Bankrate, a company with a 25-year heritage, has effectively transformed itself from a traditional newsletter publisher to a strong online media property. Today, Bankrate is among the leading destination sites on the web for financial information, receiving more visits per day than the Wall Street Journal Online, Hoover's or the Motley Fool, despite its modest marketing spend. Its recent acquisitions have positioned it to become a greater force in lead generation, diversifying its revenue stream.
Bankrate started out as a simple print-based newsletter, providing interest rate data from financial institutions. During the early days of the dot-com boom, Bankrate moved into a number of different directions, among them launching consejero.com, a Hispanic market financial portal, and Garzarelli.com, a portal for market strategist Elaine Garzarelli, all under a new iLife brand. In 2000, it hired Elisabeth Demarse as CEO, who restored the Bankrate name, killed off unproductive assets, and began to focus on exploiting the potential of the core brand.
Bankrate revenue and profitability grew substantially in subsequent years. The company went from losing $16.9M on revenue of $15.2M in 2000, to making $12.1M on a topline of $36.6M in 2003. During that same period, investors saw Bankrate stock climb from a low of $0.30 per share to more than $18 per share. In 2004, Tom Evans took over as CEO. He previously led GeoCities and Official Payments. More recently, Bankrate has launched two new channels, college loans and subprime lending, to help reduce its dependency on the mortgage and refinancing markets. About 90% of Bankrate's revenues come from its online publishing business, with the remaining 10% licensing and print revenue.
This past November, Bankrate made two acquisitions. It acquired Interest.com for $30M, to strengthen its hold on its core mortgage market, and FastFind, a lead aggregator for the mortgage industry, for an estimated $10M. While the Interest.com acquisition will eliminate a direct competitor and provide Bankrate with more page views for its inventory, I find the FastFind acquisition the more interesting of the two. Through this acquisition, Bankrate will play a more significant role as an intermediary between buyers and sellers, which should allow it to capture more of the economic value of a mortgage transaction. This will allow Bankrate to increase its revenue per lead generated from that which it obtains from its partnerships with other lead aggregators.
During the past five years, Bankrate has transformed itself into the key online site for interest rate information, and has begun to improve its position in the personal finance value chain through lead generation activities. It has diversified its revenues, reducing its dependency on traditional refinance advertising and seems well-positioned for continued growth. As such, Bankrate is clearly one of the 50 Content Companies that Matter.
