Profiting From Politics
Forget
retailing. On the Net, the next hot online business is politics. Consider: On
Voter.com, a site that launched
last week, voters can fill out e-questionnaires and search for the candidates
with whom they most often agree. On Politics.com, another new site, voters can plug in their ZIP
codes to search Federal Election Commission filings to see who their neighbors
donated to. On Vote.com, a site
run by ex-Clinton adviser Dick Morris, citizens can answer a poll and have
e-mails stating their positions automatically shipped to senators and
representatives.
On the
eve of the 2000 presidential election, the world of politics has shown it can
embrace the Internet by offering a slew of for-profit Web sites. These and
other sites are arming voters with tools that they have never had before to
find information and express views. As a host of entrepreneurs chase the
Internet gravy train, the question is whether politics can form the basis of a
real company. Can a political Web site go public and raise millions?
"It's
not like selling books on the Internet," concedes Jerry Anderson, a partner
with Skywood Ventures, a Sand Hill Road VC firm that is funding Voter.com,
which proposes to make revenue via personalization and advertising. "This is
new and different and no one has done this before. ... We believe that lots of
other people have made a business out of providing these messages and providing
the medium. We don't see any reason why it won't be the same for the
Internet."
Already, there are political content sites sponsored by major news outlets,
such as the Washington Post 's OnPolitics feature, where people can
search for information via their ZIP code. There are party sites. And there are
nonprofit sites that have made names for themselves by providing quality
political information. One such site is the Democracy Network, which won a
recent FEC ruling lifting the ban on nonprofits hosting online candidate
debates. Other sites are experimenting with technology, such as FreedomChannel.com, which
provides video-on-demand of the presidential candidates, broken down by
issue.
"We
thought at a time when you're introducing a new technology, it is probably wise
to do so in a way that encourages public trust rather than public distrust,"
says FreedomChannel founder Doug Bailey. "For-profit sites face the same hurdle
as any other site on the Internet: What is the motive behind the people
providing the information? That begs the next question: What do they do with
the information I give them? What's their agenda?"
Marc
Jacobson, president of Politics.com, a general-interest political content site,
says that since politics is already a huge business in the physical world,
there's no reason it shouldn't be in the online world. The business model for
Politics.com involves selling ads. "It's the older, more educated, more
affluent people who vote, and they also have higher Internet use," notes
Jacobson, a former Prodigy exec. "I think that car manufacturers and computer
manufacturers are all going to want to speak to this audience."
Voter.com, a site that uses personalization features to put people in touch
with candidates, is also seeking ad revenues. The company contends that
candidates and campaigns will be a source of this advertising, once the site
starts to build traffic. "There's been a constant argument on the Web since the
beginning. There's always been a push to do things for free for the good of the
world," says Justin Dangel, Voter.com's 25-year-old founder, who has every hope
of going IPO someday. "To pay for the resources to create a first-class
political Web site," including staff, technology and marketing, Voter.com had
to be for-profit, he adds.
Some
observers are skeptical about the business models being proposed by the new
political sites. "There is no money to be made billing for sending messages to
the government," says Michael Cornfield, a professor at George Washington
University.
Dick
Morris, who paid $250,000 for the Vote.com domain name, believes his site will
help citizens express their views to elected officials. But the site has been
criticized by the likes of Rush Limbaugh and other pundits for "spamming" the
government.
Snaps Morris: "Anybody who
thinks that getting a communication from a voter in your district is spam--that
guy is pork. Roast pork unless he changes his point of view."
