Executives at Business.com Inc., the Santa Monica, Calif.-based business portal backed by ECompanies LLC, said Monday that a group of investors led by the Financial Times and Cahners has invested US$61 million in the company.
Other investors include IndustryClick, a subsidiary of Primedia and McGraw-Hill. Also investing is Mort Zuckerman, who owns U.S. News and World Report, Fast Company and the New York Daily News. Financial Times CEO Stephen Hill and Cahners CEO Marc Teren will join the board of directors.
The investment comes at a time of much hand-wringing over the fate of content companies on the Net. But Business.com founder and CEO Jake Winebaum, who is also a co-founder of eCompanies, says content can make a comeback if investors are patient.
"The conventional wisdom is that advertising on the Net has fallen out of favor," Winebaum says. "But the conventional wisdom is always wrong."
Winebaum says the fact that many dot-coms have pulled their TV advertising because of diminishing returns means that Net advertising will probably get a boost. He says dot-coms have also been shying away from the expensive portal deals that were once so commonplace.
Business.com counts on advertising for most of its revenue. The company also expects to make money by offering paid content, such as research. The company is still discussing whether it will also try to take a piece of the e-commerce transactions that its site facilitates, Winebaum says.
The key to this round of investment, according to Winebaum, was the inclusion of non-Web investors into the strategic vision of the company.
"The future is about not just pure Internet plays, but Internet companies that have ties with brick-and-mortar players," Winebaum says. "In five years, Business.com will not be thought of as an Internet company, but we will build the brand on the Internet."
With the investment by the Financial Times Group, FT.com will become the premium provider of news on financial services, management and international trade on the Business.com site. The agreement also gives FT.com customers access to Business.com's search technology.