Content Matters

Morningstar Acquires Footnoted.org blog

Morningstar (NASD:MORN) has acquired Footnoted.org, the blog-based financial research service that reads through footnotes of SEC filings, spotlighting the items that companies prefer investors not see.

Footnoted also posts its "worst footnote of the year" each year - for 2009, the "winner" was Chesapeake Energy (NYSE:CHK) which spent more than $12 million to purchase its CEO's antique map collection.

Last year, Footnoted introduced Footnoted Pro, a service geared towards hedge funds and institutional investors.

Congratulations to Footnoted.org founder Michelle Leder, who has tirelessly read through more filings in the past seven years than most analysts do in a lifetime. Following the acquisition, Michelle will continue to run Footnoted under its new parent.

Update: Some insights from Michelle on the acquisition, posted at Footnoted.org.

Alacra Pulse named SIIA CODiE Finalist in 3 Categories

The Software & Information Industry Association has just posted the finalists for the content division CODiE Awards and Alacra Pulse has been named a finalist in three categories:

• Best Social Media Aggregation Service
• Best Online Business Information Service
• Best Online News Service

The CODiE award winners will be selected according to the votes of SIIA members and will be announced at a special Information Industry Summit dinner to be held January 26, 2010. Finalists were selected by a panel of judges who carefully reviewed each nominated product.

The past year has been an exciting one for Alacra, having launched the free version of Alacra Pulse in the spring, followed by the professional version released this fall. In addition to the customers who have integrated Alacra Pulse inside the enterprise, Fidelity has featured Street Pulse in its just-released Stock Research Center. We have also partnered with American Lawyer Media to bring Pulse to the legal market.

In addition to Street PUlse (analyst and key blogger comments about companies), the Pulse platform now includes Deal PUlse (intelligence on M&A deals and rumours), Weak Pulse (distressed company events) and the just-introduced Chief Pulse, which features comments by corporate CEO, CFO, President, Division heads and other leaders.

Our clients tell us that Alacra Pulse is helping them address two distinct needs:

1. Idea generation: give me a reason to call my client or prospect; and
2. Current awareness: keep me from looking dumb in front of a client by not knowing key information

According to our clients, the differentiators between Pulse and traditional news & information services are:

• Curation: identification of the key blogs and news sites for trusted information
• Events: rather than every mention of a company, highlighting those events with business impact (M&A, credit downgrades, restructuring) and links to commentary from key opinion leaders
• Tagging: improved precision over keyword-based searches
• Human oversight to ensure maximum quality

We're currently working on a series of enhancements which will be rolled out shortly after the New Year. In the meantime, to learn more about Alacra Pulse, please contact our sales team or drop me a note.

John Byrne on the Future of News Media

Via Peter Kafka's MediaMemo (All Things D), comes a concise view of the state of the news media market from John Byrne, whose last day as Executive Editor of BusinessWeek is today.

And while many have weighed in on that topic, Byrne's comments carry a lot of weight. Not only has he watched the value of BusinessWeek plummet, culminating in its sale to Bloomberg for less than $5 million, Byrne has been an innovator among his peers in exploring new media and models. Among non-tech publishers, he was an early adopter and avid user of Twitter (@JohnAByrne), while overseeing the BusinessWeek.com website. Between stints at BW, he served as editor-in-chief for Fast Company. There are few "old media" journalists with a better understanding of alternative media than he.

OK, now to his comments, captured on MediaMemo:

I have three fundamental beliefs that inform my thinking:

1) Print advertising will never come back. There are just too many options for advertisers today and too much pressure on rates. Sadly, success in print will be measured in single-digit declines, forever.

2) Online advertising will never offset those declines nor save print. There’s far too much competition online and far too much available inventory; and

3) Users will not pay for content, unless they’re convinced it has immediate and tangible value. Very little journalism meets that standard today. Do we really need 57 versions of a story on Bernie Madoff pleading guilty?

Not that different from what's been written here and elsewhere, but well-said and from someone worth listening to.

Alacra Pulse Adds Twitter, Social Media apps

We’ve just added two exciting new social media features to Alacra Pulse. These new services are designed to help users track and share information that is of interest to them.

 

1.  Tweet This is a customized Twitter integration. By clicking the Tweet This button, a draft “tweet” is automatically created, including a short snippet from the specific business event. The user may edit the tweet before posting to their Twitter account.

 

Tweet This has an added twist: integration with the popular StockTwits service. If you are a StockTwits participant, your tweets will automatically be assigned the “$ticker” for the company the Pulse event is describing, so your tweet will automatically flow through to StockTwits.

 

For those unfamiliar with StockTwits, it’s a Twitter-based community of more than 70,000 users, largely active traders. To join, you can simply follow @StockTwits. There’s more information on the StockTwits page.

 

2. Share This is a plugin that allows users to automatically post stories to social media applications like Facebook or LinkedIn, as well as social bookmarking applications including Digg, Delicious, Stumble Upon and others. With a single click, users can post a story to any of more than fifty different social media applications

 

Alacra Pulse is gaining a strong following among users of business and financial information. The first application on the Pulse platform, Street Pulse, at http://pulse.alacra.com, is a completely free website that aggregates content from traditional and alternative media, identifying comments on companies by sell-side, industry and credit analysts, plus a carefully-selected group of reputable bloggers. Street Pulse answers the question “What do key opinion leaders have to say about Company X today?”

 

To stay on top of the latest business events, you may also follow Alacra Pulse on Twitter.

Spreading rumors at 140 characters $$

Buy the rumor, sell the fact

It's one of Wall Street's oldest maxims.

For traders, the idea that you can thoroughly investigate each rumor and determine which are important and which are factual, all before the price moves, is folly.So, traders trade the rumor. In bull markets, that means they buy the rumor, then sell when the news come out. In bear markets, they short the rumor, then close the position on the news.

 

Yesterday, this blog got into a bit of a kerfuffle when it reported on how web news outlets and Twitter were covering the rumor that Blockbuster (NYSE: BBI) might be preparing to file for Chapter 11 bankruptcy. That post noted that the story, which originated on Bloomberg News, was quickly picked up via Twitter, while traditional web news outlets such as Google and Yahoo trailed.

 

While my blog post was focused on how the news spread through the web, it was picked up by FT.com's Alphaville as part of a story noting how the rumor was incorrect. So, that got me thinking about rumors and Twitter, and whether the 140 character limit might cause rumors to be spread with less background information.

 

140 characters is not a large canvas. Even for the artful editor, communicating a topic in 140 characters can be a challenge. Yet one of the great things about Twitter is its ability to include links, usually in about 20 characters thank to Bit.ly or TinyURL. So, the user is typically left with 120 characters in which to communicate their message, leaving room for a link.

 

In this case, a better tweet might have been something like:

Blockbuster ($BBI) hires law firm Kirkland Ellis, explores various strategic alternatives for capital http://bit.ly/PBk4s

But traders are not editors; they pick up on rumors, act on them and sometimes, share them.

 

Now, let's look at the impact of this. We can start with the timeline of events. This is based only upon what I can see from the Internet. I'm not looking at the underlying news pipes or tick streams.

 

2:01pm Initial story posted to bloomberg.com, BBI trading at $0.79

2:06pm BBI trading at $0.37

2:07pm First tweet seen on StockTwits

2:10pm BBI trading at $0.18

2:13pm Briefing.com headline reads " following Bloomberg headline saying co hired Kirkland & Ellis for bankruptcy advice"

 

In looking at the timeline, it seems that the Twitter element was not a big factor in the sell-off. In essence, the story is that Bloomberg posted a story indicating potential adverse news for Blockbuster and the markets quickly responded, tanking the stock. From that standpoint, this is no different than thousands of other market events in the past. There's a sign of possible trouble with the stock, traders trade on that rumor, then the final news comes out.

 

I'd also question whether the final news really dispelled the rumor. Blockbuster quickly came out with a response, saying they were not filing for Chapter 11. But the reality is that they've hired a law firm to help them deal with impending capital challenges. The ultimate outcome of that may or may not be a bankruptcy filing, but it's clear that the already distressed company is liquidity-challenged in a very difficult credit environment and that they've hired Kirkland & Ellis, a bankruptcy counsel.

 

Returning to the premise of this post, though, is 140 characters appropriate for sharing information? While it has its limitations, they're no more so than those of the traditional media for spreading rumors - the telephone or the trading floor. And, while I'd encourage tweets to include a link to supporting data, the goal of the tweet is not to provide a detailed analysis of the situation but rather to give a quick alert that something is happening. Could Twitter be a tool that people could use to knowingly spread false rumors? Certainly. And that creates opportunities for sites like StockTwits and others, to define ways in which participants earn trust from the community.

 

Introducing Alacra Pulse: Where Wall Street and the Alternative Media Meet

I’m excited this morning to publicly announce the launch of Alacra Street Pulse, the product that we’ve been working on for the past 6-9 months.

Street Pulse was borne of two related trends that we’ve been following for the past 12-24 months:

1. The diminishing role of sell-side research; and
2. The rise of the professional blogger

In discussions with clients, we’ve heard that there is a strong interest in alternative media, but that there was an even greater concern about quality. Our clients were not ready to turn on a fire hose of blog content for bankers and other professionals to consume.

So, today, we introduce the Alacra Pulse Platform and its first application, Street Pulse.

Alacra Pulse finds, filters and packages web-based content that lets you quickly consume relevant, important information about a company. 

Alacra Pulse has two parts. The underlying platform reads web-based RSS feeds – from newspapers, magazine, trade publication sites and blogs – and extracts information from each article or post.  We first extract or tag entities (companies) from each piece of content and then we look for business events such as an analyst comment, a bankruptcy filing, news or rumors of an M&A transaction, or a quote by a CEO.  On top of the platform sit a series of event-specific applications, which drive current awareness, competitive intelligence and idea generation for users.

Alacra Street Pulse, our first app on the new platform, answers the question “what do key opinion leaders have to say about…” a company today? Street Pulse brings together comments by traditional analysts – sell-side, industry and credit analysts – with those of a group of hand-selected bloggers.

Alacra Pulse uses the freemium business model. There’s a free version at http://pulse.alacra.com. That version is supported by advertising plus links to contextually relevant content for purchase at the Alacra Store.

There’s also a professional version, which provides added functionality like portfolios, email alerts, information sharing features and advanced search capabilities.

In the coming months, we will launch additional event-specific applications focusing on M&A deals & rumors, distressed companies, CEO quotes and more.

I'd love to hear your feedback on Street Pulse. Please visit Street Pulse and play with the app. Let me know what you think, either in the comments below or drop me a note at barry-dot-graubart at alacra-dot-com.

Why full-text RSS matters (hint: mobile)

I've cut down on my RSS reading over the past 12-18 months. A lot of feeds that I might have read periodically, I have now dropped, replaced in part by what I see on Twitter.
But there are still around 15-20 RSS feeds that I like to read on a daily basis. I no longer read them on my desktop, however. I just don't have time. Instead, I like to read RSS feeds on my iPhone (using NetNewsWire, a great reader from Newsgator).

I read the feeds when I have dead time - on the subway, standing on line at the Indian takeout joint, etc. It lets me keep up with the info I need without being yet another distraction from getting work done. And, when I find something compelling, I can email it to myself with a couple of clicks.

That's why getting the full text of an RSS feed is so important to me. As a mobile user, I want to consume content on the mobile device and don't want to have to click through to a browser. That's why I was disappointed this morning to see that one of my favorite blogs, 24/7 Wall Street, has switched their feed to show just a snippet with a message telling me the full text is available on the website.
 
The snippet-based feeds have long been used by newspapers and that might make sense, particularly for those with content behind the pay wall. But blogs typically have full text in their feeds.

I understand the desire to monetize all your readers through your website, but for me, if it doesn't fit my workflow, I just won't read it anymore. That means that I'll miss content that I find valuable and stuff I might otherwise link to on this blog or share via Twitter or Delicious. In the long run, blogs that only provide snippets in their RSS will hurt themselves as they will lose readers and, more importantly, the buzz that comes from their content being shared to new users.

As content consumption moves to the smaller screen, more and more users will be using their smartphones as their primary means of reading information. Content providers should optimize the user experience for smartphones and other mobile devices if they want to maximize their readership.

Five Questions for Felix Salmon

To start the week for Five Questions, I've asked Felix Salmon to weigh in with his thoughts on where we are, how we got here and where we might be heading.

Felix is author of the Market Movers blog on Conde Nast Portfolio.com. He previously created the Economonitor blog for noted bear Nouriel Roubini (perhaps contributing to his acerbic wit).

A graduate of the University of Glasgow, Felix has been the United States since 1997, holding various roles with Euromoney, Bridge News and other financial news and commentary sites. Felix is also author of Ben Stein Watch, a periodic series on Market Movers, where he points out the inevitable weaknesses and fallacies in Stein's New York Times column.

Five Questions for Felix Salmon

What shoes have yet to drop? Which less obvious industries or companies might be facing troubles in 2009?

Municipal, state, and sovereign defaults.

We’ve nationalized large parts of the economy with little discussion or oversight. What do you think has been the most underreported aspects of the events of the past year?

There was definitely a wave of huge European bank nationalizations which the US press barely bothered to report because there was so much craziness here. In general, I don't think that Americans appreciate just how greatly leveraged the European financial system was compared to the banking sector in the US
-- and how that has caused global systemic risk.

With the end of the trading culture that dominated the past 20+ years, what do you think Wall Street will look like when the dust settles?

Smaller, humbler, lower-paid. And it would be nice if they got rid of all those fugly street barriers, too.

Historically, as the economy comes out of recession, it creates transformation and change. Which industries or segments might see an earlier recovery than the economy as a whole?

I suspect that the creative industries might do well -- they often do, in times of turmoil. But of course they aren't judged on the basis of profitability.

Where do you think the Dow Jones Industrial Average will close on 12/31/2009? What might the employment rate be? What will the price be for a barrel of oil?

Somewhere in the 5,000 to 12,000 range. Somewhere in the 5% to 12% range. Somewhere in the $5 to $120 range. And I might be wrong. My point is that the future is radically uncertain, and that the best way to approach it is with great humility as to just how far ahead we can usefully see.

Who's making money in online news?

With the possible exception of porn, no industry has been more impacted by the Internet than news. But while most of the focus has been on how web-based news has killed the traditional newspaper business model, less attention has been paid to how the new sites have changed the ways in which consumers consume the news.

New consumption models, combined with a seemingly endless array of sources, have resulted in a vast, highly fragmented industry, chasing limited advertising dollars.

That’s according to a new report by Lauren Rich Fine, research director for ContentNext Media. Fine recently joined ContentNext (publisher of PaidContent) after a nearly 20-year career following media and newspapers for Merrill Lynch.

In this challenging market, which sites are seeing strong traffic growth and who’s making money?

Not surprisingly, the dominant online news brands are many of the same that you’d see in the offline world. Brands like CNN, MSNBC, the New York Times and Gannett are all among the ten most visited news websites. Three online-only sites are in the top ten – Yahoo!, AOL and Google. But while the big media brands may dominate overall traffic, independent niche news and blog sites are growing rapidly and rising in importance. Fueled by the 2008 U.S. elections, sites like HuffingtonPost, Politico and RealClearPolitics.com saw their traffic at least triple this fall, surpassing that of many more well-known brands. These sites tend to differ from the more traditional media, in that they provide more opinion and commentary and typically have a defined bias, which helps users self-select the news sites they wish to read.    

The scale offered by larger organizations clearly helps in monetization. Smaller sites are dependent upon ad networks, while large sites or groups of smaller sites under a single owner can maximize CPM rates through use of a direct sales force. Yet, the study points out that smaller, focused sites can be profitable through aggressive cost management.

The report also looks at recent M&A transactions, noting that only 7 news-related acquisitions have occurred in the past 18 months, with another 14 investments. Of those seven deals, the largest was a traditional media deal, Cablevision’s acquisition of Newsday. Only two were for political commentary sites: Forbes’ acquisition of RealClearPolitics.com and Roll Call’s purchase of Capitol Advantage, suggesting some sites may have missed their peak opportunity to sell during the 2008 campaign.

On the venture investment side, two sites, Digg and the HuffingtonPost received large amounts, both 3^rd round investments. The remaining investments tended to be smaller, early round investments. According to the report, the challenge for these sites in attracting venture investments is that their upside remains modest, while capital requirements are also fairly low (obviating the need for large VC investment). That suggests that entrepreneurs seeking to build niche sites should stick with angel investors and build the business organically.

The report, Size Doesn't Matter: An Analysis of Online News and Political Sites, includes case studies and profiles of many top online news sites, and is available for purchase at the Alacra Store.

No One Trusts Your Corporate Blog

According to a new report from Forrester, only 16% of online consumers saying they trust them.
Based upon their surveys, corporate blogs rank lower than direct mail and even email from companies.

Yet, is that any surprise?  Think about the corporate blogs you've seen. Do they provide insight or just a rehash of marketing materials?

Who writes your corporate blog? Probably the marketing department.
What is your corporate blog about? Is it about your products? Yuck. Who wants to read a blog that just pitches your product?

An effective corporate blog focuses on the needs of the reader, not the marketing goals of the author. Like speaking at a conference, the goal of the corporate blog should be to convey your expertise in a given area without having to talk specifically about what you do.

The Forrester report, Time to Rethink Your Corporate Blogging Ideas, offers some examples of companies who do it well:

• Rubbermaid blogs about getting organized
• Benetton blogs to its enthusiasts, while Apple is so popular, it has independent bloggers doing a better job than the company ever could itself
• B2B companies like Sun, HP and Microsoft use blogs as a platform for their employees to communicate with customers.

The Forrester report is available for free with registration.