RE: DBC....How does MKTW directly benefit DBC's bottom line???? Let me tell you how..Please Read...
First,though, let me tell you a little story about a company called Breedtech Technologies. I believe it was back in '91 or '92 when the economy was "recovering", depressed auto stocks had recovered. GM, Ford, and Chrysler were all back up from their lows and the lemmings were chasing them. I said to myself what do all these auto manufacturing companies have in common. The answer was parts. I said what parts are relatively new in 1992 and of upmost importance in the minds of safety conscious drivers. The answer was "airbags". Then I said to myself, where do companies get their airbags? The answer for two of the three major car makers (and several smaller ones as well)Ford and GM, was BreedTech. Breedtech was trading at about 17. Despite favorable agreements and a huge cash position and favorable balance sheet the 17 dollar price produced a P/e of less than 15 (or something like that, I don't remember the particular numbers). I noted the price was slipping so I put my buy at limit order in at 15.25. The stock went down to 15 and then quite quickly up to 54. Only one problem for me though was that their was a secondary offering and I said to myself yuck more dilution. I canceled my order before my buy price was hit.
Now what you may ask is the point of this story? What I like about DBC is not only MKTW, but that it is a provider of up to the minute financial information to all of its partners sites in addition to its own. DBC, as per the client list I previously posted, provides info to a long and lengthy list of online and coming online web sites.
What Breedtech is / was to GM and Ford, DBC is to Ameritrade, Dreyfus, Hoover, D&J and others. DBC is a "common denominator". Though no one really took notice because who the heck is Data Broadcasting company? Some cable and radio broadcast company? Right ? Wrong! During a two year transitory period, DBC bit the bullet and re-structured itself into an "Internet" company. This restructuring obviously hurt the bottom line...still no one took notice of what DBC had become. A "leader" in providing onlineand up to the minute time sensitive financial and sports information for many online web sites of major online and coming online financial resources.
No one took notice that is until they teamed up with CBS and formed MarketWatch. Then all heck broke loose. The stock which had languished
went up to 15. Retraced its steps to 7.785 then now has soared to as high as 45. Still people based this movement solely on the anticipation of the MKTW IPO. People still haven't recognized the inherent value of DBC.
But aside from providing revenue to DBC from MKTW via interest on loans made by DBC to MKTW, DBC has further elevated its stature creating for itself even more business opportunities due to its association with one of the most familiar branded logos of all time ...the CBS "eye". CBS can direct traffic to the MKTW site like no other online news provider via free television advertising...et cetera...
Everyone has now heard of the 38% owner of MarketWatch with CBS, ....DBC.
Maybe...just maybe...people will now look at what DBC does and its inherent quality and leadership status ..but one thing is for certain....
MarketWatch is and was partly a marketing device for DBC to gain customers and that is how and why DBC will generate revenues from MKTW users.
Why else would DBC loan MarketWatch $5,000,000 and become a customer for its news content?
Here is the statement regarding the relationship from the last 10-K
"...DBC also markets its products over the Internet on its own
Website, Marketwatch's Website and other popular Web sites...."
So far, this marketing strategy seems to have worked in accordance with the first rule of marketing....
You can't sell your product if you don't have an audience.
Now the 38% owner DBC of CBS MarketWatch has an audience! Plus DBC now has first dibs on the type of up to the moment analytic content that its competitors like Bloomberg don't have and can't match and which Reuters and the Business Wire don't provide !!!
This access also enhances DBC's value by dissociating DBC from it's competitors and makes it easier to sell SeLl SELL DBC's products and services. This Dissociation fulfills the second rule in marketing..."positioning".
Namely how do you convince someone to buy your product instead of your customers? How is it different and why is that difference better?
DBC, in essence, has CBS Reporters on its staff!!!!!
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Just another little tidbit I clipped from recent filings in the Edgar Database (the first and best source of info on a company that every one should read before calling the company IR. When talking to IR, ask critical questions and realize IR's job is to spin SpIn SPIN). BOOK MARK this link, if you haven't already done so....
sec.gov
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Marketwatch derives its revenues from four sources: advertising, transaction fees, the sale of news to DBC and subscriptions.
Advertising
Marketwatch sells advertising space on its Web site by guaranteeing a minimum number of "impressions", or times that an advertisement is viewed.
Transaction Fees
Marketwatch has several agreements to provide links to third-party Web sites. Marketwatch generates either fixed transaction fees for monthly access or variable fees dependent upon the number of transactions consummated at the third-party Web site by linked customers.
MarketWatch RT Subscription
MarketWatch RT is a financial data service offering snapshot real-time stock market quotes, fundamental and historical data, a specialized business news service, portfolio features, links to online brokerage services and other investment related services.
MarketWatch Live Subscription
MarketWatch Live uses active push technology to deliver streaming real-time data. It includes all of the data, news and research tools of MarketWatch RT and more sophisticated features such as charting, portfolio management and advanced investment information.
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Back to sleep.....
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