 |
|
|
Winning Ticker: Yahoo! Takes On
Financial Exchange Content - and Major Aggregators |
|
|
|
|
|
|
|
31 January 2005 |
|
|
|
|
Yahoo's move to bypass financial market data vendors and to
source market data directly from exchange sources is more
than a move to increase the efficiency of content delivery
to consumer markets. It's also part of a wider strategy by
companies like Yahoo! to provide more originally sourced
content across the board - just as major institutions
increasingly bypass middle men to create greater content
value. For those professionally-oriented publishers and
aggregators hoping that this is just a media story, take a
look at the needs of your own institutional clients and
consider how technology-savvy companies like Yahoo! can
outscale many of your abilities to service your core
markets with original content. It's more than a ticker
that's ticking in this picture. |
|
In the
greater scheme of things Yahoo's
reported move to provide direct access
to data from financial securities exchanges is an asterisk on the bottom line of
most major financial content vendors' results. Companies such as Interactive Data
Corporation's ComStock division work hard to churn out
reasonable revenues providing exchange tickers to many of the
world's consumer financial portals but it's a tenuous business
at best. Worse yet,
unless you're supporting major investment
banks needing sub-millisecond currency on real-time trade data
for
ever more automated securities trading strategies, building stock
tickers is just not that hard a business anymore. As securities
exchanges make it ever easier to consume their content in
standard formats via XML and software providers such as HyperFeed Technologies make it easy to build ticker plants to
manage that content, exchange data becomes but one source of
important content in search of an important context to realize
its value.
But when
Yahoo!, a major destination source of consumer financial
content, decides to pull the plug on its financial market
data contracts and to get market data from the source for themselves and
for
redistribution to financially oriented portals such as Forbes,
all of a sudden the business takes on a new complexion. It's a
good move to reduce costs, to be sure, but much more than that.
Major global banks have
been moving towards direct exchange sourcing for many years,
relying on their feeds from Bloomberg, Reuters and Thomson for
application integration and backup but increasingly
sidestepping their services to get delivery of exchange data
directly on IP-based networks. So media companies now stepping
up to increased direct sourcing, especially companies like
Yahoo! that assemble much of their highly valued content
directly from the Web, are trying to create original content
value as much as any investment bank.
Shore Senior Analyst Jack McConville is
probing this move from the standpoint of the financial market
data industry in his
Financial Content and Technology Weblog (subscription
required), but there's a broader note being sounded by
Yahoo! in this move. Put
simply, the tenets of
The New Aggregation are placing traditional aggregators of
all stripes under increasingly harsh pressures from suppliers
that are stripping off key portions of their value
equation. This may look like a move designed to support
consumer portals today, but today's winning content
aggregators are the ones that aren't afraid to service content
users in whatever vein that they present themselves for
whatever mix of individual and institutional goals they need
fulfilled. Here are a few of the
winners and losers to consider as Web search and portal
intermediaries look increasingly like major content
aggregators:
- Losers: purely institutional content
vendors and aggregators. The technologies and support issues
required to support consumer portals servicing hundreds of
millions of individual users are different in scale and kind
than those revolving around relatively small audiences for institutionally oriented
content vendors, no doubt. But the scale of infrastructure, the
criticality of resolving content issues that have a scaled
effect on users and revenues are no longer so vastly
different in many ways. Don't expect a Yahoo! or Google to
displace a Thomson or Elsevier from its core constituencies
any time soon, but being willing to look at the universe of
content from the base presumption of highly efficient open
Web access is a fundamental model that's still sinking in at
many institutional content vendors today. The quality of
professional suppliers is always to be respected, but in
today's content markets, I'd have to think
seriously about the big guy focused on open content in all circumstances.
- Losers: syndicators. It's getting to be
slimmer and slimmer pickings for the likes of Yellowbrix and
the feed side of ProQuest. Many of these companies have bet
heavily on content integration tools and specialized services
for specific market niches to shore up their bottom lines,
effective moves to shore up short-term revenues. But as
more content can come into their target clients with less
intervention and with more integration required for content
sources such as weblogs and content derived from Web mining,
syndicating traditionally published content is in many ways a
losing game. It's the ability to mix content that's relevant
to specific needs from a wide variety of traditional and
non-traditional sources that provides content value today.
This formula works in consumer and corporate portals and
knowledge management systems, not to mention on the trading
desks of hedge fund managers; why should it be any different
for syndicators?
- Winners: institutions. Exchange
data is ultimately the result of market activity triggered by
the institutions that are the primary sources and clients for
this content. After years of grumbling about how market data
vendors were making them pay through the nose for looking at
their own content, technologists are making it easier than
ever for financial institutions to enjoy the fruits of their content
publishing efforts in improved transaction costs and market
services. The parallels are clear in other industries
as well, with publishers of scholarly content moving towards
disintermediation via open access publishing and libraries
learning how to become publishers as well as repositories and
distributors via Google Scholar. Ultimately Yahoo! and
Google are themselves acting as distributors of institutional
content as much as any other aggregator in this scenario. But
the utility-like pervasiveness and agnosticism of their
distribution capabilities promises to provide a level of
access to rapidly shifting content markets by major
institutions that many publishers have failed to deliver.
So although this may look like chump change to many
professionally-oriented content distributors today, it's change
that's going to add up. As many value-add revenue streams are
picked off by both their institutional clients that are
becoming better at their own aggregation capabilities and by
Web media companies open to a broad array of usage and
monetization models, today's professionally-oriented publishers
have to think long and hard about what's going to underwrite
their profits in the long run. Focusing on creating
highly valued content in highly focused contexts is key to the
remedy for many professionally-oriented publishers in this
scenario, but flexibility in thinking about content sources and
audiences is equally important for tomorrow's winning ticket -
or ticker.
-
John Blossom
To top of page
 |
