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This article by Barbara Fox was published in U.S. 1 Newspaper on July 7,

1999. All rights reserved.

Ex Dow Jones-ers Start Online Services

Think of start-up Internet companies and you think

of 20-somethings leveraging a shoestring and hoping to strike it rich.

This web startup is very different. Five Dow Jones alumni — men

who pioneered in the business of putting business information online

— have raised $1.2 million to publish their first product, an

online combination of newspaper and newsletter for a vertical, sharply

defined market.

These vertical product websites will be like trade magazines, but

with the additional capabilities that the Internet offers, says Craig

O. Allsopp, one of the founders of VertiNews.com Inc. (http://www.vertinews.com).

By delivering all the information that a particular professional needs

— and only that area of information — these services can act

as antidotes to the confusing, scattershot results usually generated

by search engines, and they will combat information overload.

Allsopp, president/CEO and the only full-timer of the five, has set

up his office in 1,200 square feet at the Straube Center in Pennington.

Next month he plans to launch the first specialized news service,

for the commercial real estate industry, at a cost of $1,200 per year,

a price competitive with industry newsletters. "Our goal is to

be as timely as most of the news wires and as authoritative as the

professional news letters," says Allsopp.

"Our focus is high quality journalism using the web for distribution,"

says Allsopp. He expects to introduce six to ten products in the next

eight months. Each site will have real-time coverage of breaking news

stories filed by correspondents around the country, a reference archive,

relevant links to other websites, and a provision to set up customized

profiles with E-mail alerts available.

"We are all old Dow Jones hands with great respect for the traditions

of fact-based journalism," says Allsopp. "We all grew up providing

high quality news and information services to a professional marketplace

where people paid for information as they would pay for consulting

services." This will be a valid model for specialized marketplaces,

he believes.

The other former Dow Jones-ers are William L. Dunn, board chairman,

former executive vice president of Dow Jones and senior vice president

of American Online; Charles Brady, former vice president of technology

at Dow Jones; Everett Groseclose, managing editor of Dow Jones News

Service (the major equity news wire); and James C. Furlong, founder

of several news wires and former managing editor of AP Dow Jones,

the company’s major international news service (http://www.wsj.dowjones.com). They are joined by

Brewster Kahle, inventor of Wide Area Information Server (WAIS), an

electronic publishing technology sold to America Online. He was chief

technical officer of Alexa International, one of the hottest of the

hot companies, just sold to Amazon.com.

"They have smart people who understand better than almost anybody

else the importance of providing the specific information people need

when they need it. They have been developing online services since

the early 1970s, before almost anyone else was doing it," says

John F. Kelsey III, himself a Dow Jones alumnus, now president of

the Montgomery Commons-based Kelsey Group, a consultant to electronic

and print publishers on opportunities in new information delivery

technologies.

Allsopp went to Davis & Elkins in West Virginia, Class of 1973, and

has a master’s degree from Penn State in journalism. After being a

reporter at United Press International he spent 17 years at Dow Jones,

where he helped develop Dow Jones News Retrieval, and he was vice

president for U.S sales at Dow Jones Markets/Americas when Telerate

was bought by Bridge Information Services.

"I had no desire to work for Bridge: I wanted to get involved

with a small company, work closer to home, run my own show, and get

an equity stake in the business," says Allsopp, who lives in Pennington

with his wife and their three teenage children.

One of the things we are taking great pains to do is

hire people with professional level journalism experience as our correspondents,"

says Allsopp, "people who have worked for major papers, wire services,

and major magazines, people with a burning desire to break the mold

and develop a new type of journalism. We are making a substantial

investment in high quality people." One of the senior editors

is Rich Heidorn, who for 17 years did investigative reporting and

editing at the Philadelphia Inquirer. The editor of the first service

will be by Orest Mandzy, formerly of the respected newsletter Commercial

Mortgage Alert.

"Our domain experts will build our services and provide analysis

of important events and industry trends," says Dunn. "Expert

knowledge and coverage — supplying breaking news and in-depth

research services — that’s what VertiNews is all about."

In charge of advertising is Bernie Turner of the Hopewell-based Dana

Communications (http://www.dananj.com), and one of the attorneys is Frank F. Barr, formerly

of Dow Jones. Groseclose lives in New Mexico but will do stints on

the news desk; Furlong lives in Connecticut but is doing recruiting;

Brady has been handling technology development; and Bill Dunn, says

Allsopp, "provided senior executive guidance."

Running ahead of VertiNews, by four years, is VerticalNet, which has

43 individual group markets grouped by such industries as communications,

environmental, healthcare, and service. It gets half of its income

from $6,000 annual fees for storefronts (one page advertisements with

links that generate sales leads), 45 percent from high-priced buttons

and banners, and five percent from margins on transactions that take

place at the site (http://www.verticalnet.com).

Though VerticalNet has yet to make a profit, it is capitalized to

the tune of $2 billion (trading as VERT on Nasdaq) and, thus encouraged,

other companies are leaping on the vertical market bandwagon. But

Mark Walsh, the founder of the company based in Horsham, Pennsylvania,

says he has a big head start: "We know of nobody else that is

near our breadth or size as a market maker."

Though at first glance the two companies are similar (for instance,

each puts a name brand editor at the top of each page), VerticalNet

has a different business model. As a market maker it puts buyers and

sellers together to earn profits, whereas VertiNews will be a content

provider, and Walsh predicts it will be a successful one.

Says Walsh: "I don’t know of any content-oriented company that

is running a business with content organized by industry as distinctly

as Bill and Charlie are doing." He envisions buying content from

VertiNews and does not expect the Dow Jonesers to intrude on his turf:

"Working for Dow Jones doesn’t mean you are successful as a market

maker; it does mean you can be successful covering the issues that

surround the market."

Will Allsopp, like Walsh, cash in by going public? He hedges: "Number

one, I want us to be a good company, to build something that is sustaining.

If we build a good company good things will happen to us."

— Barbara Fox

VertiNews.Com, 108 West Franklin Avenue, Straube

Center, Suite I-20, Pennington 08534. William L. Dunn, chairman. 609-730-9268;

fax, 609-730-8652. Home page: http://www.vertinews.com.


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