For many years I loved Yahoo Finance. It was one of the only sites I used every single day, and the only Yahoo property I used with any regularity at all.
Back when it launched, it was revolutionary for a business reporter, since most engines of real-time financial data are premium, expensive products none of my employers would pay for. I loved it so much, I even used to host a show on Yahoo Finance called TechTicker, now broadened to the Daily Ticker.
But increasingly, I get angry when I go to the site. The information is less-than real time, there are frequent errors, there’s no currency translations or advanced tools for companies listed overseas. The latter wasn’t that big of a deal in 1998. Now that the third largest Internet company in the world is listed in Hong Kong, it’d be a nice new feature. But Yahoo Finance seems to have no interest in new features.
Even the news aggregation by ticker is increasingly useless. Because Yahoo Finance is such a powerful tool for driving traffic, business and financial sites take the Nascar approach– wallpapering stories with dozens of ticker symbols so those stories will show up when each of those stocks are searched. As a result, you can go to GOOG on the day of Google’s earnings and find stories with little-to-nothing to do with Google’s earnings. And like a lot of Web 1.0 portals, the comments and chartrooms make YouTube’s discussions look highbrow.
A lot of this isn’t Yahoo’s fault. The real time data has to come from other sources and those sources aren’t always cooperative or quick. And given all of Yahoo’s problems, why invest in a property whose users don’t demand it? Yahoo has a golden goose on its hands. They’ve rarely had to innovate, and they still dominate the category. TechTicker was run with a highly experienced but skeleton crew, making profitability a snap and within months we had four times the audience reach of CNBC. We should all have such “awful businesses.”
But Yahoo’s gain as a corporation is increasingly my loss as a user. So from now on I’m throwing my support (read: eyeballs) behind a lesser-known Chicago-based company called YCharts in Don Quixote-like hopes that one of two things happens: Yahoo eventually gets under fire enough it fixes its product or someone else (hopefully YCharts) finally builds a great alternative for free, detailed, reliable financial information.
YCharts’ newest feature shows how the company is trying to up the game. It tracks how much a stock appreciated once you take dividends into account. Consider a stock like Procter & Gamble. If you invested $1,000 in P&G in January 1996 those shares would be worth $2,092.90 today. Any stock chart can show you that. But missing is what you make from dividends, which over 50% of companies and 80% of companies listed in the S&P 500 pay. If you reinvested your dividends, P&G would have returned 326.80% over that period, or $1,175.10 more.
YCharts excels at digging into past long-tail data that’s publicly available from a variety of sources– things like P/E ratios, R&D spending, or cash flows graphed over time. The focus is on determining what works in the markets in the long run. This doesn’t just differentiate YCharts, it’s a cheaper way to build the company. Historical data is cheaper to aggregate than real time data, so the company is starting there and will bootstrap its way into more of the real time fray once it builds and audience, says co-founder Shawn Carpenter.
YCharts has raised just $1.5 million to date, but will likely announce “something new” soon, Carpenter says. Usage is muted compared to other sites at just 350,000 monthly users, but it’s growing fast and those users not surprisingly skew towards desirable demographics like college degrees and higher incomes.
YCharts makes money from charging $40 a month for a premium service that takes their data and adds professional analysis to help investors make smarter decisions. Whether the freemium model will work remains to be seen. There are big established audiences for free financial information and for very solid financial information delivered over incredibly expensive devices like Bloomberg machines. Paying a decently high monthly amount for something in between is newer territory.
I hope it works, because YCharts– or somebody– needs to stay in business long enough to challenge Yahoo Finance. Getting anywhere close to its gargantuan user numbers is going to be tough, making building large, sustainable ad-based company a challenge. In the long run, YCharts may wind up being more powerful as part of a bigger portal than on its own.