HowStuffWorks Plans Expansion

NEW YORK HowStuffWorks.com, an online how-to repository, said it has received an investment from financier Carl Icahn worth “tens of millions of dollars.”

Atlanta-based HowStuffWorks plans to use the financing to expand its 4,000 articles of product content to 100,000 and add video features, said CEO Jeff Arnold. The company recently purchased the digital rights to books issued by Publications International, a Chicago-based reference and guides publisher. Arnold said the firm’s 350 editors would convert the information in the books into articles for HowStuffWorks.com.

“We want to be the first Web site focused on merchandising content,” he said. “There are a lot of sites focused on merchandising. We think with the growth of online advertising there’s just as big of an opportunity to merchandise information.”

The funding via Icahn, who is battling with Time Warner over its strategy with AOL and other properties, is the first financing HowStuffWorks has accepted other than angel investments, said Arnold, who was a founder of WebMD.

HowStuffWorks.com features background information on topics like cell phones, high-definition televisions and cars. It licenses content from Consumer Guide and Mobil Travel Guide. The company sells targeted ads in its sections, as well as displaying cost-per-click ads from Google. It also makes money through an affiliate relationship with eBay-owned Shopping.com.

Like The New York Times Company-owned About and open-source reference site Wikipedia, benefits from the central role search now play on the Internet. More than half of its users arrive at the site directly, according to Arnold, but Google, Yahoo and other search engines are major traffic generators. Thanks to a wide range of content and Web sites optimized for search, HowStuffWorks pops up in the top five results for searches like botox, HDTV and hybrid cars.