Gratis Internet Garners #95 in Inc. Magazine's Prestigious Inc. 500 Ranking of 500 Fastest-Growing Companies in the U.S

Business Wire, Oct 26, 2004

WASHINGTON -- Gratis Internet, whose customers include AOL, BMG, Video Professor, and USA Today reported 2003 revenues of $4.9 million, 293.1% annual growth, 1,173% total growth

Washington DC-based online marketing firm Gratis Internet has been named the 95th fastest growing company in the U.S. in Inc. Magazine's prestigious 2004 Inc. 500 ranking.

The Inc. 500 ranks privately held companies according to averaged year-over-year sales growth over the past four years. With approximately 75% of all new job creation in the U.S. coming from small businesses, the Inc. 500 is a prescient indicator of the companies and industries that are driving the economy forward. Over the years, the Inc. 500 has identified the next generation of world-class companies, with Microsoft, Timberland, Oracle, Morningstar, E* Trade, Intuit, and Domino's Pizza all appearing on the list before they became industry powerhouses. The Inc. 500 special issue will appear on newsstands October 26 and will be on display until December 21.

Gratis, which assists companies such as AOL, USA Today and BMG in developing customer leads, reported 2003 revenues of $4.9 million, 293.1% annual growth over the year previous and 1,173% total growth, since its inception in 2000.

Gratis, which has nine employees and was founded by Robert Jewell and Peter Martin, operates a network of web sites -- including freeipods.com, freeflatscreens.com, freedesktoppc.com, freevideogames.com, freedvds.com, freecds.com, freegiftplanet.com, freehandbags.com and freecondoms.com -- at which visitors can accrue credit for signing up for various consumer offers, or for referring other customers. The credit is exchangeable for a wide variety of goods, free of charge and also shipped completely free. Gratis receives revenue from advertisers for each customer lead it delivers. One of Gratis' most popular sites, freeipods.com, is currently shipping out about 500 free iPods each week. Since launching freeipods.com earlier this year, Gratis has shipped more than $2 million worth of iPods to customers, all free of charge.

"We're very proud to see Gratis Internet recognized in Inc. Magazine's ranking of the fastest growing companies in America. We believe this is yet another indication of the strength of our business model and our belief that it is possible to drive revenues by giving things away," said Peter Martin, co-founder, Gratis Internet.

"Although the past year has been an outstanding one for Gratis, we can already see that this year is going to be even stronger," said Rob Jewell, co-founder, Gratis Internet. "We'd like to thank our marketing partners and everyone who has visited our web sites."

Currently, Gratis Internet has more than 10 million registered users and attracts more than 200,000 unique visitors to its web sites each day. Other key Gratis Internet customers include GM Financial Services, Video Professor, Blockbuster, Columbia House, BMG Music, Stamps.com, among many others.

To be eligible for Inc. 500, companies had to be independent and privately held through their fiscal year 2003, have had at least $200,000 in net sales in the base year 2000, and $2 million in net sales for 2003. In addition, their 2003 sales had to exceed 2002 sales. Companies are ranked on averaged year-over-year sales growth. Inc. verifies all information using tax forms and audited financial statements from certified public accountants and by conducting interviews with company officials.

"The best thing you can say about this year's crop of Inc. 500 entrepreneurs is that they didn't buy into the hype," said Inc. editor-in-chief John Koten. "When people were practically giving away funding in the late 1990s, these companies didn't overextend, and when everyone hit the panic button a few years later, they stayed calm and seized opportunity."

The companies that made this list have thrived despite continued stagnation in the economy, posting an average year-over-year sales growth of 265%. Inc. 500 companies posted aggregate 2003 revenue of $12.6 billion, and 82% of them were profitable. And while the United States shed 410,000 jobs in 2003, Inc. 500 companies provided employment for more than 70,000 people, Koten said.

For the second year in a row, Washington, D.C., is the top metropolitan area on the Inc. 500 with 29 companies, among them Gratis Internet. Boston is second, with 19 companies, followed by New York City (17), Miami (15), and Atlanta (14).

Additional information on Inc. 500 -- This year's Inc. 500 is the first to reflect the tremendous start-up costs prevalent in the late 1990s economic boom. Of the Inc. 500 founders, 36% had start-up capital of less than $20,000, compared with 48% last year--and 21% reported needing more than $300,000 to get going, compared with only 14% last year. Just 7% of Inc. 500 CEOs reported using formal venture capital to start their company, compared with 2% last year, while 62% depended entirely on private equity. Some 85% of Inc. 500 CEOs have an estimated net worth of over $1 million, with 39% pulling down an annual compensation of between $100,000 and $250,000. Also of note is that only 8% of Inc. 500 company founders are women.