Smartmoney.Com

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SMARTMONEY.COM

SmartMoney.com, the online incarnation of SmartMoney magazine, is a comprehensive set of resources for individual private investors. It includes tools to aid in making investment decisions and tracking investments, as well as regularly updated information from the financial markets and daily news, analysis, and feature articles. SmartMoney.com gives intensive coverage to the most popular investment instruments, stocks, bonds, and mutual funds. The site is especially famous for its "Map of the Market," a graphical representation of approximately 600 different stocks, that offers investors an instant overview of market activity. The site also includes SmartMoney University, a set of interactive courses on a variety of investment topics, including strategic investment, investing for retirement, debt management, setting up and maintaining a college fund, and short-term investment. About 98 percent of the site is produced in-house by a staff of nearly 100 writers, editors, and designers. SmartMoney.com has been the recipient of numerous awards for design and content.

SmartMoney.com was the brainchild of Steven Schwartz, a former front-page editor of the Wall Street Journal. In 1992, with joint financing from Dow Jones & Company and the Hearst Corporation, Schwartz founded and took over the editorship of SmartMoney magazine. The magazine quickly became one of the most respected in the nation. It was named "Magazine of the Year" by Advertising Age and later won two National Magazine Awards.

Schwartz launched the online version of his magazine in September 1997 after two years of preparation. The Web site, also parented by Dow Jones and Hearst, was originally known as SmartMoney Interactive, positioning it clearly as a partner site to Dow Jones Interactive. From the start, the site was far more than just an advertisement for SmartMoney or an archive of its old articles. The site was staffed by 27 of its own technical, production, and editorial workers. Most of its content was produced independently of the magazine; it featured articles and analysis not available in SmartMoney —as many as ten original pieces every day. However, the soul of SmartMoney Interactive was to be found in elements that were impossible for any publication to duplicate, such as its regularly updated market charting functions and 30 interactive personal finance worksheets for calculating investment plans for retirement, college and the like.

When it was first launched, SmartMoney Interactive charged its users a fee. Regular subscribers paid $49.95 per year; Wall Street Journal and SmartMoney magazine subscribers paid $29.95 a year. Subscribers to the Journal 's online version, Wall Street Journal Interactive, could access SmartMoney.com free of charge. It became a free site, supporting itself primarily through advertising revenues, in summer 1999 and at the same time it changed its name to SmartMoney.com. Once access was free, the number of visitors to SmartMoney grew fourfold and the amount of time spent at the site every day for the average visitor doubled to forty minutes. Although most of the site was free, it continued to charge for some premium services, such as real-time market updates.

SmartMoney's site is one of the most comprehensive collections of investment information on the Web. Its securities section includes entire sections devoted to stocks, mutual funds, and bonds. Each section features news and analysis, historical information. Aimed at the personal investor, the SmartMoney site offers valuable tips on various aspects of personal finance: setting up a college fund for one's children, selecting the right insurance policy, purchasing an automobile and real estate, finding a job, making financial plans for marriage and divorce, and saving money on taxes. There is a searchable archive of two years worth of articles from Smart-Money, as well as from Dow Jones News and various newswire services. Selected articles from the current issue of SmartMoney are available to all SmartMoney.com users; they can purchase books and investment-related paraphernalia at the SmartMart.

SmartMoney.com 's great innovation is the use it makes of the medium of the Internet. The site incorporates a variety of unique features that would be difficult, if not impossible, to realize outside the computer's virtual realm. SmartMoney's Tools page combines continual updates with an interactive capability that enables investors to plan an investment portfolio and monitor its performance. The "Stock Sifter" makes it possible to screen more than 7,000 different stock offerings by personal criteria that are determined by the individual investor. Investors use the "Your Portfolio" page to set up and track the performance of as many as 50 different portfolios, each with up to fifty stocks; a for-pay version called Screener allows investors to use formulas devised by the Web site's own experts. Another for-pay page provides real-time, instantaneous updates of prices from the stock markets. Subscribers can even set up a SmartMoney account, which will automatically receive and pay household bills electronically. Smart-Money's online calculators enable consumers to figure the costs of car lease agreements, mortgages, retirement accounts, compound interest, as well as various taxes including capital gains, estate taxes, home sales tax, and the "marriage penalty." In late 2001, the site introduced a "Bush Tax Cut Calculator" with which tax payers could estimate their savings over time under the new tax law.

In 1999, SmartMoney.com introduced Smart-Money University, a series of online tutorials that take investors, from beginners to old pros, through the fundamentals of investing and on into more specialized areas. The first course, "Investing 101," begins with interactive lectures on how investment works. From there the student moves on to a comparison of risk and reward in investment, a six-part class on the forces that affect the stock market, how to choose a mutual fund, the workings of the bond market, specialized investment forms such as certificates of deposit and money market funds, and finally the tax issues investors must consider. The second course, "Taking Action," is designed to prepare a potential investor for the dive into the action by teaching the basics of asset allocation, putting the first portfolio together, and finding a broker. "Strategic Investing" introduces the student to the ins and outs of selecting stocks, bonds, and mutual funds. The course "Retirement 401(k)" describes the investment accounts issues related to investing for one's retirement. "College Planning" tackles the same questions sending one's children to college. "Short-Term Investing" discusses strategies and risks connected with the short-term. The final course is entitled, perhaps ominously, "Debt Management." It is made up of individual tutorials on mortgage refinancing, debt consolidation, the pros and cons of borrowing from one's 401(k) account, and dealing with credit cards. Anyone who makes it through all of the lectures in SmartMoney University should find him or herself with a solid grounding in the language and concepts of investment.

Of all its features, SmartMoney.com was most famous for its stock market maps. SmartMoney's "Map of the Market" went online in early 1999 and was an immediate hit. The map breaks down the stock of some 600 companies into industrial sectors, represented as squares whose relative size on the map is proportional to the size in the market. Within the industry squares, companies are also represented proportional to their size, and are colored green or red to indicate whether the stock is up or down. As one moves the cursor from square to square and company to company on the map, charts, news, quotes, earnings estimates, analysts' recommendations, and other current information about companies pop up automatically. Updating of information on the map is constant. The map's graphic presentation provides a unique and understandable view of the forces at work in the market at any given time.

The Map of the Market quickly became one of the most popular features on SmartMoney.com. Other maps were later developed for the site, including historical maps and maps of specific market sectors such as technology, health care, the Internet, telecommunications, energy, consumer, and utilities sectors. An expanded Market Map 1000, which tracked 1000 U.S. and foreign companies, was introduced, along with real time, for-pay versions of all of the maps. In March 2000, SmartMoney.com released MapStation, a software package that enabled investors to create customized maps of their own which tracked the performance of their personal portfolios, broken down into sector and company. MapStation could also be set up to give instant on-screen alerts when a stock hit a certain price. MapStation was offered by SmartMoney.com as a free download or CD-ROM. The price of a subscription to the update service illustrated better than any graph the value of up-to-the-minute stock market information to the serious investor—for $49.95 one got real-time updates; for $9.95 the information was delayed 15 minutes.

SmartMoney innovations were adopted by other Web sites. In June 2001, Standard & Poor's ComStock Web site licensed SmartMoney's mapping technology. But Web sites that did not specialize in investment and financial also showed interest in SmartMoney. In summer 2001 the Smithsonian Institution unveiled a virtual exhibit titled "HistoryWired: A Few of Our Favorite Things," on the museum's Web site. It offered a tour of the Smithsonian's storage areas, including many items that are rarely on display at the museum because of space limitations. SmartMoney donated its MapStation technology, which was used to create the exhibit behind its Map of the Market, to the Smithsonian. It was one of the first times the software was used for a non-financial purpose, something SmartMoney's research and development department hoped would catch on.

In the course of establishing its presence on the Internet, SmartMoney.com established a number of important strategic alliances with other Web companies. In early 1998 it made a deal with Bridge Information Systems, a company that generated data about national and international financial markets. Under the agreement, Bridge's real-time and historical data was made available to SmartMoney.com. Later in 1998, it made deals to establish its presence on such popular Web sites as Lycos, Yahoo!, NetZero, Priceline.com, and America Online. So successful was the site that in October 1999 Hearst and Dow Jones jointly invested an additional $30 million in the Smart-Money venture to fund an expansion of staff, news coverage and editorial features. By the end of 2000, SmartMoney's technology unit was licensing its Web applications to other about 70 companies, among them financial leaders such as Fidelity, American Express, and J.P. Morgan.

SmartMoney.com won numerous awards for its site design and content. It won the Investment Company Institute/American University award for online personal finance journalism three years running, from 1998 until 2000. In 1999 it received both the I.D. magazine Gold Medal in Interactive Design and the Industrial Design Excellence Award from the Industrial Designers Society of America. In 2000 the American Association of Individual Investors (AAII) named it the most comprehensive Web site in seven different areas: Comprehensive Sites, Retirement Planning, Personal Finance/Financial Planning, Portfolio Tracking, Financial News & Analysis, Mutual Funds Data, and Stock Data. It received a 2001 National Magazine award for Best Interactive Design.