By Chew Xiang

THIS is one Internet start-up that skipped the bust and went straight to boom.

Set up in June 2002, just after the dotcom fever had wasted away, Interactive Hub - which helps website owners such as Microsoft and Friendster sell online advertising space to advertisers here - promptly ran into the Sars slowdown.

Kyle Lim, one of the three founders and also chief executive officer, admits it was a tough time for everyone in the fledgling firm.

'Six years ago when we started out they told us we were insane,' Mr Lim says. 'What helped was that 'our outfit was very lean. A lot of dotcoms, they splurge on things like rental premises and when you don't progress in the industry that's where you start getting into cashflow problems'.

So along with fellow founders - chief operating officer George Foo and vice-president of sales Kenniess Wong - he took big pay cuts.

'We knew we had to grow the business first then pay ourselves decent salaries', Mr Lim says.

Although Internet usage went up because people stayed at home, Mr Foo says, 'unfortunately our advertisers didn't want to see us either!'

In the event, Sars turned out to be a relatively minor blip.

Within a year, the company was in the black. It hasn't looked back since.

Today, the company is raking in over $10 million a year in sales, and has 60 staff in six countries across Asia.

Profit margins are a comfortable 10 per cent, comparable to larger companies in the region.

What's behind their rapid growth?

One hundred per cent compounded annual growth rate is some achievement, given that the dotcom fever appeared to have gone off the boil.

Mr Wong says it's down to passion.

'The three of us have passion, the Internet is in our blood.'

Mr Foo adds that from experience in their previous jobs - the trio have had stints at Time Warner and Lycos Asia, among other places - 'the marketplace indicated clients were clamouring for an outfit that could suit their needs.

There was a void in the marketplace, and speaking to clients, the feedback was that they were starting to move online and nobody could clearly and adequately represent them'.

Those clients were big portals like Microsoft's MSN and ESPN's popular soccernet.com.

They needed someone on the ground around the world to get advertisers to sign on, someone with knowledge of local conditions.

Interactive Hub managed to snag exclusive rights to 'distribute' online advertising space to companies from Singapore seeking to advertise on the websites.

Now, the company has obtained exclusive rights for Hong Kong and Malaysia for ESPN Soccernet while MSN has given them the rights to Indonesia.

Friendster too came on board in 2004, and the company now has a stable client base of online brands.

What's next for the company?

Mr Foo says: 'The challenge in the next five years is not about having enough websites (to sell ad space for), it's more about who can monetise it for optimum value.'

The constraint, as in many fast-growing industries, is the lack of suitably experienced manpower.

The company's main expense is in pay cheques; its chief selling point is its expertise in online advertising. That sort of expertise is very hard to come by, says Mr Lim.

Another hindrance is that the market for online ads here is still very small. Only 2 per cent of advertising spending in Singapore goes on websites, Mr Lim notes.

Often, companies simply don't understand the mechanics of the new advertising medium. 'One of the key factors is to close the marketing loop,' Mr Lim says.

Mr Foo cites with some frustration the example of a fast food company that was promoting its online order system for food delivery.

'It's an online system, but zero dollars were spent online!' he says.

A lot more 'evangelical work' is in order, says Mr Lim. The opportunities though remain largely untapped. 'The next five years will be very interesting,' Mr Foo says.

That might see the company becoming a fixture in the Fastest Growing 50 list for years to come.

This article was first published in The Business Times on 23 July 2008.