Web Site Picks Best Long Distance Buys
A new Web site advises consumers on the best choice in long distance
Jonathan Ebinger is tired of the long distance price wars. In fact, he's tired of a lot of price wars.
So on Oct. 17, with $15,000 in hand, he launched a World Wide Web site that helps consumers find the cheapest long distance plan to fit their calling patterns.
His company, Simply Savings, Alexandria, Va., has already attracted the eyes of two of the largest Internet search engine companies and three of the biggest long distance providers -- AT&T, MCI and Sprint.
The Web site (http://www.simplysavings.com) advises users on which of the three providers' calling plans is the most economical, based on a sample of 10 typical calls the consumer makes per month. The user's calling pattern is evaluated against the prices filed with the Federal Communications Commission by the carriers. The FCC requires long distance carriers to submit their prices on long distance service, including promotions.
But this is only the beginning. Ebinger is trying to attract $1 million more in venture capital to expand his offerings. He plans to launch a new consumer comparison service every quarter for the next year. He has set his sights on the local phone service business, cellular service, credit card comparison, paging services and utilities.
"Long distance is the tip of the iceberg," said Ebinger, a former MCI pricing consultant.
Simply Savings then suggests to the user the best calling plan. The FCC does not allow Simply Savings to switch consumers' calling plans. This is to avoid slamming, the illegal practice of changing a customer's calling plan without consent from the carrier and the consumer. Simply Savings is required to get consent over the Internet from the consumer.
The company is currently negotiating deals with the three carriers to sell them the names of customers who give consent to change plans. Ebinger doesn't plan to include other carriers in his service because AT&T, MCI and Sprint control most of consumers' phone service.
"Most people are still on AT&T's basic long distance calling plan," said Ebinger. "Almost anything I would do for them would save them money."
Ebinger expects 5,000 daily visitors to the Web site and hopes to convince 5 percent of those visitors to switch to a more economical calling plan. The site has gotten over 10,000 hits since its launch. He estimates he can sell each name for approximately $20 to the big three carriers.
The way Ebinger sees it, if he can attract 10 percent of the 20 million Web surfers to his Web site, the company will reach more than $1 million in revenue in one year.
Thomas Heffner, a former Geico insurance executive and 10 percent owner of the company, is bullish on its prospects. "I invested in the company because I hold a high regard for Ebinger. He'll be able to generate enough traffic to make the idea behind the company worthwhile and he'll be able to grow the product quickly," he said.
Ebinger has met with executives from companies such as Yahoo, Mountain View, Calif., and Infoseek, Santa Clara, Calif., in an attempt to get the service packaged into one of their search engine Web sites. He said the companies are interested in the product because it will keep users on their site. Ebinger also wants to partner with content providers such as America Online and Time-Warner's Pathfinder to offer the service to their subscribers.
Simply Savings is attracting visitors to its site by participating in an advertising consortium. Each ad that Simply Savings hosts on its site allows Simply Savings to place ads on other sites to attract visitors.
According to Steve Hardiman, director of new business development for Touchstone Communications, Potomac, Md., a consulting firm that specializes in multimedia for sales and marketing, there are few Web sites on the Internet like this.
"There are not as many as there ought to be," said Hardiman.
Internet users will be seeing more Web sites that analyze data and provide comparison information for consumers and businesses, he said.
"He's working on an easy model. It's a great idea," said Hardiman.