Nineteen months after spending $3 million for the Web address Loans.com, Bank of America is using the site merely to lure Internet traffic — sending its visitors straight to BankofAmerica.com.

Though Bank of America had originally leaned toward establishing Loans.com as a stand-alone business, online lending research and consumer focus groups led company officials to fold it back into the larger corporate Web site, a spokesman said.

At various times since the purchase, Loans.com had an introduction and a message saying the site was in progress. For a while it offered applications for loans. It now serves only to reroute its visitors.

“One of the things that we found was that the comfort level consumers had with a cobranded or a financial-services-branded site was much higher than with an independent site,” the spokesman said. “So instead of building out a separate unit, the decision was made to fold that effort into Bank of America.com.”

Bank of America, the country’s leading lender, bought the Loans.com name on Jan. 28, 2000, in an electronic auction.

“Loans.com will give us an additional channel to market our loans and enables us to develop new value propositions that reach millions of new individuals and small businesses,” said Ken Lewis, Bank of America’s president and chief operating officer at the time the company announced the purchase.

Companies that create new and valuable uses for the Web “will win with customers and clients,” Mr. Lewis said at the time. (He became chairman and chief executive officer last spring.)

Cathy Graeber, a senior analyst at Forrester Research in Cambridge, Mass., said that though she questioned the price Bank of America paid for Loans.com, the deal was done during the Internet’s “heyday,” when large corporations felt pressured to get the best addresses available.

“I remember at the time seeing that and thinking, ‘How in the world could that be worth three million bucks?’ ” she said.

Yet Ms. Graeber praised Bank of America’s original strategy for Loans.com. The company had said it would develop the new site as a lending marketplace, offering products from Bank of America and other lenders, she said.

“I was encouraged with the thought of a marketplace for loans brought to you by a very credible lender, which has large market share in that product category,” she said. “I think they missed an opportunity.”

Like Loans.com, the Web address Mortgage.com fetched a high price — $1.8 million — when the mortgage division of the Dutch banking giant ABN Amro bought it from the failed online lender of the same name.

But as part of the mortgage group’s Web lending unit, ABN Amro National Loan Center, Mortgage.com has a dedicated staff and marketing budget.

Though it is now just a redirect address, Loans.com was well worth $3 million, the Bank of America spokesman said.

He said 70% of the traffic from the site comes from people who type in the generic “loans.com” address, not knowing that Bank of America owns it. “So to us, getting people from Loans.com to Bank of America was worth that investment,” he said.

Ms. Graeber sounded less positive.

“If nobody’s driving awareness of that site, I don’t know how it would sustain long-term traffic,” she said. “I can understand not wanting to put the dollars behind building two brands, but it would have been interesting for Bank of America to keep with its initial market plan strategy.”

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.