MOVING FROM FAX TO THE WEB - IS THERE AN AUDIENCE OUT THERE?

In a recent interview with the president of Wall Street by Fax Jim Tanner spoke about the customers his financial information company attracts on the Web.

"Online customers are nibblers," he said. "They go for the free charts. There’s far too much free financial information on the Web. Some companies are doing crazy things like giving substantial amounts of information away free. They think it’s a lead generating tool. It doesn’t help sell anything."

Tanner commented on Morningstar’s online offer of five free reports. "They’ll find out that an offer like that will cannibalize their $400 a month subscription product. The flat monthly payment an information provider (IP) is getting from a search engine to deliver vast amounts of information is really not worth it," the stock report entrepreneur added. "It isn’t enough to pay the analysts that write the reports and it’s turning the information that we sell into a commodity." Tanner has seen a number of contracts between IP’s and Web search engines come unwound.

As long as others are giving away free reports, however, Tanner will continue to offer them at his 30 web sites.

Tanner has cited some noticeable differences between fax and web customers. There are fewer people online and sales by fax are greater. Even though the data available online is more timely and arrives in a better format, 60 percent of his customers prefer fax delivery, 20 percent use the web channel, and the remaining 20 percent want their reports by mail. Of the 20 percent who use the web to order reports, 50 percent of those request to have reports delivered to them by fax.

MWT Analysis: The battle to find the paying customer on the Web is difficult enough as it is and to have competitors flooding the web with more free information makes it even worse. The fact that Wall Street by Fax has a fax product and has tapped into the offline "real paying customer" market is how the business actually thrives.

Businesses should be wary of a potential marketing "blackhole." The pressure to do business on the Web is all around us. But it is a business model that may suck money away from your core business. Content providers must not assume that customers in cyberspace are the same as those in the hard copy, slow snail mail world or in the fast track fax lane.

(Contact: Jim Tanner, Wall Street by Fax, 303-417-9999 ext.230)