Business Overview

Bankrate's business model has enabled it to become the Internet's leading consumer banking marketplace. Bankrate, Inc. operates, one of the most visited destinations on the Web. The site connects more than 4,800 financial institutions with more than 4 million individuals each month who are seeking objective information that will enable them to make critical personal finance decisions. provides in-depth information on mortgages, credit cards, new and used auto loans, money market accounts and CDs, checking and ATM fees, home equity loans and online banking fees.

Revenue is generated through online publishing, hyperlinks (advertisements which facilitate transactions between buyers and sellers), print publishing and licensing. More than 450 financial institutions advertise on The majority of advertisers are traditional banking institutions that recognize the value that Bankrate offers in reaching new customers via the Internet.

With connections to more than 80 online partners, including Yahoo!, America Online, MSN, The Wall Street Journal Online and The New York Times Online, has become the preferred channel of distribution for consumer banks on the Internet.

The Company's information is also distributed through more than 100 newspapers, including eight of the nation's top 10. Customers include The Wall Street Journal, The New York Times, USA Today, and numerous other national and regional publications.

For the first quarter ended March 31, 2003, Bankrate, Inc. reported its sixth consecutive profitable quarter as a result of increased advertiser demand and traffic patterns. Net income rose to a record $2.0 million, or $0.13 per share on a diluted basis, from $690,000, or $0.05 per share on a diluted basis, excluding the non-cash gain on early extinguishment of debt of $2.0 million in the quarter ended March 31, 2002. (Net income for the quarter ended March 31, 2002 was $2.7 million or $0.19 per share on a diluted basis). Total revenue for the first quarter rose 52% to a record $8.5 million from $5.6 million in the first quarter of 2002. These results reflect Bankrate's ability to generate strong top and bottom line growth on a stable fixed expense base.

For the eighth consecutive quarter, the Company generated cash from operations. Cash increased $1.8 million from $11.0 million at December 31, 2002 to $12.8 million at March 31, 2003, and Bankrate remains virtually debt-free. The strong balance sheet and cash flow represent a solid base for future growth, enabling Bankrate to extend its product lines either through internal expansion or by acquisition.

comScore Media Metrix ranks as the Number 1 site in the Financial Information and Advice category. Consumers view as a trusted brand, a site where they can educate themselves about all aspects of a banking transaction, and where they can privately comparison shop to find the products to best meet their individual needs. Bankrate's competitive strengths, include:
High Quality Editorial and Data -- The Company is respected as the authoritative online, print and broadcast source for rates and editorial content on banking and credit. Bankrate is the data source of record for the Associated Press, Bloomberg Financial Markets, the New York Times, the Wall Street Journal, and the Federal Reserve, as well as over 100 print publications.
A Free and Neutral Marketplace -- Bankrate's rate information and rankings are completely objective. All US banks, credit unions and other financial institutions are able to be included regardless of whether they advertise or not. Rate data is normalized so the consumer can easily make "apples-to-apples" comparisons.
Ease of Use for Decision Making -- Bankrate facilitates transactions between buyers and sellers by listing current rates, and telephone numbers for financial institutions -- some of which are hyperlinked through an advertising arrangement. Consumers are able to connect with ease and speed with the specific banks that meet their individual needs.
Value for Advertisers -- Advertisers are keenly aware that is the place to reach consumers who are in the midst of making serious financial decisions. Therefore, advertisers are willing to pay premium rates to compete for the Bankrate "in-market" audience. The vast majority - over 90% - of Bankrate's advertising base are traditional companies, not dot-coms.
A Network with Reach -- Bankrate was one of the early adopters of both the Internet and the co-brand distribution model. The Company currently has more than 80 partners that contribute 30% of the Bankrate's total traffic. These partners include some of the top tier Web sites including AOL, Yahoo!, MSN, Bloomberg, USA Today, Motley Fool, and NASDAQ.

As a category leader and a trusted source, Bankrate has built enormous brand equity and a very strong franchise. These elements and the Company's technological infrastructure could be extremely expensive to build from scratch.

The management team has successfully implemented a restructuring strategy and has made the infrastructure investments necessary to enable the Company to continue to grow profitability. Covering more than 100 products segmented geographically in all 50 states, the Company is sufficiently diversified to meet the needs of most Americans in any economic cycle. The Company's strong balance sheet and cash flow have placed it in the position of being able to take advantage of opportunities that may present themselves to extend its product lines either through internal growth or by acquisition.