By LISA BRANSTEN Staff Reporter of THE WALL STREET JOURNAL
The battle to make real businesses out of dot-coms is winding down with few winners, but some investors are betting that at least one company with a chance is one that certainly understands the art of war.
Military Advantage, a Web site (www.military.com) that targets veterans and people in the military, is announcing Monday that it has secured $5.5 million in a third round of funding that should take the company to profitability. While raising any money in such a market is a feat, the company, which didn't manage to bring in new investors, brought in the money from its original backers: Mayfield, US Venture Partners and Primedia Ventures.
Christopher Michel, chief executive of the San Francisco company, makes no bones about the fact that the company is a consumer-oriented business, though the company changed its corporate identity back to Military Advantage from Military.com last year to reflect its move to offer some offline services.
Still, he says that his 1.5 million members and target audience of about 50 million people are very desirable to advertisers. The company's primary business is slicing and dicing the data from its membership rolls and sending information to interested members on behalf of companies, the military and other organizations interested in reaching Military Advantage's audience. For example the company has an agreement with for-profit education company DeVry in which it gets fees for sending the school leads about members who are qualified for its programs and have expressed an interest in taking courses there.
Michael Levinthal, a general partner at Mayfield, says that while his firm has let dot-coms such as govWorks.com die, it decided to continue funding Military Advantage because he believes it has a sustainable business model and a disciplined team that will be able to meet goals on a budget.
And what of the other group of sites that were also targeting a military audience? It seems that Military Advantage is one of the few left standing and that may be half the battle.