Number of financial portals expected to drop this year
By : Justyna Wrobel
After an avalanche of financial portals hit the market last year, industry watchers predict that only the fittest will survive 2001.
Just 13 months ago, the only financial portals or business-related Web sites in operation were parkiet.com.pl, owned by publishing house Parkiet, and biznes.onet.pl. Now there are more than 10 "real" financial portals, according to Boguslaw Serafin, editor in chief of financial portal Bankier.pl. In addition, numerous business newspapers and magazines have launched online versions of their publications. Banks and brokerages have also started selling their products on the Net. The problem now, businesspeople say, is that there are simply too many of them.
"In general, there are too many financial portals because the market is too small," said Lukasz Kwiecien, editor in chief of Parkiet's newspaper and portal.
According to a February report by market research company SMG/KRC Poland Media, the most popular financial portals include parkiet.com.pl, euromoney.pl, expander.pl and Bankier.pl. The most frequently visited finance-related sites are Onet.pl, Wirtualna Polska, Interia and Arena, as well as Rzeczpospolita's online service and smaller financial portals such as Portfel.pl and Money.pl.
Kwiecien said that even though the demand for financial information in Poland is smaller than the supply of online portals and services, in a few years that could be a good thing for users. "It is a reason for future optimism," he said.
Until that time arrives, however, financial portals are finding it difficult to survive.
Andrzej Kasperek, an IT analyst at COK Banku Handlowego, said that most portals are trying to generate the bulk of their revenue from advertising, which just isn't enough to pay the bills. "Today it's a source of revenue but not a source of profit," he said. But once e-commerce takes off in the form of online financial transactions, everything will change, he said. Whether this will happen largely depends on the passage of the e-signature bill currently in the Sejm, which aims to bolster security in online transactions, according to expander.pl's president Adam Niewinski. If buyers cannot be assured of security, they will not conduct deals over the Internet, Kasperek added.
Piotr Placha, a business developer at euromoney.pl, provider of business information, said that financial portals have other ways to generate revenue, such as by selling banner ads or running sponsored articles. However, he said the best way to make money in the future would be by selling the site's content.
"It should be the main task of a vortal (vertical portal)," Placha said. "Advertising is a part of (revenue), but dotcoms won't survive on ads alone."
Expander.pl's Niewinski agreed. "I can't imagine setting up a financial portal and trying to survive on banner ads."
Wroclaw-based Bankier.pl, which is 71% owned by publicly listed venture capital company MCI Management, generates 60% of its revenue from advertising, about 30% from content sales and the rest through e-commerce services, said the company's president, Maciej Jarzebowski. In 2000, Bankier.pl generated zl. 1 million ($227,000) in revenue, but it invested zl. 1.05 million ($238,000) to launch the portal.
Jarzebowski said he expects Bankier.pl to start earning a profit this year.
Niewinski of expander.pl said that although the company has recently begun offering assistance with financial transactions, he doesn't expect the portal to make a profit for another two years.
According to Kasperek, there is only enough room on the market for three horizontal portals such as Onet.pl and Wirtualna Polska, and one vortal for a particular sector, for instance parkiet.com.pl, which provides information on the Warsaw Stock Exchange.
"In fact, there is no portal today without financial problems," Kasperek said. A lot of portals hire employees to gather content, which costs a lot of money. "So the situation of these portals can't be good."
Expander, which is 90% owned by Softbank (through its subsidiary FinFin), a producer of banking software, has already burned through most of its zl. 20 million ($4.5 million) in start-up capital, Niewinski said. In addition to a costly Internet software license, the company spent about zl. 5 million ($1.14 million) on advertising (not including discounts) a necessary outlay to introduce the portal to a wider audience. Today expander.pl has 35,000 registered users, Niewinski said, adding that he's looking to boost that figure to 75,000 by the end of the year.
According to Niewinski, the number of financial portals will drop this year, and the survivors will have to define their business image and strategy, and most importantly, how they're going to generate cash.
"Start-ups were thrown into the deep end (last year)," Placha said. "And it would be really wrong if good dotcoms died by the thousands." However, he was confident that not all would be lost. "Certainly good ideas will be noticed."
