Who's Your Daddy? Genealogy Becomes $1.6B Hobby

Oct. 24, 2012 -- Suddenly, "Who's your daddy?" has become a $1.6 billion question: That's the amount that European private equity firm Permira said it would pay earlier this week to acquire U.S. genealogical website Ancestry.com—a 40 percent premium over the trading price of Ancestry's stock.

Genealogy is hot. The same hobby that once was the preferred pastime of shut-ins, spinsters and confirmed bachelors has become widely popular. "It's no longer a niche," says Tim Sullivan, CEO of Ancestry. He tells ABC News the site now has more than 2 million paid subscribers. Ancestry will report a billion dollars in revenue for 2012. "There's a broad, mainstream interest in family history," Sullivan says.

Hard numbers are difficult to come by, but hobby experts believe that genealogy ranks second only to gardening as American's favorite pastime.

As for how much bigger it might grow in future, Sullivan says: "Think about the last big family Thanksgiving dinner you attended. If there were 18 people, chances are that at least one of them is interested in family history. If you apply that same metric to our existing market, we think there are 20 million potential customers for our services. Today, we're serving on 2 million. We think there's tremendous potential."

The Church of Jesus Christ of Latter-day Saints (the Mormons) could be, if they wished to, a huge financial beneficiary of genealogy's new-found popularity.

The Mormons have amassed one of the world's greatest genealogical archives, and researchers from around the world make wide use of it, either online or in person in Salt Lake City. But they do so free of charge. The church, though a service called FamilySearch, provides access at no cost.

"They give free, unfettered access," explains Jordan Jones, president of the National Genealogical Society, based in Arlington, Va. "You and I, maybe, would be more mercenary. But they see this as an opportunity of a different kind."

The benefit the Church enjoys is an expansion of its posthumous congregation, says Robert Raymond of FamilySearch. If a living Mormon can establish a family relationship to someone deceased, then the deceased can be welcomed into the faith retroactively, though this practice is somewhat controversial. Says Raymond, "The idea is to give families the choice to go on in family relationships after death."

Jordan Jones says a hundred years ago people took up genealogy to find out if they were related to nobility.

"Now that desire," he says, "has gone away. Today people just want to find out where they came from." Technology—the digitization of census data, for example, and the provision of access to it online--has root-tracing easier than ever before. Though NGS counts about 10,000 paying members, Jones, referring to genealogy's wider popularity, says, "Millions of people are doing this."

Many are motivated, he says, by more than curiosity. "Some want to know the medical history of their ancestors," he says, as a way for them to predict their own future susceptibility to illness. Others practice what he calls 'forensic genealogy,' in which professional root-tracers assist courts during probate proceedings, to determine what family relationships should govern the giving of an inheritance. The government sometimes hires these same professionals to assist in cases when the remains of a military serviceman are returned home, long after his demise. What family members need to be notified about these remains?

"People who get interested in puzzles get interested in genealogy," says Jones. "They hear some story about their family, and they decide to see what they can find out."

He cites an example from his own family: Some distant Jones, after the Civil War, was denied his pension benefits as a soldier. Later, he received them. What had happened? The ancestor, Jones discovered, originally had fought for the South and then had done time in a northern prison. He later signed a Union loyalty oath and headed west to fight Indians for the U.S. Army. "He got his pension, once the government realized he'd switched sides and had been fighting for the North."