By NYU Staff

Poring over company balance sheets was practically a hobby for Michelle Leder. A seasoned financial reporter, Leder thought she ought to get paid for her knowledge and effort to dig up quirkiest aspects of firms. In August 2003, she used this idea to launch Footnoted.org.

Her idea was simple.  Leder combed through SEC filings — financial paperwork that all public companies must compile every quarter — to find the weirdest and most notable parts of a document’s footnotes.

To be sure, these filings are publicly available. But few investors would have the time to scour through SEC filings. So Footnoted.org scoops out the best parts. And it’s done so with relative success. It’s been listed as among the top 10 business blogs by CNN, Wall Street Journal among many others.

Leder, 43, became interested in SEC filings early in her career when she wrote about a small Florida bank engaged in creative accounting during the last real estate boom. She has worked as a reporter and editor for daily newspapers in Florida, Connecticut and New York.

After Leder published her book Financial Fine Print in 2003, she launched her blog. Many of the tools were free or had minimum costs. Low cost of publishing on the internet helped Leder to register for a domain name. Soon, other journalists began paying attention to her website as evident from the testimonials and news articles about the site in various mainstream publications. “That attention helped”, she says.

She blogs from Peekskill, New York, where she lives with her husband, Scott, and dog, Kumara. And if the website is to be believed, she has trained her dog to dig through SEC filings as well. She continues with a skeletal staff of a research assistant, a marketing manager and an intern.

With 20 pageviews initially, the volume of traffic jumped to 250,000 pageviews a month. The site runs on subscription revenue, the size of which she does not disclose. Leder says ad revenue is difficult for any site with less than a million pageviews.

Smaller sites generally need time before advertisers realize they offer qualified traffic with a high end audience, she says. For Footnoted, more than 50% are from the hedge fund industry. It is unlikely that a high-end audience will click on online ads, she adds. But hopefully, in time financial niche information will be able to attract both audience and advertisers, she says.

FootnootedPro, a product of the site costs $2500 for an annual subscription. It is designed for the sophisticated individual investor or advisor. It delivers short takes on various filings, raising questions or pointing out hidden details, including new lawsuits, unusual executive changes, and questionable deals and disclosures that can be early indicators of potential problems or opportunities, according to the website. It promises to provide insight on significant trends in filings and the opportunities they represent, “that can only come from reading several hundred filings a day,” the site says. Since the website provides actionable information for investment, based on which readers can trade, it made sense to charge for such information, she says.

Providing free access to information based on SEC filings, did not make sustainable business sense. The team designs various kinds of products depending upon the kinds of filings which are event specific. They include ideas to short stocks or “long ideas” as she calls it.

Paid presentations, marketing and speaking opportunities contribute to about a third of the revenues for Footnoted. More than a third of her revenue comes from syndication arrangements with mainstream publications like New York Times’s Dealbook, AOL and the erstwhile Portfolio.

Holding a light out for emerging bloggers and aspiring entrepreneurs, Leder says that it is important for the costs to be low. She cautions that a sustainable the business model for online news and information is yet to emerge. “I was once told that even if you a small team, you have got to make your website look professional. Bloggers must understand that they need to have a compelling design and make it appear bigger than it is.”

Don’t be afraid to ask for help, she says.