Matthews launches latest venture: PrimaryClick.com
Larry Holyoke

Brian Matthews' latest brainchild, PrimaryClick.com, is up and running with an initial cash investment of $100,000.

Matthews said he expects the new Internet ad agency to seek another $250,000 to $500,000 from investors at the end of the first quarter 2001.

Meantime, the company is making do with an early infusion of cash and incubation services from CDMventures.com, a group of investors, including Matthews, his wife Carol and about 18 others. CDMventures has agreed to supply up to $150,000 in services to PrimaryClick, to be paid back out of cash flow, he said.

Trey Goede, a Matthews protege, who was vice president of sales at Primary Network, is chief executive at PrimaryClick.

CDMventures is the investment arm of CDM Fantasy Sports Network, the company that started Matthews' career as an entrepreneur seven years ago. The fantasy sports site launched with software that Brian and Carol Matthews developed at home while they were working at the former McDonnell Douglas. That led in 1994 to Primary Network, an Internet service provider. Matthews and fellow investors sold Primary Network to Rochester, N.Y.-based Mpower Communications Corp. in June in a deal worth $145 million.

Brian and Carol Matthews owned 8.214 million shares of Primary Network before the sale, or roughly 13 percent of the company, according to Mpower's filings with the Securities and Exchange Commission.

The 166,085 shares of Mpower they got in the acquisition were worth $6.9 million in May when the deal was announced to shareholders. Like many providers of Internet access and related services, Mpower's stock has plunged this year; Matthews said he and his wife sold their shares in August and September.

Mpower stock started August at just under $20 a share and ended September just over $5 a share. Assuming an average sale price halfway between, they would have made roughly $2 million.

Goede said 10 to 15 CDM Fantasy Sports employees, from Web designers to legal help, are pitching in at least part time to get PrimaryClick going. CDM Fantasy Sports also is providing free office space to PrimaryClick and its seven full-time employees.

CDM Fantasy Sports also is PrimaryClick's first customer. Thanks to a 50-50 split of about $35,000 a month in revenue from banner ads PrimaryClick sold on CDM Fantasy Sports' Web site, PrimaryClick is generating nearly enough revenue to break even, Goede said.

Matthews has been contemplating a locally focused Internet ad agency for some time, Goede said.

That's because Matthews, whose fantasy sports Web site draws about 10 million page views each month, was turned down by national Internet ad agencies such as DoubleClick and Flycast when it tried to sell ad space.

"They had a glut of inventory and did not try to understand our products," Matthews said.

PrimaryClick will sell ad space on clients' Web sites and place ads for clients on the Internet. It also will offer a banner ad exchange. For $100 a month, clients can place banner ads at the bottom of the Web pages of other participating companies. In exchange, the client opens a space for banner ads at the bottom of its Web page.

Goede figures by putting together a client list of St. Louis companies with space to sell on their Web sites, he can attract advertisers who crave local Web exposure.

PrimaryClick is just weeks away from a second customer with some local cyberspace to sell: Wehrenberg Theatres. The chain's Web site attracts 600,000 page views per month, said marketing director Kelly Hoskins.

She's been trying to figure out how to sell a piece of Wehrenberg's online real estate and was happy to hook up with PrimaryClick. Primary Network is host for Wehrenberg's Web site, and Hoskins worked with Goede when he was there.

So far, Wehrenberg only has swapped banners ads with other sites, such as major movie studios. But Hoskins figures plenty of local restaurants and retailers would find it worth the price to advertise on her site.

How much would they pay? Hoskins isn't sure. But Goede said the going national rate ranges from $20 to $30 per 1,000 page views for a banner ad. That works out to $12,000 to $18,000 a month for Wehrenberg for about five square inches of Web site that is just taking up pixels at the moment.

Hoskins hopes to have the final contract with PrimaryClick signed in the next week or two and to sell her first ads soon after. "They are very aggressive and very hungry, and they know our site is potentially a hot property," she said.

Despite the recent stock market bloodbath for Internet companies, Matthews said investors will bite on a second round for PrimaryClick. That's because this is a dot-com with a difference, he said: "We expect to have positive cash flow in the first quarter of 2001."

Besides, CDMventures will put up part of the second round, he said.

Contact Larry Holyoke at lholyoke@bizjournals