During the spring of 2007, while writing posts for the not-yet-released version of Research Recap, the subprime problem was just beginning to emerge as a topic for credit analysts. Credit research firms like Fitch, Moody's, S&P and CreditSights were beginning to write about it, but it would be months before it was on the radar of the mainstream business media.
Around that time, I stumbled across a website with the snarky, tongue-in-cheek name of the Mortgage Lender Implode-o-Meter. ML-Implode served as a research aggregator, spotlighting and linking out to key articles covering the emerging subprime mortgage crisis. ML-Implode also began a running count of the financial institutions which had "imploded" due to the credit crunch. When I first saw the site, I believe there were roughly fifty lenders on the list. Today there are 266 and counting.
Today's NY Times has an interesting profile on the Implode-o-meter and its founder, Aaron Krowne, who began ML-Implode as a hobby but has since quit his job and hired ten staff.
The Mortgage Lender Implode-o-Meter is a great example in how the alternative media - blogs, aggregators and social media sites - can achieve a dominant position in a profitable market niche. Mainstream business media could have easily established a foothold in covering the credit crunch, but they're just not set up to do so. The data was emerging early in 2007 (Research Recap wrote its first post on the subprime mortgage mess in April of that year) but business media are just not very good at uncovering trends. They tend to follow the herd. That creates a void which nimble sites like Implode-o-Meter and its less cleverly named peer Patrick.net can easily fill.
And if you question the influence of these sites, I can tell you from experience, when either ML-Implode or Patrick.net has linked out to one of our posts, it drives thousands of page views. While traffic both sites peaked in the fall of 2007, as awareness of the subprime problem spread, they both maintain solid traffic numbers today.
I laugh when I read articles penned by traditional media journalists claiming that bloggers simply copy others' thoughts and add no value. Sure, many blogs simply echo what's being said in the mainstream press, but the best blogs are full of original ideas. I find that's particularly true in the financial space where blogs are often written by practitioners, who have a deep understanding of esoteric topics that few business writers could match. Just read Barry Ritholtz, Paul Kedrosky or Nouriel Roubini for starters. But bloggers don't have to be practitioners to add value. Aggregation of selected content like Implode or mining of public documents, as done by Michelle Leder, can create valuable insights. And, while I'm most familiar with the financial space, I know there are similar bloggers in the scientific communities and virtually every industry.
Niche markets were once the dominion of the trade press and enthusiast publishers. Today, they're a wide-open market for blogs and alternative media.