Q: Who else is doing what Fund.com does online in the financial industry?
A: 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.
Q: Why did Fund.com pay almost $10 million for a domain name?
A: 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.
Q:Does Fund.com’s strategy have precedent and is it proven?
A: 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. Also, 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 advertising time, like Super Bowl commercials. There are also other companies, like Demand Media, that specialize in purchasing domain names. Demand Media was founded by Richard Rosenblatt former Chairmain of MySpace and has attracted $300 million of investment capital to buy domain names.
Q: Fund.com also targets the high growth ETF and structured products markets by publishing branded indexes offered for licensing. Who competes with Fund.com in Index publishing and licensing?
A: 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. 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.
Source: http://www.fund.com/fund.html
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