This letter was sent by the president of StockCharts.com to the registered users of the site. It gives a nice summary of the situation faced by many intermediate-sized Web sites in the current environment:
Hello Fellow ChartWatchers,
Even though StockCharts.com is a privately held company, we consider
users like yourself to be members of our "Board of Directors." As such
we need you to review the following information and the conclusions
we've drawn from it. At the bottom, you find a proposal that will
significantly impact your use of the site next year.
This information gives you a better picture of what it takes to run a
real website these days. You'll probably be surprised by some of it.
You'll even learn what my salary is!
StockCharts.com is run by only four people. Many competing sites employ
50 or more.
It takes over 20 different computers to power StockCharts.com. They
have more than 50 Gigahertz of CPU power, more than 8 Gigabytes of
memory, and over 500 Gigabytes of disk storage. Over one and a half
miles of wiring connects everything together and our battery backup
power units weigh over 200lbs.
We track over 22,000 different stock symbols in our main databases. The
historic price database has over 40 million rows of data. Every day,
over 800,000 rows of price information are added or updated.
Our T3 connection to the Internet can send up to 45 Megabits of data out
every second. That's 822 times more data than a standard 56K modem can
(assuming the modem is working optimally).
Our busiest times of the day for us are from 10AM to 11AM and from 4:00
to 4:30PM (Eastern). Our slowest times are on the weekends and on
weekdays from 2AM to 5AM (Eastern). During market hours, there is a
slight lull around 2PM.
During peak times, we are serving more than 1,500 SharpCharts every
minute. The average size of a SharpChart is 9K. On average, charts are
created in 1/3rd of a second.
We currently receive revenue from three main sources: Business partners,
Extra! Customers, and Free Customers (via advertising).
We are more popular than ever. Since Feb-2001, our site traffic has
increased four fold. We are setting bandwidth utilization records every
The crash of the on-line advertising market continues to hurt. Despite
the increase in site traffic, since Feb-2001, advertising revenues have
dropped by a factor of five. Ads currently makes up only 5% of our total
We have 25,450 newsletter subscribers right now. Only 1,350 of them are
Extra! members however.
Over 11,000 unique visitors come to our site on a typical day. The
ratio of Extra! members to daily visitors has decreased significantly
since Sept. 11th.
Since Sept. 11th, revenue from our business partners has dropped 46%.
Leads for new charting partnerships have dried up in the face of the
"dot com" recession. Most partnership proposals we get these days are
Since Sept. 11th, revenue from Extra! subscriptions has dropped 22%.
The subscription rate for new members has fallen significantly despite
additional spending on advertising.
StockCharts.com is a private company. The president owns 51%. One
outside investor owns 11%. The employees own the rest.
The total amount of money invested in the company since its founding in
May, 1999 has been less than $1 million. The majority of that money
came from the president. Unlike most "dot bombs", SCC has spent its
In the current economic climate, the odds of raising additional venture
capital are almost nil.
Salaries are well below the industry averages. In fact, the president
of StockCharts.com doesn't make a salary despite working 12+ hours a
day, 6+ days a week.
StockCharts.com currently has no debt, plenty of cash on hand, and lots
of loyal users (like you!).
The odds of Congress passing "bail out" legislation for dot-coms like us
is zero. :-)
Bottom Line: Despite being one of the few well run "dot coms" out there
right now, the current recession and the effects of Sept. 11th have
caused our main revenue sources to "dry up" while increasing traffic has
increased our expenses.
Conclusion: A change in our business model is required to keep the site
viable over the long term. We need to insure that increased traffic
leads to increased revenues.
So here's my proposal to the board (hey, that's you!):
Starting on January 1, 2002, StockCharts.com will introduce a $9.99/mo
"Basic" subscription model. Basic subscribers will be able to:
- Create customized SharpCharts
- Save up to 50 charts in a single list
- Use our ChartNotes annotation tool
- Access our predefined scan results
- Create Point & Figure charts
Note: There aren't any new capabilities in that list. These are the same
features that users get for free on the site now.
Free users would only be able to create SharpCharts in a single, fixed
format. They would still be able to access MarketCarpets, PerfCharts,
Gallery View charts, CandleGlance pages, the Public Chart Lists, the
Dynamic Yield Curve, the newsletter, and everything else we currently
provide for free.
Of course, our Extra! service will continue to be available for
$19.95/mo and will offer almost unlimited access to our tools -
thousands of stored charts, user-defined scans, automatically updated
annotations, and much more. If you are already an Extra! member, this
proposal should not impact you at all.
While it is disappointing to decrease of free services, I feel that this
proposal is a good middle-ground between the totally-free model that we
have now and the totally-pay model that we want to avoid.
I look forward to reading any comments you may have on these ideas.
One last thing:
Due to continuing confusion (and outright abuse) of our refund policies,
we will discontinue our discounted, long-term Extra! subscription offer
at the end of this year. Starting on January 1st, only month-to-month
subscriptions will be offered. The good news is that we WILL have an
automated renewal process in place before then which will make paying
for month-to-month subscriptions much easier.
Note to Existing Extra! Members: This policy change will not affect you
in any way until your existing account comes up for renewal.
Note to Monthly Extra! Members: If you like Extra! and want to extend
your subscriptions as economically as possible, this policy change means
that you have until December 31st to do so. Note that NO REFUNDS will
be issued for these extensions so please be sure that you are satisfied
with Extra! before ordering. Visit
http://stockcharts.com/corp/extra.html for details.
Sorry to hit you with all of this at one time but in these economic
conditions, fast action is often called for.
We will be adding more information and clarifications about these
changes to the site in the coming weeks. Check the "What's New" section
of the homepage often for updates.
Thanks for your time,