What are we?
We are a financial information provider.
Our target market?
We target a segment of the financial services industry, investment funds.
How do we make money?
Two ways. We generate online advertising revenue, which includes referral fees for online customer leads. We bring investors and product providers together. We are creating a vertical marketplace available at fund.com and accreditedinvestor.com to increase the opportunities to connect people and businesses. Secondly, we generate revenue by licensing our content for fees. This includes licensing our branded Index to third party product providers, like banks.
What is the branded Index and how does Fund.com make money from it?
Our branded Index is a compilation of 25 leading hedge funds. Our analytics partner compiles the Index in consultation with Equities Magazine. The Index generates fees for us when third party product providers license the use of the Index.
How are we paid?
We are paid a percentage of the assets under management that are benchmarked to our Index. Our business model is similar to the index operations of Standard and Poors, the Russell Company or Dow Jones, licensing the S&P500, the Russell 2000 or the DowJones 30, respectively. As assets benchmarked to our index grow, we are paid more fees and we earn these fees however the Index itself performs
How can we grow this fee income?
We can assist our third party licensees grow their assets under management. We can do this because we have access to investors actively seeking financial products that we can refer to them; for a referral fee. We attract investors to our easy to remember website at www.fund.com. We also compile active databases that are targeted to generating investors ready to make an investment decision. By utilizing our websites and our databases, we can deliver new investors to our licensees. When our licensees have more benchmarked assets, we earn more index licensing fees.
How did we arrive at the $10 million purchase price for an Internet domain name?
The Internet has proven itself. The Internet connects millions of buyers and sellers everyday doing billions of dollars of business and in doing so billions of online advertising dollars and lead dollars are exchanged. The search engine Google is a prime example with $16 billion in advertising revenue. The Internet is also ideally suited to our business. Our easy to find and easy to remember address creates top-of-mind awareness for potentially tens of millions of customers. $10 million is relatively inexpensive when compared to the much greater cost of creating awareness for an upstart brand name or unknown website domain.
Does this strategy have precedent and is it proven?
There are numerous other multi-million dollar domain name purchases. For example, diamond.com for $7.5 million or beer.com for $7.0 million, and others like asseenontv.com for $5.1 million and seo.com for $5.0 million. All these transactions were after 2006. In addition, business.com was sold for $7.5 million in 1999 under much criticism in the press, yet the company was resold in 2007 for $345 million. Domain names are highly valuable property, just like prime real estate or prime television advertising time, like Super Bowl commercial time where 30-seconds sells for $2.7 million; $100,000 a second. Fund.com is ideally suited to achieve its own large online audience by virtue of its intuitive name and the growing influence of search engines in creating online traffic.
Who else is doing what Fund.com does online in the financial industry?
There are several highly successful companies that bring buyers and sellers together on the Internet. For example, Lendingtree.com brings banks and homeowners together for a fee. Creditcards.com brings banks and consumers together for a fee. Bankrate.com earns referral fees from financial providers. All three are highly profitable businesses that have harnessed the Internet in the same we way do. There are many more examples (Lowermybills.com; Carsdirect.com; Freecreditreport.com) that earn money in the same way. We believe Fund.com is the only company targeting investment funds, however.
Who competes in Index publishing and licensing?
There are many index providers, including S&P and DowJones, mentioned above. Morgan Stanley recently took their index publishing affiliate, MSCI Barra, public on the New York Stock Exchange (NYSE: MXB). We believe that an Index publisher needs many things to compete effectively, including brand recognition. The trust that comes with an established brand lends credibility to an index. We leverage 57 years over brand recognition of EQUITIES Magazine for our branded index to compete.
What is the size of our target market?
Mutual funds alone are reported as $22 trillion or more worldwide. Our target market is very large. In the US alone, there are 55 million households that own funds.
