The GOP's dot-com fever

With GOPnet.com, the Republican Party sets its sights on AOL.


Stacey Zolt
January 29, 2000 10:00PM (UTC)

Just when you thought the dot-com explosion couldn't get any stranger, an unlikely entrepreneur is attempting to spin some of its own Silicon Valley gold: the Republican National Committee.

GOP organizers and a group of private investors are banking on GOPnet.com -- an Internet access provider and portal targeted at Republican insiders that launched earlier this month -- to help mobilize party activists and pad the party's election-year coffers.

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"Mission one for the GOP is to wire our community," said RNC Deputy Chief of Staff Larry Purpuro. "It's in our longterm survival interests to have a fully electronic connected community."

For a $19.95 annual subscription fee, Republicans can use GOPnet to make financial contributions to the party, access GOP news, create custom political calendars and send e-mail from a GOPnet.com vanity address. GOPnet also plans to offer long-distance telephone service through a deal with Qwest.

The party hopes to use GOPnet to reduce the tree-killing its communications entail and, in the process, cut costs. Purporo estimated that the party sends $27,000 worth of faxes to activists, media, campaigns and volunteers each month.

GOPnet.com is the brainchild of former GOP operative Mark Nuttle, who now runs the Oklahoma firm My eCommunity. Nuttle lined up a group of investors that, in addition to the RNC, includes several of his friends and colleagues -- like Jeff Butzke (former national political director for the National Federation of Independent Businesses and owner of Advantage, Inc.) and Dave Carney (a Republican operative and owner of Delta Strategies).

"We all know each other well. We know grassroots politics. We know the issues," Nuttle said.

Countless Internet service providers are already competing for cash and eyeballs, but GOPnet's owners believe that the service's low price and its ambition to usurp the "liberal media bias" of some larger ISPs will lure Republican Party loyalists. "The beauty of that is [that] $19.95 is a very competitive price," Butzke said.

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But even with an absurdly low-priced subscription, can the RNC compete with industry titans like AOL?

GOPnet has a significant advantage over its 800-pound gorilla competitor -- AOL must market to the mass population and contend with high customer turnover, but the RNC already has a highly targeted and loyal community. And compared to AOL's $21.95 monthly subscription fee, GOPnet is practically being offered at a fire sale price.

"It's the same question you could either launch to the New York Yankees or to David Bowie [both recently launched their own Internet services]," RNC's Purpuro added. "The simple answer is that activist Republicans are a natural born affinity group," and the targeted content on GOPnet will automatically appeal to them.

GOPnet will be marketed to Republicans on donor lists acquired through the party's state chapters. Top Republican contributors and activists will receive free access to GOPnet.

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But should a national political party -- especially at a time when campaign finance and the cozy ties between business and politicians have come under increasing scrutiny -- partake in an entrepreneurial endeavor? "Maybe it's comforting for Republicans to know that we're only profiting 10 percent," Purpuro said, defending the relationship.

The RNC is registered as a 527 organization under the tax code and can legally sell merchandise for profit, but must pay taxes on any non-contribution income. "We have spent a lot of time making sure that all of our initiatives comply with both the spirit and the letter of the law," Purpuro said.

According to Purpuro, the RNC will receive $2 from each subscription, with any remaining profits to be split between GOPnet's corporate investors. Purpuro would not reveal the RNC's investment stake in the service, but he said that the organization would also receive a cut of GOPnet's e-commerce and advertising take.

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The RNC's goal with GOPnet, Purpuro said, "is not to make money. However, in our view it is a win-win if offline Republicans can get online and donate to our party at the same time."

The launch of GOPnet also coincides with the opening of the RNC's first-ever branch office in the Silicon Valley -- where both parties are aggressively courting the support of the fast-growing technology industry. Purpuro said the RNC is expanding its commitment to "tap the technology and skill of the technology sector to improve the way we work."

"We are truly in uncharted waters, and it is a work in progress," he said.

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Stacey Zolt

Stacey Zolt is a reporter for Roll Call in Washington.

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