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The business is around breakeven. Most writers are unpaid. But the founder no longer has to borrow cash from his father.
InvestorsAlley.com is a modest phenomenon in the investment publishing business. The Mount Laurel-based Web site has survived not only the Internet boom and bust - but also its owner's transition from Cherry Hill High School East student to Atlanta frat boy.
The site, founded by Brett Klasko, combines the clear graphics and multiple data links that mark well-funded sites such as TheStreet.com with broad (Klasko calls them "cold, hard") commentaries from a network of correspondents. Most of the writers aren't paid for their work. Some, like Klasko, are freshmen at Emory University who became cheerfully obsessed with the stock market in its late-1990s heyday.
That such a site can attract readers and advertisers underlines the tough economics facing full-time independent Web sites. Five years after setting up his first financial Web page, "we're almost at breakeven," he says.
Subsidized in its early years by Klasko's father, H. Ronald Klasko, an immigration lawyer at Philadelphia's Dechert firm, InvestorsAlley claimed a budget of about $45,000 in 2000 and $75,000 last year. Klasko says he no longer has to hit up his father for cash, though the site has run up what he says is a modest debt.
The site sells ads to online financial firms such as EquityStation.com. A direct e-mail service sells additional ads to InvestorsAlley's list of 60,000 free e-mail recipients, and the 70 paid and 1,300 "trial" subscribers to its $50-per-month "Traders Tribune" service. In all, Klasko projects revenues of "several hundred thousand dollars" and perhaps a modest profit this year.
Even at that level, Klasko has to hustle to arrange human resources: student labor, part-time commission salespeople, fledgling writers grateful for free exposure, plus a handful of seasoned contributors who aren't leaving their day jobs, but who enjoy the freedom of a site.
"Brett, being very young, is fresh. He doesn't restrict his writers to being politically correct," says Suzana Rockwell, a North Miami Beach financial adviser who says she became a columnist after setting up an e-mail correspondence with Klasko in 1999.
In a recent column about the impact of Enron Corp.'s collapse on U.S. corporate accounting, Rockwell used an epithet questioning the circumstances of former chairman Kenneth Lay's paternity. "We say what other people only think," she says proudly.
The site still has an office in a corner of a Mount Laurel accounting firm's suite, decorated with awards Klasko earned in Cherry Hill schools, plus a New York Post article naming InvestorsAlley the "Site of the Week."
But Klasko says his "ground zero" is now his Emory University residence.
"At the beginning of the year, I had heard that there was a student on the floor who owned his own business and Internet investing Web page," says Anthony Caponiti, a freshman. "Since I have personal experience in HTML and excel in English," he won an appointment as InvestorsAlley's news editor, where, for the last five months, he has written a daily stock market story.
Other appointments are even more casual. "We are pledging the same fraternity," says Brian Offen. "One afternoon, we were discussing the market for almost two hours. Later that afternoon, he offered me a chance to write his 'Give Me a Break' column, which is a biased, opinionated column."
Klasko says he remembers the heady days of 1998, when he briefly had his own CEO - an Internet entrepreneur who tried unsuccessfully to raise venture capital - and an unsolicited offer of $100,000 cash plus up to $3 million in stock to sell his site to Kaire Holdings, a Los Angeles firm currently trading at less than a penny a share. "I thought the company was worth more," he says, laughing.
He says he expects other offers when the economy improves.
Klasko "reminded me of my own early years," says Gene Inger, a retired financial-show host and CNBC regular who publishes a newsletter from his Fort Lauderdale, Fla., home and allows Klasko to publish one of his columns each week. "How Brett pulls [the site] together while going to school, pledging a fraternity, and trying to have at least a semblance of a social life, too, I have no idea."
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