If you were assembling a list of companies with first class, comprehensive investor relations web sites, you probably wouldn’t consider Great Lakes Reit and Newmont Mining as contenders. With market caps of $250 mn and $3 bn respectively, and businesses that are not exactly high-tech – at least directly – they are unlikely candidates for cutting edge web technology. And yet their web sites offer real-time SEC documents, press releases, digitized conference calls, stock charting and fundamentals, e-mail alerts, calendar events, and a host of other impressive data elements.
Some of the information is obviously provided by third party vendors, such as BigCharts and FreeEdgar, which charge big bucks for their data – bigger, it would seem, than most companies would consider spending. More mysterious is the fact that viewers aren’t forced to leave the corporate web site to view this data on BigCharts’ or FreeEdgar’s sites. Instead, the information is incorporated into the site with little branding.
But what you see isn’t exactly what you get. Call it virtual reality, but these IR sites aren’t really part of the corporate web sites. That may sound cryptic, but look at it this way: when you click on the investor relations button on the company home page, you’re actually taken to an IR page housed on a server belonging to a company specializing in creating and maintaining IR web sites. The URL at the top of the screen may still say Newmont Mining, but in reality, or virtual reality, you’re now on a server belonging to PR Newswire. In the case of Great Lakes Reit, it’s a CCBN server.
Currently, around seven firms are vying for such IR web site business in the US, an impressive number given the business itself is only a few years old. Each of the seven brings something different to the table, but the underlying service is essentially the same. Companies contract the firms to build or recreate IR web sites that remain true to their corporate identities and fit seamlessly into the overall corporate web sites, while at the same time bringing in key data elements to offer shareholders and investors.
The firms offer a laundry list of attractive components, ranging from dynamic stock quotes to digitized conference calls (see Standard IR site offerings, page 64). The basic package costs around $6,000, with a one-time $1,500 set-up fee, though some of the firms package their products with varying degrees of service and price. Once a package has been purchased, sites can be up and running in a mere two or three days.
Established players
The business of outsourcing IR web sites looks to have started with Direct Report Corporation, which hosted Campbell Soup’s first corporate web site in early 1995. Since that time, the firm has refined its service offering, and as of December, now hosts 200 investor relations web sites, as well as a number of corporate web sites, including Neiman Marcus, RJR Nabisco and Fortune Brands, along with Niri’s site (www.niri.org).
What makes Direct Report’s Web Center service unique, according to president Ronald Gruner, is its ability to customize its data elements. ‘We’ve taken our technology to the lowest level, where we manage the basic raw information, such as stock quotes and Edgar documents, and then we tailor them to have the same look and feel as the client company’s site,’ he says.
Direct Report also provides much of the data and services itself, rather than contracting out to third party vendors, such as FreeEdgar. ‘And unlike everyone else, we provide everything it takes to manage e-mail and fax broadcasts, mail fulfilment, telephone conferencing, conference calls – the whole set of services,’ says Gruner, who adds that the firm’s Dialog management system allows companies to control a portion of the information. ‘They can manage about a third of the site themselves, and that will grow in the future.’
The current industry leader – in terms of its client base – is CCBN, which launched its IR web product in August 1997 and now maintains roughly 925 live client sites. ‘One of our distinguishing features is we take an active service approach to our clients, knowing they want to have someone else worrying about the problems. And we have 30 client service professionals who work with the clients,’ says Robert Adler, co-founder of CCBN.
CCBN offers three levels of service, but most of its clients pay roughly $10,000 a year – roughly a 50 percent premium over its competitors. ‘We’re more expensive because of the service approach we take, and the data we provide. For example, we’re the only company that can publish First Call earnings consensus numbers,’ says Adler.
The firm also monitors its ‘up-time’ performance – how often the web sites are actually operating. According to Adler, the average up-time for the best firms is about 98-99 percent, while CCBN runs at about a 99.6 percent rate. ‘We’ve made a significant investment in our hosting facilities to ensure our clients’ web sites are up and running all the time.’
Leveraging services
Although PR Newswire and Stockmaster.com have only recently entered the business of web page hosting, both have been selling many of the data and service components to companies for several years. PR Newswire, for example, which introduced its Virtual IQ product last spring, has offered news archive, quotes and fundamental data, as well as audio and video for about three years. The firm currently has 76 live client web sites.
‘One of the things we try to do is bring traffic back to these IR web sites. We have a relationship with Reuters, and they’ve created a network of partner sites – investment related sites like ChaseMellon.com and Suretrade.com – from which viewers can link back to the corporate IR web sites of our clients,’ says Michelle Savage, director of investor relations services for PR Newswire.
Through its news service, PR Newswire also provides the URLs of its corporate web clients on all releases, which reach 750 online services. The firm’s own web site receives some 7 mn page views a month, adding to the possible traffic from click throughs. ‘Because we manage our clients’ news, we can get the stories up on their web pages faster and make sure that only those stories that the company issued are posted,’ adds Savage.
Stockmaster.com, which has been providing stock quotes to corporate sites since 1996, is the only service provider that also maintains a public web site for online financial information. ‘Because we maintain the public site, we maintain our own stock quotes and charts, and we get our own press release feed, as well as real-time feeds from SEC filings, so we can format them in a more attractive manner,’ says Bob Colt, vice president of sales at StockMaster.com.
StockMaster.com’s investor relations web program is sold on an à la carte basis, a sales structure meant to allow IPOs or small caps the choice of forgoing some features, such as historical data, which are more appropriate for their larger, Fortune 500 counterparts. Colt also points out that clients benefit from StockMaster.com’s public site, which has more than 800,000 users logging on each month, any of whom can click through to a company’s IR web site while conducting their research.
The upstarts
Two firms new to the IR web hosting business are Primezone and Business Wire. Both offer all-inclusive packages for the $6,000 price tag. Primezone entered the business in August of 1998 with its IR Web Partner Program, while Business Wire began selling its CorporateIR.com service at the beginning of 1999 and has seen its client base double on a monthly basis.
‘What makes us special is that we’re not giving different levels or doing à la carte. The service is all inclusive and sold as one product,’ says Michael Becker, financial information specialist at Business Wire.
Included in the services of both firms are multimedia presentations and live or archived conference calls, e-mail news delivery, and an interactive calendar. As with PR Newswire, Primezone and Business Wire own their own wire services, and client sites are promoted through links on related news releases. ‘We also have click-through agreements with StreetFusion, so when we do a web cast, they post it on Yahoo Finance,’ says Tom Madden, CEO of Primezone.
Most recent to the group is Marlborough, Massachusetts-based Merrill IR Edge, a business unit of Merrill Corp, an electronic and paper document management company. Launched at the national Niri conference in June 1999, Merrill IR Edge is available as separate packages of bundled features. The firm’s high-end package is sold through a joint marketing agreement with San Francisco-based StreetFusion, a provider of webcasting and online event schedules.
As with Direct Report, IR Edge allows clients a high degree of editing abilities, using what Merrill calls its site authoring wizard. ‘It allows the investor relations officer to make changes to their web site using the site authoring tool, rather than calling the customer service number to have them make the changes. So if someone wants to work at midnight on changing content or a press release, they can do it on their own,’ says Andrew Lewkowicz, president of Merrill IR Edge.
Aggressive planning
Each of these seven firms is banking on the increasingly dominant role the corporate web site will play in the near term. They point to the growing adoption of web conference calls by companies seeking to avoid selective disclosure issues (see cover story, page 24), as well as the growing importance investors are placing on comprehensive, up-to-date sites.
‘I think there’s gong to be a much broader adoption of web conference calls. I also think the web site is where all the action is going to be, from document posting to other transactions,’ says Lewkowicz.
Primezone’s Madden adds that as corporate web sites become more prominent, investors won’t be satisfied with combing through data. ‘You’re going to see push technology used more and more to reach investors. Companies will reach out to their audiences, rather than having them always come to the web site.’
Madden and others point out that the web is constantly changing, and therefore companies benefit not only from the current technology and maintenance provided by a third party host, but also from the advantage of having someone else worrying about keeping up with current trends. For example, as part of its effort to update its Virtual IQ service, PR Newswire conducted a September survey in conjunction with the National Association of Investors Corporation. ‘We talked to over 600 individual investors and found that 74 percent of respondents visit a corporate web site before making an investment decision,’ says Savage.
The study also found that more than 85 percent of individual investors want to receive financial data. And some 78 percent of respondents would like to receive news releases by e-mail through ‘push’ e-mail systems on web sites. Savage says that the findings of the survey will be used to further refine the service.
So just what exactly are individual public companies competing with when they set out to maintain their own sites? ‘If CCBN doesn’t release a new version of its software every three months, I figure we’re falling behind,’ says CCBN’s Adler, who, like his competitors, makes his living pushing the envelope.
