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April 17, 2020
It’s a good time and a tough time to be covering news about the stock market.
As many media companies are experiencing record audiences, they’re simultaneously being hit by a drop in advertising.
That’s also the case at MarketBeat, a Sioux Falls company that aims to become the market leader in delivering stock market research.
As the stock market tumbled in March, page views at MarketBeat climbed 40 percent, with visitors especially interested in pharmaceutical companies and businesses that were negatively impacted by COVID-19.
At the height of the unrest, page views approached 3 million per week.
“At the same time, there has been a shakeup in display advertising due to some advertisers having to pause their campaigns and others retooling their messages to match the current market environment,” founder and CEO Matt Paulson said.
Revenue dropped about 25 percent year-over-year for the month, but that was compared with an especially strong month one year ago, he said.
“It will probably take a few months for us to know with certainty how the financial media industry will be impacted by COVID-19,” Paulson said.
“So far, most investors aren’t panicking and pulling their money out of the stock market. If we continue to see month-over-month declines in the market into May and June, we could start to see larger numbers of investors cashing out of their stocks to avoid the risk of additional losses. When investors start to capitulate in mass like they did in 2008 and 2009, that’s when our industry really starts to feel the pain of a down market.”
MarketBeat, though, appears to be on a solid growth trajectory regardless. Paulson started the venture in 2006 as a freelance writer specializing in personal finance content. It turned into a finance blog called American Consumer News the following year and became a website in 2009. In 2011, he launched a site called Analyst Rating Network, which was rebranded as MarketBeat in 2015.
Its growth accelerated in 2013, and revenue doubled in three subsequent years.
“Since then, we’ve been growing by about 30 percent each year and ended 2019 with $7.8 million in top-line revenue,” Paulson said. “Our network of websites attracted more than 11 million page views during the month of March, and we recently crossed 1.4 million email subscribers.”
Its growth was recognized recently as one of the 250 most successful privately held companies in the Midwest on Inc.’s inaugural ranking of companies in the region. MarketBeat ranked No. 174 on the 2020 Inc. 5000 Series Midwest list.
The business recently leased downtown office space in The Crane Centre on East Eighth Street for a staff that has grown to eight people, with six based in Sioux Falls, one in Florida and one in Utah. Employees focus on software development, business development, customer success and editorial content.
Paulson attributes the company’s success to three factors, starting with its ability to do search engine optimization for financial content.
“For many years, our websites made up 10 to 20 percent of the search results for publicly traded companies on Google Finance, MSN Money and other large financial portals,” he said.
“Second, we developed natural language generation technology that takes structured financial data such as an earnings report and turns that into an article that we can publish on our websites. NLG technology allows us to publish a large volume of news about smaller companies like Daktronics and Raven that are often overlooked by larger financial media outlets.”
Finally, the company is “exceptionally good at leveraging email marketing to sell our company’s premium products and drive customers to our advertisers,” he said.
The office will be 1,200 square feet initially and could be expanded in the next couple of years. The hope was to move employees in by late May, but social distancing requirements will dictate some of that.
“Our office will be something special when it’s complete,” Paulson said. “We had every surface repainted, and the floor resurfaced and polished.
“Custom tables are being made by Tom Ries, a local woodworker. Zach DeBoer is painting a mural on one of our walls, and the office will feature art from other local artists as well.
“The space we are going to be in used to be a loading dock, so there are manhole covers in the space for drainage. We are having Bronze Age Art Casting make new iron manhole covers that feature our logo and our core values to replace the covers that are there now,” Paulson said. “We’re really having a lot of fun with it, and we’re trying to use as much local talent as possible for it.”
The office also can be used for Zeal Center for Entrepreneurship and Startup Sioux Falls events, and gaming boot camps organized by MarketBeat employee Will Bushee.
Paulson describes his company as a “weird” one and said he’s OK with that. It didn’t have an office for its first nine years in business. Employees can set their own hours and work from there they want.
“We have relatively few customers in Sioux Falls, but our company has a subscriber list that is five times larger than the size of the Sioux Falls metro area,” he said.
“We try to avoid long meetings, dress codes, company retreats, mandatory company social activities and generally anything that people dislike about corporate America. Nobody in our company has a MarketBeat business card, a company-issued email address or even a work phone number. By setting aside a lot of the things that most businesses assume they need to have, we have been able to focus on our core mission and growing our business.”
And he has big aspirations for continued growth.
In the next 12 months, he’s making what he called big bets on original content and on creating new web-based investment tools.
The company just launched a new proprietary stock rating system called Beat the Market Rank that rates companies based off analysts’ recommendations, community opinions, dividend strength, company ownership and earnings growth. It also plans to produce some long-form investing guides about specific industries that will either be free or available for a nominal fee.
“Ultimately, our goal is to displace Yahoo Finance as the premier website for stock market research,” Paulson said.
“Yahoo Finance is about 15 times the size of MarketBeat in terms of web traffic, but they also have a 15-year head start on us. We think investors are ready to move away from Yahoo’s set of legacy investment tools and that MarketBeat is well positioned to gain market share.”
Regardless of the market, we think you’ll agree this Sioux Falls company’s stock is up. With a new office and a big ranking, MarketBeat keeps growing.