BUSINESSWEEK ONLINE : NOVEMBER 20, 2000 ISSUE
BUSINESS WEEK E.BIZ -- NET WORTH

The Multex Method


You might call it chump change: $210,000 in profits for a company that took in $22.8 million last quarter. Yet this measly profit is more than most Net companies have seen. How did Multex.com ( MLTX), which sells research reports to investors and brokers, get to the black while others struggle? An analysis:

-- Mooches content for free: Over 750 brokerage houses and research firms give Multex their research for nothing. They are paid mostly through stock-trading commissions from end-users. By contrast, business news site TheStreet.com ( TSCM) pays writers to create info. Content costs are 57% of TheStreet.com's sales, while they're 18% of Multex's total take.

-- Big Web buddies: Because it is armed with gobs of research, the likes of Yahoo! ( YHOO) and America Online ( AOL) link to Multex. Multex pays a small fee and splits the revenues from the sale of research. Other Net companies stuck with commodity information must pay far more to attract customers. Dr. Koop.com, for example, paid $89 million to get on AOL for four years.

-- Long-term sales: Some 70% of Multex's revenues are long-term contracts for products such as MultexExpress, which runs proprietary sites for brokerage firms for about $245,000 per year. Only 19% of its revenues come from advertising, which can be more fickle. Financial news rival Marketwatch Inc. gets 68% of its revenues from online advertising.


DATA: COMPANY REPORTS


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EBIZ Contents for issue dated Nov. 20, 2000


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