"To print this page go to file and left click on print"
- a leading performance-based marketing company focused on delivering high ROI to its
Summerlin Commons Blvd.
Bio of CEO,
Craig has had broad exposure to all segments of the Internet. With his holistic perspective of the online advertising marketplace he has been at the forefront of new developments in the industry, most recently changing the rules by setting up a private label service which leverages FindWhat.coms strategic assets, its search engine technology and back office operations, to allow the top tier portals to brand their own keyword advertising service without incurring the time and expense of setting up and operating it themselves.
Prior to FindWhat.com, Craig co-founded and served as vice president of FindWhat.coms predecessor, BeFirst Internet Corporation, a pioneering company in search engine optimization. He also served as chairman and chief executive officer of E-Troop.com, an Internet company primarily focused on business-to-business solutions, including multimedia Internet content, site architecture, and local content distribution services.
Craig has spoken at several industry events and
serves as a resource to the Internet/tech media. He currently serves on the board of
directors for FindWhat.com, the YMCA of Lee County, and serves on the advisory board for
the College of Business at Florida Gulf Coast University.
The turnkey solution is comprised of infrastructure
and hosting, with seamless integration to support the paid advertising service, including
customer service, relevancy screening, receivables management, and all other features and
functionality currently available with FindWhat.com, coupled with a hosted control panel
for partner reports and administration utilities. Private label partners also benefit from
the continuing product development and new features offered by FindWhat.com.
CEOCFOinterviews: Mr. Pisaris-Henderson, please give us a brief history of FindWhat.com.
We have very humble beginnings. In fact, the company started in my home here
in Fort Myers, Florida. We did not have early investors or venture capitalists. Most
publicly traded companies have done large public offerings and received the capital they
needed to go out into the marketplace to attempt to build their business. We never had any
of that and, actually, we have done five private placements in our entire history,
totaling less than 15 million dollars. Instead, the early years were funded mostly with
credit cards and later funded with the few small rounds of financing, which helped to fuel
the growth of what we have todaya company that is a leading developer and provider
of performance-based marketing service for the Internet.
We are definitely not the normal NASDAQ traded Internet company primarily because we built a viable business model first, and utilized technology effectively to support the business, as opposed to having one of those good technology ideas and trying to build a business around it later.
CEOCFOinterviews: How did you get it right?
Mr. Pisaris-Henderson: I think it is our business-like approach. To reiterate, we formulated a business plan that was built on common sense and a real need in the marketplace, not interesting technical ideas that had never been attempted before. What you saw in the late 90s and early 2000s were some very bright individuals that came up with some good technologies, but not necessarily good businesses, and, there is a big difference between the two.
Unfortunately, the capital marketplace that was doing most of the investing, which created the bubble, never did understand the technology well enough to say whether or not it was a good and viable business. All they understood was that technology was coming at a rapid pace and they should be part of it. Our approach was quite different; we did not go to the capital market. We analyzed the business philosophy of what we were going to put together and made a decision as to whether or not it made sensewas it a sought after product or service. When we got to the point where we could answer yes to all of the questions that indicated a strong business model, we started to invest personally and later did small private rounds to fund the business to the point where we could become very profitable.
CEOCFOinterviews: What is it that you are doing for your customers that other people arent?
Mr. Pisaris-Henderson: Delivering high quality traffic and a great ROI! That is the simplest way that I can put it. What you find in the marketplace is that advertisers have wanted one thingthey want people who are going to buy their product and service to find their website. Now as much as that sounds like common sense, that is really the truth that we have operated our business on, and this approach has put us in a position to be successful. Our performance-based service introduces people that want to buy a product or service directly to the people who are selling the product or service. It puts us in a position to deliver a high return on investments to advertisers because we are delivering those targeted clients that they are looking for directly to the advertisers websites.
CEOCFOinterviews: Will you give us a sense of how it works and what the whole process is in the Pay-For-Performance advertising?
Mr. Pisaris-Henderson: Performance-based and pay-for-performance can be taken quite literally; our advertisers pay us only when successfully perform for them, that is, when we drive traffic to their websites. In the past, people would buy an advertising campaign by impressions (cost per thousand or CPM) to get in front of the masses. Over the course of five or six years, advertisers started to realize that online advertising campaigns such as banner ads and buttons, which were based on a pay structure that requires advertisers to pay per thousand impressions regardless of whether they received a click, just were not converting very well.
Our method of online advertising is quite different,
in that we only charge an advertiser if that advertiser receives a click from
an Internet user. Since the Internet it is a very trackable medium, we can actually see
when someone clicks and we only charge our advertisers at that time. So the
click represents a revenue event rather than just showing an ad. A corollary
to this in the offline worldit is very much like a yellow page phone book, but
instead of the advertiser paying to be listed, they only pay when someone picks up the
phone book and dials their number.
CEOCFOinterviews: What percentage of the revenue goes to the partners?
Mr. Pisaris-Henderson: In terms of how much we share with our distribution partners, across the board it averages 50% that goes to the distribution partner, and 50% stays with FindWhat.com.
CEOCFOinterviews: Can smaller businesses afford to compete with larger corporations under your model?
It definitely is open to smaller businesses! Yes, we do business with Dell Computer
Corporation (NASD: DELL), IBM (International Business Machine Corp IBM) and Intel
Corporation (INTC), but the real foundation of our business is built on the smaller
companies. For instance, take Joes Computer Shop and other similar small
mom and pop operations. Joes Computer Shop is bidding directly against
Intel or Dell. You may wonder how Joes Computer Shop can compete against one of the
largest corporations in the world. It goes back to our modelif Dell only has to bid
twenty cents to be number one to get a targeted consumer to their website, that means
Joes Computer Shop only has to bid twenty-one cents to out-bid Dell.
CEOCFOinterviews: Are there other people using your same business model now, and what is to prevent a competitor from coming in and doing the same thing?
There are three primary companies in our space: Overture Services, Inc. (NASDAQ:
OVER), Google Technology Inc. (private), and FindWhat.com (NASDAQ: FWHT). What you have is
a break-up of the marketplace in terms of services offered and distribution partnerships.
In terms of advertisers, the advertiser only pays when something works; for them to use
just one service doesnt necessarily make sense. Of our 20,000 some advertisers, we
are confident that a very high percentage use Overture and Google as well; actually, many
of them tell us they do because all three services are working for them. In terms of the
distribution side, we have different strategies from these two companies on how we reach
the marketplace. Before I get into the strategies and the different levels in the
marketplace, it is important to understand that the Internet marketplace, in terms of
distribution partners, is very large with thousands of websites that generate potential
leads for advertisers every single day. To date, we have signed approximately 230
distribution partners, which means there is a very large upside to the amount of new
partners we can bring on in the years to come, so we are very excited about our growth
Then, we took a step back and analyzed what
performance-based advertising services meant for these top tier websites. We quickly came
to the conclusion that the top portals could do this themselves. With this conclusion, in
Q3 2002 we launched a private label product, where we are actually helping the top-tier
portals get into our business. Some people want to know if doing this cannibalizes our
business model; the answer is no! We do not currently do business with these companies and
the new relationship is purely accretive, not cannibalistic. Our first partners were
Lycos.com (Terra Lycos TRLY) and HotBot, launched at the beginning of November
CEOCFOinterviews: What are the barriers to entry for someone that comes along and wants to do what you do?
There are two primary barriers to entry. First are the technological barriers. It
took us several years to develop the back-end processes to be able to do what we do
efficiently. You have to have leading edge filtering systems and processes because we have
an auction-based system that is very competitive. As our advertisers are competing
head-to-head, with everything based on a click-through, a competitor could just sit there
and click on their competition until the competition runs out of moneythen they take
over the first position. In our years of experience, we have actually seen people try to
do that. We have also seen that spiders and bots, just doing their normal days work, click
on our advertisers links.
Additionally, to be successful you have to have thousands of advertisers bidding to make sure that the amount being charged is high enough from which to make a viable revenue stream. You also need the large-scale distribution side of the business in order for this to be an effective business model. There are only a hand-full of companies that can actually do what we do, and those are the top portals because they already have the traffic. Its just a matter for them to eliminate the time-to-market concern, which we feel we will be able to do in the years to come with our new private label product.
CEOCFOinterviews: So you have it really wrapped up here?
Mr. Pisaris-Henderson: We feel we are taking the right strategic steps in building solid business partnerships with the smaller players while serving as a catalyst for the larger players. There is little doubt that our approach is very different from both Overture and Google and that some people do not understand our approach because of their desire to constantly compare us with the two largest players in the sector. However, we feel that our partnership-type approach is a better approach and puts FindWhat.com in a stronger position long-term since our approach makes us less dependant on any one partnership to maintain our revenue streams.
CEOCFOinterviews: Are you at a point where advertisers come to you, or do you have to reach out to them and how do you do that?
Mr. Pisaris-Henderson: The majority of our advertisers, upwards of 85%, come to www.FindWhat.com directly, set up their account, deposit their money in a totally automated format, and have never had human contact with us. We have built a very intuitive back-end system, which allows people to deposit funds via credit cards and manage their accounts, in fact, doing everything on their own if they so desire. From day one, we knew that we would have to develop this intuitive backend system that would allow thousands of advertisers to manage their own accounts. The only other option was to continue to add additional human representatives as we serviced more and more advertisers, and that quite frankly, is not a scalable model. But with this said, we do have a small, focused sales team that targets the larger companies.
As part of our ongoing effort to bring even more large companies into the fold, we have hired a vice president of sales that is developing yet another small, focused team to target large agency accounts out of our New York office. In 2003, we are going to be very proactive in going after agencies and large companies in terms of them participating in our network.
CEOCFOinterviews: Are your clients mostly United States companies?
Mr. Pisaris-Henderson: Most of our clients are U.S. companies. I do not know the exact ratio of US vs. global, but I can tell you that we have a strong awareness in Canada, the U.K. and Germany as well. With that said, we do have advertisers from many other countries but for the time being we are focused on the US market.
CEOCFOinterviews: Is that an area you would like to build out?
Mr. Pisaris-Henderson: We have international aspirations, but it is important to do it at the right time. We do not feel that the U.S. marketplace is anywhere near saturation, therefore, we are very much focused on the United States. The awareness abroad is increasing and we will take advantage of it, but at the right time.
CEOCFOinterviews: How would you explain your recent recognition by Deloitte and Touche Fast 50 as a rising star among the fastest growing technology companies?
Mr. Pisaris-Henderson: The recognition is based on percentage of growth. Over a three-year period, we grew over 24,000% or something along those lines. I think that goes back to speaking to our numbers. We were a company that didnt have much money to start with. At the end of November, we had over 20 million in cash and short-term investments with zero debt on the balance sheets. We have raised less than 15 million dollars and we have done all this in a very short time. As of Q3 2002, we have been profitable for 6 sequential quarters, with our top line and bottom line increasing sequentially. It really boils down to a management team that executes well, with Deloitte and Touche recognizing that execution.
CEOCFOinterviews: How do you overcome the DOT.COM stigma?
We really havent had too much of an issue there. I am not saying that we
dont run up against individuals that, upon hearing our name FindWhat.com, they say
things like thats nice and whats your burn rate. I get
those comments all of the time. I, along with our board members and shareholders, enjoy
telling them that we havent had a burn rate in well over a year-and-a-half, getting
close to two years now.
CEOCFOinterviews: What are the biggest challenges that you face and how are you preparing?
In 2002, the biggest challenge was growth. We grew the top-line over 100%, but the
real growth was internal. Early in our history we had to bootstrap everything.
We built things that were not make shift but were on the very efficient
and frugal side of the equation, in terms of determining what we needed to be
successful. In 2002, we started to build out the internal structure to be a robust global
system. Now, we are a globally redundant company, serving upwards of one billion searches
a month, which is one of the largest search distribution back-end systems in the world. It
is quite impressive and we have done it in an efficient manner.
Our biggest challenge going forward is diversifying the company into our different products and services. Core technology is working with the lower tier distribution companies. Our newest product is the FindWhat.com Private Label Service, which puts the top-tier companies in business for themselves. In 2003, we are anticipating launching a couple new initiatives that are going to be very accretive to our partners and our advertisers; which will diversify our revenue stream. I think that is going to be a bit of a challenge, but it is a challenge that we are ready to face.
CEOCFOinterviews: Will you give us some final thoughts for shareholders and investors?
I think the best advice that I could give to Wall Street right now is to take a look
at the online marketing and advertising sector very closely. Over the last few years, it
has taken much heat, in that the pure dollar amount that has come into our sector has
decreased. What really has happened is not evidence of a weakening sector, but a paradigm
shift. In days-gone-by, companies had to spend tens of thousands of dollars just to have a
campaign. Now, those same companies can spend a smaller amount while producing higher
returns. We are seeing products and services that work really well, such as the services
offered by FindWhat.com, taking market share.
ceocfointerviews.com does not purchase or
recommendation on stocks based on the interviews published.