Elisabeth DeMarse still has her mug from Fucked Company. The CEO of the once innovative but now struggling financial website TheStreet.com says it reminds her of her days at Bankrate, when she was called in to steer the ailing personal finance company away from imminent bankruptcy in 2000—no easy task. “My first day on the job, they wrote about how pathetic this business was and how I was totally screwed,” Ms. DeMarse recalled.
Not one to accept such fatalism, Ms. DeMarse called up Philip J. Kaplan, who ran Fucked Company, the now-defunct Internet business website that chronicled moribund technology ventures dying off in the wake of the dot-com bust. Would he take down his post, she wondered? It was, she noted, bad for morale.
Mr. Kaplan sent her the mug instead.
That gesture only fueled her resolve as CEO of the floundering financial news site, which was ranked at No. 7 on the Barron’s burn-rate list, a compendium of Internet outfits that were running through cash very quickly. Ms. DeMarse wasted little time bringing the business out of the gutter, letting dozens of people go on that same first day, restructuring the Florida-based company and transforming a written-off financial news site into a vibrant enterprise.
Her style earned her the nickname “Hurricane Elisabeth.” The cultural gulf between the pushy New Yorker trained at Michael Bloomberg’s knee and the bulk of the company, which was headquartered in the Jimmy Buffett-like serenity of West Palm Beach, made for much hilarity.
“I was hired by Jeff Cunningham, the former publisher of Forbes, who was like a god to me,” said Ms. DeMarse, 59. “He had made a fortune off of CMGI stock, and he bought an actual island off of Cape Ann, where I also have a house. The island was called Crow Island and cost $6 million. He sold it in 2011 for $14 million. Both transactions were profiled in The Wall Street Journal. Anyway, Jeff hired me, tossed me the keys, and off I went. I was commuting [to] Florida. The team in Florida used to call me ‘Lovey’ and Jeff ‘Thurston Howell III,’ after Gilligan’s Island. I wore Lillys and cruisewear and Mobe pearl earrings. And Jeff Cunningham was decked out in blue blazers and deck shoes. We were a pair!”
And the pairing worked. Having fired just about everyone, Ms. DeMarse and the staff that remained whipped the company into shape and saved it from the dot-com funeral that so many of Bankrate’s peers endured.
“It’s white-knuckle stuff,” Ms. DeMarse recalled on a recent afternoon in her office in the Financial District, where her Fucked Company mug now sits beside an array of Lucite deal toys. “You want to do it fast and hard and get it over with quickly.”
Ms. DeMarse, who lives on the Upper West Side with her two children, vacations in Annisquam, Mass., where the family restored a 1725 house by the water and filled it with American impressionist art—Emile Gruppe, George Noyes, Marguerite Pearson, Aldro Hibbard. Her daughter Katie carried on a family tradition by debuting at the International Debutante Ball in 2011, and her husband Jim is a working actor who memorably played one of the “Wonder Bread” neighbors who golfs with Tony on The Sopranos.
This is an unlikely background for someone who earned a reputation as a tough-as-nails turnaround specialist thanks to her accomplishments at Bankrate. She has been using those same strategies since taking over TheStreet a little more than a year ago. The investing news and advice website, which was founded with great fanfare by Jim Cramer and Marty Peretz in 1996, has struggled to meet its potential.
“When things weren’t going how I wanted,” Ms. DeMarse remembered of her Bankrate days, “I’d throw up my feet and make a big scene and try to get people focused.” (Disclosure: Observer editor in chief Ken Kurson worked for Bankrate at the time that Ms. DeMarse became its CEO.)
Ms. DeMarse has not had to go to such extremes at TheStreet just yet, but she has been making her presence known. Last year, she let go of 100 people, and she recently “took a blowtorch” to the entire ad sales department, bringing in a new team from Forbes. She’s been working closely with Mr. Cramer to improve TheStreet’s lucrative but mishandled subscription business and has added a state-of-the-art recording studio. The company also bought The Deal from Wasserstein & Co., paying $5.8 million for the M&A magazine and moving it exclusively online.
While all of the changes have, it seems, been positive—the subscription business is flourishing, for one, and getting rid of excess baggage has eliminated $15 million in costs—some might argue that inflicting so many transformations right out of the gate could hurt morale.
At Bankrate, “people were disappointed, hostile and angry about what management had done to the business,” remembered Ned Newhouse, who worked as the company’s chief revenue officer during Ms. DeMarse’s tenure and then went on to be one of the founders of 24/7 Media. He describes how many employees were “furious” by the time Ms. DeMarse arrived, having bought into the IPO and watched it plummet to 85 cents. In Ms. DeMarse’s view, having inherited a company whose stock was battered and whose employees were demoralized, a complete revamp wasn’t just the right thing; it was the only thing—both at Bankrate and at TheStreet.
“I think that there’s always snipers left over after a restructuring, and they’re really kind of poison in the organization,” she said. But, she added, “You want to reassure the people who are left that they’re here to stay, and that as long as they’re productive, we’ll build the future together.”
Ms. DeMarse, who grew up in in Charlotte, N.C., could have gone in many directions, career-wise.
In high school, the inveterate businesswoman founded an underground newspaper, which she dubbed The Naked Truth. It took on heady issues of the day, such as the Vietnam War (against), letting girls wear pants to school (for) and serving pizza for lunch instead of mystery meat (for).
“You can imagine the scandal,” she winked.
After graduating from Wellesley College—Ms. DeMarse was a member of the Junior League and is now a member of the Cosmopolitan Club—she deferred acceptance to Harvard Business School to pursue politics, her first love. She worked as a legislative assistant for Edward I. Koch, and then in intergovernmental relations when Mr. Koch was elected mayor of New York in 1977.
But the allure of business—especially as it related to technology—pulled her in. Her first long-term position in the field was at Bloomberg LP, where she worked for a decade as chief marketing officer alongside our city’s current mayor. It was there that she absorbed Mr. Bloomberg’s business acumen and witnessed a major restructuring that gave her the knowledge to take over Bankrate—and now TheStreet—with authority.
Ms. DeMarse left Bloomberg LP in 1998 after having launched Bloomberg.com, and she decided to keep on the Internet track, despite having the chance to re-enter the political arena when Mr. Bloomberg chose to run for mayor—which came about as a direct result of her encouragement.
“I kept telling Mike that the mayor’s job was the third most important leadership position in America, after the president and the governor of California,” said Ms. DeMarse, who introduced Mr. Bloomberg to Mr. Koch. “That’s how Mike became intrigued with running for office.”
Since then, she has held a number of positions, all of which inform her decisions as she moves forward at TheStreet, a company she has watched closely since its founding.
Ms. DeMarse left Bankrate after four and a half years, having piloted the stock from near-extinction in the dot-com bust to a high of over $50 a share. With backing from Austin Ventures, she started DeMarseCo and deployed some $260 million consolidating Internet properties related to education and credit cards. She took the CEO slot at CreditCards.com, which she created by combining two of those acquisitions, and in 2010 she sold Creditcards.com to her pals at Bankrate for $146 million. Saying, “I’m not much of one for the beach,” Ms. DeMarse agreed when her friend the provocateur and innovator Michael Wolff asked her to take over as CEO of Newser. These positions have all contributed to what she’s doing now.
For instance, while at Newser, Ms. DeMarse noticed that mobile consumption of media was skyrocketing, and so she is launching a slew of new mobile products for TheStreet’s free site, for The Deal and for the subscription service. Ms. DeMarse would like to implement a free set of online tools to help people manage their portfolios and pick their stocks, and if they’re successful, to propagate them across the Internet, as she did at Bankrate. And eventually, she said, she would like to buy companies abroad, which she did as CEO of Creditcards.com. Another lesson, also learned at Mr. Bloomberg’s knee, was how to squeeze value from every dollar.
“I am the cheapest person on the planet. [At Bankrate,] I remember flipping burgers for the team in the parking lot of our Palm Beach office, at our office picnic,” Ms. DeMarse said. “Can you see me, in my Ferragamos and St. John knit, flipping burgers and dogs? For our first holiday party, we did potluck. I’m a great baker, so I made mountains of Christmas cookies and a bûche de Noël. Good times.”
Overall, Ms. DeMarse said, things are going well at TheStreet, a media operation with a limited but generally wealthy and loyal core audience of active investors.
“It’s never been a straight shot for me,” Ms. DeMarse said. “I’ve never had the opportunity to ride a real growth engine, except for Bloomberg. Since then, it’s been trying to breathe life into brands that are undermanaged.”
Ms. DeMarse came to TheStreet at the behest of Woody Marshall of Technology Crossover Ventures, a large shareholder in the company. After a little more than a year on the job, Ms. DeMarse has imbued TheStreet, which went public in the late ’90s but lost its way in the ensuing decade or so, with a fresh sense of direction.
It wasn’t easy. When Ms. DeMarse stepped in, TheStreet was mired in stagnancy, according to Bill Martin, a former Bankrate board member who bought a 12.5 percent stake in TheStreet upon Ms. DeMarse’s arrival.
Mr. Cramer, host of CNBC’s Mad Money and Squawk on the Street, told the new CEO that it was going to be “a complete mess.”
Ms. DeMarse was undeterred. “My biggest challenge at TheStreet is making sure that our work force is passionate about the markets,” Ms. DeMarse told The Observer, adding that the site had become a “snoozy read.” “We should be like ESPN. You shouldn’t work at TheStreet unless you love stocks, love the markets and know what a PEG ratio is.”
“I wanted a really big change,” she continued, “and I wanted to be in a place where I could have a nice big canvas to paint on.”
She got what she wanted. TheStreet is a diverse company with a relatively deep infrastructure. Along with its established subscription business—featuring the work of writers like Doug Kass and Mr. Cramer—TheStreet has “a big front porch,” as Ms. DeMarse put it.
The problem, she noted, was that the ur-financial news site had alienated its readers, its advertisers, its traffic partners and its work force.
“Because it was one of the original Internet companies in finance, there was an arrogance here that did not serve the actual business very well,” Ms. DeMarse said. “It was almost impossible to get anything collaborative or productive done,” which was stifling the company’s growth.
Because TheStreet—whose competitors include Seeking Alpha, Business Insider, Minyanville and StockTwits—is sui generis, it has a natural edge. Successful subscription services are notoriously difficult to build, but the basic architecture of the company hasn’t changed much since it was launched, and it’s had about 17 years to entrench itself in the field. (Subscriptions account for 85 percent of the company’s revenue, while online advertising makes up the rest.)
Still, the subscription service at TheStreet, Ms. DeMarse said, was being run inefficiently, and so she spent most of her first year streamlining the operation, among other things, before moving to fix the ad business.
Ms. DeMarse also gave Mr. Cramer, who had not been engaged in the day-to-day affairs of the business for quite some time, a leading role in editorial decision-making.
“Elisabeth does a good job and makes a lot of things work that didn’t work before,” Mr. Cramer said, noting that the company had been pigeonholed by its association with his name. “There’s a huge amount of talent there, away from me,” he added, “and she’s allowed that talent to flourish, which is a godsend.”
Indeed, by most accounts things are going quite smoothly after the initial storm of restructuring—web traffic shot up 25 percent last year—though many more changes are on their way. And while Ms. DeMarse may not have had to bring the hurricane at the outset in the way she did at Bankrate, she said it’s still within her.
“I feel a sense of urgency inside as much as I ever have,” she said. “I’m very competitive, I’m very impatient—but I’ve learned to mask it better.”
With that in mind, it’s likely that the prevailing calm is merely the eye of the storm.
CORRECTION: An earlier version of this story mischaracterized Mr. Newhouse’s perspective on Ms. DeMarse’s arrival and also described him as a “founder” of 24/7 Media, when in fact he was one of several co-founders. The Observer regrets the errors.