Forbes Digital Tool Headed for the Black?

Oct 27 1998

NEW YORK - The management of Forbes Digital Tool forecasted Tuesday that it would break even by the end of 1999. In a press briefing at the AdTech conference Tuesday, Forbes Digital Media Editor David Churbuck boasted that the site already has "profitable months," and would break even on a regular basis by the end of the next fiscal year.

The site credits its purported financial health to a sponsorship model: Each of the site's editorial spaces is paid for by a group of largely tech-oriented sponsors, including Oracle , Intel and Gateway. Each sponsor pays a monthly fee of between $5000 and $45,000, said DeWayne Martin, business manager of Forbes Digital Media. These sponsorships, Martin said, account for approximately 80 percent of the site's revenues, with smaller advertisers making up the rest.

To date, Forbes has not made any revenue by syndicating its content to other sites. "Old habits die hard, and Forbes has been very strict about giving its material to others," Churbuck said, but promised "we'll be striking some deals in '99."

Churbuck said the site would have a "soft relaunch" by the end of November, and would begin offering a daily wire service on business and technology. He also said that Digital Tool would soon have the capacity to deliver stories with audio and video. Primarily, however, Digital Tool said it would continue to focus on offering searchable databases and investment information.

Patrick Keane, senior analyst with Jupiter Communications, said the profit prediction was significant. "I think any time you a venture in Internet content talking about making a profit, that opens the eyes of a lot of people," Keane said. "There haven't been too many black numbers to date."

Keane agreed that the sponsorship model offered a "contextual" advantage over simple banner ads, and that companies seeking a targeted financial audience would appreciate Forbes over a more mass medium like AOL or portals. He cautioned, however, that "the financial market is getting increasingly crowded" and noted that Forbes' plans for a wire staff "could hurt them in terms of profitability, because that's very expensive to do."

Like other online media sites, Forbes Digital Tool would like its readers to come around a little more often, and stay longer. Martin said that Digital Tool's "users are now on a weekly pattern; we'd like to get that to a daily visit pattern." He added that the average user spends just five minutes per visit on the site.

Churbuck summarized it this way: "Our typical users arrive with a definite query, satisfy it, and are gone."