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Management Strategies

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It’s All About Choice

Experian welcomes to the fold, expanding its financial services offerings.

Experian, best known as one of the big three credit scoring and analysis bureaus, is transforming itself into an all-around Web financial resource for consumers with its new offering, Experian Interactive. As part of the May launch of Interactive, Experian announced the acquisition of online mortgage lead generator for $330 million.

Whether the deal will create a threat to banks or an opportunity remains to be seen. However, given Experian's vast data resources and its credibility among consumers and businesses as a credit resource, the purchase of LowerMyBills - which also provides rate comparisons for services such as credit cards, long distance phone services, auto and health insurance, and wireless services - adds to Experian's strength in the marketplace.

According to Ed Ojdana, group president of Experian Interactive, the new service will act as a channel for consumer direct transactions over the Internet. "We're focused on large financial transactions associated with big life events, like buying a car, buying a home, saving for college," Ojdana says. "LowerMyBills brings choice to consumers who want to purchase a home or get a home equity loan. We give them a choice of lenders."

The choice goes both ways, according to Ojdana, since the service will provide its lenders with more-accurate information on potential customers. "Financial institutions need to see who the best customers are from a risk point of view, who is most likely to respond, etc.," he says.

Experian had partnered with LowerMyBills on and off for several years prior to the acquisition. Ojdana says the purchase fits with the company's strategic plan: "They bring us their expertise in how lenders work in acquiring customers." Experian says it will retain all staff and management from LowerMyBills. Matt Coffin, LowerMyBills' founder and CEO, will become president of LowerMyBills, reporting to Ojdana.

According to Ojdana, the greatest benefit to consumers from LowerMyBills will be the vast selection of lenders from which they can choose - approximately 400 companies. "We can offer a much wider choice among providers [as opposed to banks]," he says. "If you go to the Bank of America site, you'll only get Bank of America products. At LowerMyBills, you have a much better choice of lenders so you can compare and choose."

Expanding Portfolio

In addition to those features enabled by LowerMyBills, Experian Interactive combines the company's other lines of business, including Experian Consumer Direct, an online service that provides credit reports and scores; MetaReward, a program that helps Experian's credit card clients acquire new customers; and Affiliate Fuel, a pay-for-performance marketing company. The site offers a mix of paid and free services.

The move does not mark the end of Experian Interactive's expansion. Ojdana says there are plans to offer both internally developed products and those from other companies. "We have an active acquisition program," he says. "We're looking for other businesses that fit our strategy." Ojdana adds, "We also see a big opportunity for expanding outside the U.S. - our credit monitoring service has been successful in the U.K. and we think the LowerMyBills service would work there, too." The addition of LowerMyBills makes Experian the 15th largest Internet company by revenue in the U.S.

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