At first glance, eDiets.com Inc. (Nasdaq: DIET), an $88 million online diet and healthy lifestyle company, appears superbly positioned to capitalize on the trend of trying to lose weight using innovative diet programs in the digital age.
After all, there’s no shortage of potential customers: roughly two-thirds of Americans are overweight (30% of U.S. adults, or some 60 million people, are categorized as obese). At any given time, about a third of the U.S. population—over 70 million individuals—are on diets of one form or another.
The company has aggressively pursued Internet advertising and other traffic-generating methodologies, such as Web-based publications and video programs. Among its offerings: a dozen eNewsletters, an online magazine, Glee, which has articles by health, fitness and nutrition experts, and a library of videos featuring healthy food recipes. The company has also begun a push to pursue corporate licensing opportunities with its content and technology.
One thorn in the company's side is the fact that competition from large players with substantial marketing firepower like weight management company Jenny Craig, Weight Watchers International, Inc. (NYSE: WTW), NutriSystem Inc. (Nasdaq: NTRI) and Herbalife Ltd. (NYSE: HLF) is intensifying as these companies find more innovative ways to add to increase their revenues.