By Joseph Walker Cotter Cunningham, chief executive of WhaleShark Media, adores Costco, the big box wholesale retail outlet. In April, he arranged for WhaleShark Media's employee of the month to go on a three-minute, Supermarket Sweep-type shopping spree at the store, where she bagged about $25,000 in electronics and home appliances. He likes Costco so much that he's tried poaching one of its discount-loving checkout clerks for his online-shopping sites. Mr. Cunningham, a tall, burly man with an Arkansas accent, runs a stable of online coupon sites, including RetailMeNot in the U.S. and Deal.com in Europe, that cater to consumers trying to save $10 on a purchase from Home Depot or free shipping from L.L. Bean. Last year, the firm's sites attracted 450 million visitors and generated $86 million in revenue. It's not Internet-search algorithms that decide what deals to display most prominently on the company's home page. WhaleShark does it the old-fashioned way, with sentient employees rifling through a collection of bargains and deciding which ones will have the most appeal to customers. The company calls them merchandisers, and they're incredibly difficult positions to fill, says Mr. Cunningham, who was formerly chief operating officer of Bankrate Inc. (RATE). The 30 or so merchandisers use consumer interest and behavioral data to inform their decisions, "but it's pretty manual," he says. "Where do you find someone with that consumer experience, that sort of shopping experience and retail awareness, but also an analytical side?" says Mr. Cunningham, 49 years old. "We really struggled to hire for that job." The secret, he says, is that the employee must have a love and a knack for uncovering cost savings at brand-name outlets. Cheap Blueberries On a recent shopping trip to Costco, he found just the right person when the checkout clerk remarked on his purchase of blueberries for $1.50 off. "I'm like, 'Yeah, that's great,'" Mr. Cunningham recalls of his response to the clerk. "Then he did the batteries, and he's like, 'Oh man, that's another great price, you're killing it today!'" Mr. Cunningham handed the clerk his business card and asked him if he wanted a job. "He hasn't called me yet, but I'm determined. I'm gonna go back and find that guy," Mr. Cunningham says. Mr. Cunningham has an affable, down-home charm, but he also has a big weight on his shoulders. He's in a business--discount shopping--that is dominated by big names like Groupon Inc. (GRPN) and LivingSocial, as well as new entrants like Google Inc. (GOOG) and PayPal. The company has taken $300 million in venture-capital financing from investors including Google Ventures, J.P. Morgan and the hometown-based Austin Ventures since its founding in 2009. Mr. Cunningham says he will pursue another round of funding if and when he finds more acquisition targets. WhaleShark is profitable and on track to boost revenue 40% to $120 million this year. While WhaleShark's competitors bet on location-based deals and geofencing--sending virtual coupons and promotions directly to consumers' smartphones when they enter a store or get close to one--WhaleShark's sites follow the company's original model: moving newspaper coupon inserts online. When compared to geofencing, it's decidedly old school: relying on customers to do the work of searching out their own coupons. Rich Technology WhaleShark is in the process of adding a richer technology layer to its offerings. The company released its iPhone app a couple of weeks ago, and has had 250,000 people download it. The company's Android app is set to be released in the next several months. About 20% of the company's site traffic comes through mobile, and could eventually be 50%, Mr. Cunningham says. The company plans to test geofencing products and eventually will begin customizing its pages for customers based on their Web-browsing habits. Last year, WhaleShark moved its senior vice president of technology, former MySpace executive John Faith, to lead its mobile division and hired Google veteran Paul Rogers as its chief technology officer. In January, it hired Matt Howitt, formerly of International Business Machines Corp. (IBM), as vice president of engineering. WhaleShark's 230 employees are expected to use data to inform their decisions. It has one data scientist on staff and wants to hire another. The company plans to add 70 to its Austin, Texas, headquarters by the end of the year. Many new hires will be in engineering. The company is especially interested in full stack engineers, mobile developers and user interface and experience designers. To attract talent, the company talks up Austin's low cost of living, lack of a personal income tax and its vibrant music and night-life scene, which draws thousands every year to the city's landmark South by Southwest and Austin City Limits festivals. Just as compelling of a story to potential new hires considering relocating to Austin, Mr. Cunningham says, is the growth of the city's tech scene. Along with homegrown giants like Dell inc. (DELL) and Freescale Semiconductor (FSL), a bevy of start-ups have sprouted up in recent years as have Silicon Valley companies like PayPal and Zynga Inc. (ZNGA) opening satellite engineering offices. Last year, the city's high-tech workforce jumped 7% last year to a total of 101,000, according to one estimate. "They know now that with Austin having a bigger core of tech companies, that if things don't work out at WhaleShark, they can get a job at another cool company. They don't have to move again," Mr. Cunningham says. The company also has set up an internship program with college students from universities around the country like Stanford, Georgia Tech, Carnegie Mellon and Vanderbilt. It has 16 interns this year. To combat the shortage of available tech talent in the area, WhaleShark plans to reinstate its $10,000 referral bonuses to any employee who sends the company a candidate it then hires. Write to Joseph Walker at joseph.walker@dowjones.com Subscribe to WSJ: http://online.wsj.com?mod=djnwires
