Profile: How NetContent Inc. Profits by Reselling Aggregated Content
for Email and Web Use

Remember the days in the boom when new companies like iSyndicate,
Screaming Media, MoreOver, YellowBrix, and IntelliSearch were going
to be the next Net zillionnaires by selling aggregated, syndicated
content into intranets and public sites?

There was a heck of a lot of buzz, then many switched names and/or
business models, and a few went out of business entirely.

"There wasn't really a market there three years ago. There was a lot
of noise and confusion, a lot of people competing, but not much
clarity on who the buyers were and what they wanted," explains Shaun
Carrigan, CEO NetContent Inc.

Carrigan should know, since buying Intellisearch in 1999 to serve as
NetContent's tech backbone, he's been through the entire
rollercoaster boom and ****, and come out the other end with a solid
three-pronged business model that corporate America seems to love.
But, don't go to his Web site to learn more just yet. "Things are
really moving in this business right now," says Carrigan. In fact
they're moving so quickly that the corporate site's outdated.
Here's how NetContent Inc's business model works:

Gathering and indexing content from offline and online sources
The key to reselling success to the mid-market is to keep your
content collection costs low, yet offer a breadth and depth of
content that's not readily available from free services such as
Google News.

Working deals with individual publishers to be allowed to collect
and resell content is a massive pain -- not to mention expensive.
So, like several other resellers, including Patrick Spain's Highbeam
Research, NetContent licenses feeds from aggregators who've already
done the hard work of collecting them.

NetContent purchases three main feeds:

o ProQuest: Aggregates roughly 6,000 feeds from print and online
sources, including newspapers, trade magazines, subscription
newsletters, and scholarly journals. ProQuest's primary market is
academic libraries, but they also sell their as much of their feed
as they are allowed to to business resellers.

(Fearing competition, some publishers don't let ProQuest resell
their content outside the library marketplace.)

o NewsNow: This UK-based company spiders the Web for content,
including more than 16,000 news sites and significant Blogs, and
then sells headline-plus-hotlink feeds on to businesses and
resellers.

o Thomson Gale: Springing from the old print directory world,
Gale aggregates and creates databases mainly for the library world.
NetContent buys the rights to resell Gale's continously-updated
company profile database.

Then NetContent's technology mingles, flags by keyword, and sells
the content back out to business customers. "We fill the gap between
free online search and costly professional research like Lexis Nexis
or Factiva. There's a big mid-market space. My question is, can you
build a mass market there?" says Carrigan.

Selling to corporate Web sites and intranets

First NetContent took the path Screaming Media, iSyndicate, and so
many others were trying -- selling content feeds to company Web
sites, intranets and extranets.

It was a very rough road at first both due to high competition and
low marketplace demand. But, Carrigan says the market has stabilized
recently.

"Most companies of any size are now on a third or fourth generation
Web site or intranet, and somebody is concerned with the information
that goes in them -- and that's hopefully not the IT department."
The best prospect actually turned out to be someone in marketing who
either already bought content but wanted a better deal (lower price)
or who'd considered it in the past but never moved off the mark. In
other words, a marketplace you don't have to educate about the
concept of content buying. You just have to explain why you're the
best.

Carrigan discovered being "best" isn't necessarily about having
gazillions more sources than the next guy. Content sales to the
mid-market is all about cost and convenience.

If you can promise the prospect they won't have to involve their IT
department too much, it's a huge selling point. And if you can
provide decent service at a price tag that doesn't require a
committee meeting or an EVP's approval, it's a help too.

Enabling email newsletters: the killer app

While routinely chatting with customers, Carrigan learned some were
using the feeds to create email newsletters for business partners,
sales reps, customers and prospects.

In fact, corporate marketing departments were shifting focus from
putting content on a site and passively hoping someone would find
it, to pushing content out via email. The only thing holding many
back was not having enough support from an IT department to handle
deployment, and being tech phobic enough that it seemed like a pain
to shop for an email broadcast provider on their own.

It was an "ah ha!" moment.

While Carrigan vehemently didn't want to change focus to being an
all-serving email services firm, he knew if he could offer an easy
do-it-yourself interface featuring integrated NetContent feeds,
customers would flock.

He tested an easy-to-ok price point of $995 per month for up to
100,000 emails per month. Most business-to-business marketers have
targeted niche lists and only mail once or twice a month, so very
few would exceed that limit.

Once they tested the overall concept of email newsletters, many
marketers wanted to start vertical letters for each market they
served. So, for example, a labor relations law firm sends a dozen
different versions of its newsletter, including one for the AFLCIO,
one for the Teamsters, etc....

So, NetContent was set up to enable one marketer to use one
interface to manage all their newsletters, with low add-on fees of
$25 per month per list and $50 per edition per month.
The newsletter service proved so popular that Carrigan is now
experimenting with promoting it via Google AdWords. (Link to sample
ad below.)

Scoop: individual subscription service sold via search ads
Carrigan's team just finished beta-testing their latest offering to
be named Scoop -- an online subscription service for individuals,
with the following three levels:

o $29 month - access to past 30-days of searchable databased
articles and hotlinked Web headlines, plus personalized emailed
alerts on any keyword or search term you desire.

o $35 flat fee - instant company profile, for any one of more
than 100,000 public and private companies, including Gale data as
well as hotlinks to databased articles on that company. The profile
is created on the fly based on the latest info in the databases, so
if you pull another copy a few days later, it would be automatically
updated.

o $49 month - premium version of the subscription service which
includes access to the searchable database, personalized email
alerts, plus unlimited company profiles.

They conducted the beta test by running a wide variety of paid ads
on Google for a month, and discovered a few very interesting things:

- People are not interested in buying a subscription to a content
database, but they are interested in their particular niche
industry. If you run ads by niche, and alter your landing page to
match each niche (fairly easy with a dynamic content management
system), the click and conversion rate is wonderful.

- Job seekers are a huge portion of business searches right now. So,
if you can position your service as being a job-seeking resource,
it's very compelling.

"We ran a series of ads with copy like 'Power Industry Jobs Alert:
track growth companies; free pass; live customer support" says
Carrigan.

Why use so much of the tiny copy space to talk about support?

"Because nobody else provides it," explains Carrigan. "People are
completely blown away when they realize there's a live person to
talk to."

The ad landing pages were fairly standard for subscription sites --
offering a free trial 'guest pass' in exchange for contact info and
a credit card number.

Results? "We had to mess around testing ads for a week before we
found out how to get to it, but then we started getting click
throughs on ads of 1.5-4%, the conversions were as high as 16%, and
cost per lead as low as $8! I was blown away."

When he realized the trial campaign was a solid success, Carrigan
switched it off and asked his tech team to begin the build out
required for a strong back-end for individual subscription sales and
servicing. His service department phoned all the new customers,
explained the service would launch formally shortly, and offered
them a chance to be a beta tester.

"My sense is, this could be an area of tremendous growth," says
Carrigan.

"The key to this is we're selling holes, not drills. I see everyone
else emphasizing how many sources they have, how powerful their
products are. It's features. At the end of the day it doesn't matter
is somebody is looking for a job or sending a newsletter. You have
to figure out their specific needs and deliver marketing that
highlights the availability of a solution to answer their pain."

Useful links related to this article:

Samples of a NetContent Google ad and client newsletter
http://www.marketingsherpa.com/nc/ad.html

NetContent Inc
http://www.netcontentinc.com

Proquest Information and Learning Company
http://www.proquest.com/

NewsNow Publishing LTD
http://www.newsnow.co.uk

Thomson Gale
http://www.galegroup.com/