Profiting From Politics

Profiting From Politics

Profiting From Politics

Tracking politics as it's practiced on the Web.
Nov. 12 1999 3:30 AM

Profiting From Politics

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Slate and the Industry Standard join forces to examine the effect of the Internet on Campaign 2000.

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.

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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?"

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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."