Special Report: Ties that Bind

These three nearly identical databases (Ancestry.com’s has more books) are just one example of what Dick Eastman, author of Eastman’s Online Genealogy Newsletter <eogn.com> since 1998, calls “coopetition” between genealogy’s largest for-profit players. The relationship has allowed Provo, Utah-based MyFamily.com (parent of Ancestry.com and Genealogy.com) and Ann Arbor, Mich.-based ProQuest (owner of HeritageQuest Online) to split the market: MyFamily.com has the corner on home users. ProQuest dominates the library audience. Everybody wins, right? Well, maybe except for you. Here’s a look at the industry’s twisted ties and what they mean for your research.

Starting small

Genealogical competition wasn’t lacking during the 1990s Internet boom. In 1997, Paul Allen and Dan Taggart bought Ancestry, a small Salt Lake City publisher. They posted digitized records for subscribers and envisioned an online network for families. “We wanted to let every family in the world create their own Web site,” Allen says. In 1998, the duo launched a network of free family sites and named it MyFamily.com. A million users signed on in 140 days, and $90 million poured in from investors including Intel, AOL, Kodak and Compaq.

Another nascent company called Genealogy.com was also attracting capital — as much as $37.5 million — from big-name investors such as A&E Television Networks. Mattel had spun off Fremont, Calif.-based Genealogy.com in 1999, along with its Family Tree Maker software and Family Archive CDs. Visits to Genealogy.com totaled 441,000 that September, to Ancestry.com’s 880,000.

Also in the fray was Heritage Quest, a book and magazine publishing company Leland Meitzler began in 1985 and sold to the American Genealogical Lending Library in 1992. Vivendi Communications acquired the company seven years later and added it to its SierraHome division. Later that year, Sierra teamed up with ProQuest, a publisher of educational microfilm and CDs, to digitize US census images for an online subscription collection called GenealogyDatabase.com. The popular nonprofit site Roots Web <rootsweb.com> was to host it.

Consolidating resources

But MyFamily.com bought Roots Web in 2000, gaining a huge audience — more than 75,000 had submitted to its surname list. “We had the images done, but they canceled the contract,” Meitzler says. GenealogyDatabase.com died before it launched and Vivendi sold Heritage Quest — along with those unused images — to ProQuest.

In September 2000, Ancestry.com posted its first 1790 US census images and promised all the enumerations by spring. Genealogy.com, which already offered the 1850 census as part of its Genealogy Library collection, introduced a 1900 census subscription in June 2001. In 2002, it licensed census images and digitized books from ProQuest, which also began selling the records to libraries as HeritageQuest Online.

With competition heating up, Allen says, “Our strategy was to give away the three things [Genealogy.com] made their money on: the SSDI, family tree software and data CDs with user-generated content.” The results: the free Ancestry World Tree pedigree database in 1999 and Ancestry Family Tree software in late 2001. By February 2002, MyFamily.com claimed 550,000 paid subscriptions. When the company started charging for premium family Web sites in 2002, Allen left.

Playing monopoly

MyFamily.com shocked the genealogy world by acquiring Genealogy.com in April 2003. With the top two subscription sites and best-selling software, MyFamily.com has gained a reputation as a monopoly. Other companies have trouble getting noticed, Eastman says. “MyFamily dominates the marketplace. That drives out small, creative Web sites.”

The company added millions of records, but innovation — such as new ways of searching — slowed. “Researchers are stuck with one version of a search engine,” Allen says. “Say you want to do location-based searching, but that’s not available. You have a choice in that you can opt not to use it, but you can’t choose the one you like.”

Even seeming competitors don’t really compete. ProQuest and MyFamily.com regularly license each other’s databases. In 2004, another deal let ProQuest sell MyFamily.com’s Ancestry Library Edition to institutions alongside its own HeritageQuest. When genealogical society members used society Web sites to access HeritageQuest Online en masse from home, ProQuest discontinued the service. Another result of competition? Eastman says ProQuest — at the time, getting bad press for financial problems — had been sabotaging itself. “Home users could go around libraries, so ProQuest’s society customers were competing with its bread-and-butter customers.”

Economics 101 taught you that lack of competition leads to higher prices. Ancestry.com previously offered five data subscriptions, plus the all-inclusive $199.95 Value Collection. Last year, MyFamily.com settled a class action lawsuit over billing practices — month-by-month subscribers alleged MyFamily.com didn’t disclose actual prices, which could be double the same annual subscription paid for at once. Now, the individual packages are combined into the US Deluxe Collection — a simplification resulting from customer feedback, explains MyFamily.com senior marketing director Drew Izzo.

Is MyFamily.com too cozy on top? “Sure it’s become a monopoly, but at the same time, they do good,” Meitzler says. “I’m on Ancestry all the time. I think the price is fair, considering what you get.”