may be a little less than that, 7 percent to 6% to 7%, which I interpret as meaning, wow, there's a great deal of upside for us in that business. But healthcare moves slowly. It does not move quickly. But that's one and I'm excited for consensus, which is launching next week at HIMSS as a platform to accelerate our path within healthcare.
Honestly, if we just renamed it, this is probably one of the more attractive HCIT plays in the marketplace. It's just not packaged that way and we're not going to do that, right? But I look at what it's trying to do and other HCIT plays and Dan would speak to this. And this is further along, has scale, profitability and a path and a product to do something really interesting, which is to really solve the digital movement of health records. It's not digital.
It's analog today. If anyone in the healthcare system tries to get records, you will see that. You have all these EHRs and EMRs that are not connected to each other. So on the one hand, we went digital. That's great.
We just created all these little colonies of data that can't move around. So if you're in the Epic system and then you go to a Cerner provider, good luck. It's try to get it from one point to the other. If we can solve that in any meaningful way, that's pretty big. So but there are a lot of great opportunities inside of the company and you heard them all.
It's hard to rank one over the other, but that really just speaks to the excitement around all of them.
Great. Next question.
Hi, good afternoon. John Tanwanteng from CJS Securities. And thank you all again for doing this. First one, just a clarification from Vivek. The vesting of the shares or the restricted units, is that all or nothing after the 6 years from now?
Or is there cheers to that?
I'm sorry, I said the pro form a of your shares,
he wants to know if it's a clip all
or nothing at 185 or kind of a better term? No, no,
there are tranches. There are 8 tranches along the way that correspond to the compounded annual growth rate of J2 shares from IPO to when I took over January 1, 2018. So you take that percentage around It
was 12%. 12%. The $75 stock price.
And so then a 12% CAGR, so 8 tranches. And in each tranche is 20 of 30 days has to be above that price. And the second one And by the way, the units that the rest of the team have, have the same mechanics.
Great. Thanks for that color. 2nd, just to stay up to date with current events. I was wondering if you could update us whether you have the real time data or not. Just on how the coronavirus is impacting your business units, either benefits from people that staying at home buying more stuff online, not going to stores, using more bandwidth from working from home or even driving more traffic to your health websites and fax volumes at health care providers.
Just give us an update how those are tracking and maybe on the other side how small business confidence is looking and whether the slowdown in the economy might impact that? Yes. Look, I mean it's early And so it's hard to
say anything with any definition. Just what are the issues that we're hearing about? Supply chain issues that doesn't affect us. Our supply chain isn't really relevant to the affected areas. And again, we're digital, so there really isn't a hardware chain.
The affected areas aren't large customer markets for us. They're not really meaningful customer markets at all. So we're not concerned about that aspect. Our ability to work and to produce every day, as I said, we've been always a distributed type of organization, virtual in many places. So we're not concerned about those dynamics.
I'm always cautious to make statements about bad things being good, because that's a hard position to have. I just don't think this bad thing is bad for us. Now, of course, if the if this tips the there's an economic implication of this that is well beyond the virus, that's a different proposition. And if this means an economic downturn, if this means an environment where consumer confidence is shaken, business spending comes down, there'll always be an impact. Historically though, J2 has done fairly well in market downturns.
That is the benefit of being highly recurring revenue subscription in nature, a lot of our services are services you're going to continue to have. But I think right now it's super early. We're not feeling the negative consequences per se, but I wouldn't go so far as to say it benefits us in this way or another.
Any of our 3 operational presidents want to comment?
Well, I mean, I'm a little bit embarrassed to say that it hits our business in many good ways in the healthcare business. People come to us for a source of information, which drives traffic. It builds the credibility of our brands in people's eyes. It takes the health care system and pharmaceutical companies that are usually talked about in bad light, which are our customers. All of a sudden people looking at them to find a vaccine and to cure people's problems.
So now the good side of the pharma world and health world and things that we should be all proud of the state of the healthcare. Fundamentally, the innovations in healthcare and pharmaceuticals in our world puts a spotlight in a positive way on healthcare. So I'd have to say it's good for the everyday health business for unfortunate reasons.
I would just add, I think in the broadband space, we're going to see stress on broadband and capacity, cellular capacity, probably like we've never seen before. We are to see it in the data. We speed test. We measure the world. So we see where that's happening.
Positive or negative on our business today, not really that relevant unless there's a broader economic impact and IT spending goes down and all that stuff. I think where we can be of value rather than saying it's a good thing for us, I would say it is where I think we're going to be of value today is we have tremendous editorial products that will provide a lot of great information out there that's accurate and fact based that will contribute to positive decisions and not panic. The other piece I would say is long term, we're the helpers of this broadband economy and it's going to need to find new ways to stretch and we're there to help them and help them on behalf of both the equipment manufacturers, the network providers, small businesses, the consumers. One of our sites data detector recently, I mean, they've been in a lot of different articles because there's been a lot of outages of sites. And data detector is the de facto.
It is something, something down. You'll find down detector there. So we're already seeing it. We're seeing it in our speed test data. And at some point, we'll be able to use that information to provide value in the future.
And that's probably where it'll come.
Great. Thanks. Rishi, do you have a question?
All right. Thanks, Rishi Jaluria, D. A. Davidson. Really appreciate this and all the granularity.
Two questions, one for Dan, one for Nate. Dan, in your part, you talked a little bit about wanting to get more onto the healthcare IT side and you put some logos of companies up in there like Veeva. But at the same time, you sold off the tea leaves business to WellTalk and at least from an outsider's perspective, it feels like that's something that would fit nicely in there. So maybe help us understand that and what that move more into the Healthcare IT side would look like. And then I've got a follow-up for Nate.
Sure. So the T lease sale was before my time. But even having said that, it may or may not have passed our screen. It's in a very competitive sector. And so conceptually, it fit within my mapping, but that doesn't necessarily mean it would have fit the profit and growth profile.
We subsequently it was sold to in a larger home, where it probably has a better chance of realizing what its value is and probably would not have had that same opportunity to realize value in our world. So I go into services in HCIT space soberly. There are areas that are I'm not going to compete against Microsoft and Google for big data. I'm not going to compete with Veeva in data management systems. But there are we have identified several areas and I tried to map it out in the patient journey, which are information intensive, which are digital infrastructure intensive, which are about using digital technology to connect as opposed to just fundamentally providing the technology.
So that's part of the job within my division is to pick those shots and to pick the connections where we can actually thrive.
That's helpful. And then just one other thing on Weltoq and Tea Leaves, which I think is important to answer it just right, may not have made sense in our ownership, but we're a large shareholder in WellTalk. So we're going to participate in whatever value gets created out of that.
Got it. Thanks. And then Nate, when you talk about the cloud backup business, it feels like there's a little bit of a rebranding, right, moving it away from being just pure cloud backup or pure file sync more into the security and privacy side of the business. Is there a work that's being done on the
Sure. Well
Sure. Well, I wouldn't look at it as a rebranding and it's certainly not a rebranding to our backup customers or to people who are buying that, right? So when we're selling, if you go to the websites of off-site data sync or the properties we have, it's being marketed as secure data backup and disaster protection, which is how it's been marketed and branded previously. The story there to me again is really about the product and the team there is very passionate and the leadership of our backup business is that we now have a much better service offering. Our service offering is technology agnostic, but with expertise in what are the leading technologies today.
And in having that, it opens up opportunities to retain our customers better and we have some very valuable customers. And also just to grow organically or through M and A as Vivek said either way, no discrimination here. But it opens up opportunities in that vein that we didn't have before. Now I put it in security because basically we're protecting companies data and we're helping protect them from disruption in their business. And in small and medium sized businesses, I don't know that they have a separate backup buyer from this buyer, from that buyer, right?
So there's an opportunity there to leverage the customer base we have or the feet on the street to bring these things to market. It doesn't have to be together, it doesn't have to be rebranded, but to just be concerted and get a higher share of the customer's wallet. So we're not rebranding backup as something else. It's still secure backup and disaster recovery.
And I would just add to that. For those of you, this predates NAIC. As you know, we made a GM change there a little less than 2 years ago. And so the first phase was to understand really where that business had opportunities. As you may recall, last year in 2019 was actually a meaningful year of investment.
As we started to look at where was there an opportunity in this space, because we got a lot of questions. What are you doing with the backup business? It's been in decline for 2 years. You're managing it for its EBITDA and its free cash flow. But in fact, it actually consumed capital both on the hard CapEx side as well as what was a key element of this buying ODS as we refer to it internally.
So that was what really is the culmination of almost a 2 year process of looking at that business unit, those assets and the opportunity now coming up with a solution that as Nate mentioned earlier, we think turns organically positive maybe late this year, but probably next year. Next question.
Saket, you have a question?
We get you a mic, you can.
Saket Kalia from Barclays. Thanks a lot for hosting the day. Maybe just to stay with you Nate just on the VPN business. Can you just talk a little bit about why that market is attractive now, right? Like sort of where is the inflection point?
And then maybe relatedly, we talked about sort of the SMB focus, right? There's so many valuable SMBs and SOHOs right in your business. VPN feels a little bit more consumer y. So can you talk about that pivot a little bit and sort of what that means for the business? Sure.
So I'll handle the first part, but Vivek can certainly chime in here because he sponsored the acquisition of those brands and that predates me. But it's about the consumer and it's about privacy. And I think privacy is a huge issue. You can see a ton of activity in this space and a ton of investment in the space, but I think privacy is very important. Now VPN doesn't necessarily address every aspect of privacy, but certainly there's any number of aspects of it that have been in the news with social media and different things and it's very topical and it's a big societal issue.
So the use of VPNs by individuals, it's growing. So because there's a need and it's there's a growing need. So I think that's I mean, I think I hope I'm answering your question in terms of I mean, I think it starts with the customer and what's going on with their lives. And in terms of what made the investment attractive?
I think that's right. And I think there's the 2 other use cases. So there's the private browsing. You're not going to see what I'm doing. That's the consumer use case.
Connecting to unsecured Wi Fi is a business use case. All of you are on unsecured Wi Fi right now. The logins we gave you are unsecure. If you're not using a VPN, everything you did over that connection could be observed. So that's a business use case, which is, hey, when you're on unsecured Wi Fi, which is often the case, you need to be secure and it's in the company's interest for that to happen.
Then there's the encrypt. Me, which is the remote access VPN market. So that's like Cisco and Econnect. Many of you are probably familiar, if you're at a bigger company, you have to VPN in, which is to get remote access to drives. That market is also available to us in a cloud solution through encrypt.
Me, which is one of the brands inside of IPVanish. So you're right, it is largely a consumer value proposition today. But if we can get Encrypt. Me as a remote access alternative to very expensive hardware on prem based solutions, that would be interesting. And then if we can get a mindset shift harder, where people go, you're right, when I'm at the airport or when I'm at the hotel or I'm at a guest network in an office building like the one we're in now, I'm putting my company at risk.
So I think those would be examples of the business applications.
Yes. So and I would just add, it's getting the individual to think that way, but also getting the company to think that way. So what when I referred to earlier encrypt. Me has a Teams product, which I don't want to give customer names, but we have some large customers where the company buys it on behalf of their employees. And so they'll buy it and they'll provision 300 accounts to their employees.
They'll offer it as optional because to Vivek's point, they want their employees to be safe when they're not at work and they want to protect them. And I think that's a I don't know that it's there yet, but that's something I'm sure you've heard a lot that's been talked about a lot in cybersecurity, right, especially with executives about protecting them 20 fourseven and at the home and there's all sorts of elaborate things. But this would be more of a way to do it for all employees and do it around a key area. And then again, as Vivek said, we don't have the product out in market. So I didn't want to talk too much about it, but we certainly have the network and the infrastructure and the team has the thinking and the plan to do hosted VPNs or private endpoints for businesses on our network and to start competing in that space.
But that's not reflected in any of our guidance or expectations that we share. I just want
to add something. So the other thing and Sean talked a lot about and you have competition for capital, which is very good, but we're equally collaborative as well. And so that's very, very important to understand that. And VPN is a great example of it, right? So we meet often as a team and individuals.
And Nate mentioned, thanks for the ad, for speed test VPN. We're really becoming the sum of our parts, right? So when you're trying to go out and build a brand in VPN, which we have maybe the best brand already in VPN and IPVanish. Speedtest is an incredible brand, 100,000,000 active users a month doing all of these tests. I mean it's the installed base to be able to put a VPN on is tremendous for the same reasons that he talked about.
In gaming, VPN for especially for PC gaming is an important thing, more about speed than about security and that's a very real thing. We talked about how many hundreds of thousands of paying VPN subscribers I have and what's going to be the value to them either for free or for paid. And this is where we get to collaborate a lot and especially dealing with medical records and how that's going to work with VPN. So I think you're going to start to see some multiplier effects. So when Sean says platform, I think there's some double platforms here that we're starting to
finally see. Thanks. We're coming up upon the 6 o'clock hours. We have time for one question and ideally one rather short question or at least a short answer. Great, thanks.
It's Cory Carpenter from JPMorgan. Thanks for today. I had 2, I'll cut it down to 1. So maybe different topic, but 80% of the business U. S.
Today, broadly speaking, how do you think about the international opportunity? How big of a priority is that, whether that's organically or through M and A?
Vivek, I think you should take that.
The international question. So look, I think that that is it's an opportunity for us. It's probably more an opportunity for us in Nate and Steve's businesses. Dan's a little bit more challenging because as you may know, pharma marketing really is only allowed in the United States and New Zealand. But the pregnancy opportunity in baby center brings an international footprint.
We're excited for that. I certainly think Nate's business is probably the of the ratio that is on non U. S. Revenue as to be this piece. It's