Seeking Alpha surpasses 1M registered users

I spend a lot of time on this blog and on my podcast discussing new tools and services available to individual investors. Most of these firms help us make better, more accurate, investment decisions (cheaper, too).

What gets lost sometimes is how new some of these services are. While Betterment may have 10,000 funded accounts, it still has less than $30M assets under management and has been taking investor money for over a year.

Covestor and Wealthfront may be online investing’s high school seniors — around for 4 years — but they’re still looking for the big-gun approach to bring in billions under management.

Even advice-driven investment sites like FutureAdvisor (hear my interview with co-founder here) and Jemstep (interview here), are relatively new and just beginning to make their tracks with investors.

As bloggers, journos or just plain arm-chair pundits, we run the risk of mixing in the unproven firms with some of the long, hard grunt work put in by the handful of next generational financial sites that have truly “made it”.

Seeking Alpha: The “Grandaddy” of New Financial Media

So, it really means something when Seeking Alpha (FD: I used to work there and still own a small amount of shares) announced this morning that it surpassed 1MM registered users — adding another 2k every market day.

That’s a lot of users and it’s understandable when you see that global usage of the investment opinion site is ramping.

SA’s numbers are impressive:

  • 1MM registered users
  • 2k signups every market day
  • 8000 comments/month
  • 5-7MM unique visitors per month (almost 10% of which are finance professionals)
  • 250 articles published every day

So, congrats to Seeking Alpha and its founder, David Jackson. I pretty sure we’ll still be reading about SA when we talk about the next generation of financial sites.

Building a better investment site – with YCHARTS’ Shawn Carpenter


Where do you go for new, fresh investment ideas? Where do you go once you have an idea to vet it out, dig deep down into the research to validate your investment?

More and more investors are choosing to use YCHARTS. While the “chart” in the title might be misleading, the site’s research capabilities aren’t. This isn’t a place investors hear random ‘buy’ and ‘sell’ recommendations.investing site

YCHARTS is a full blown investment site that helps beginning and advanced investors alike to make better — more informed — investment decisions.

And that folks, is what Tradestreaming is all about. Join me for a conversation with YCHARTS’ co-founder/CEO and financial content veteran Shawn Carpenter to talk about his firm’s value for investors and where he plans on taking his offering in the future.

Shawn’s also been generous enough to offer a free PRO subscription ($400) to a Tradestreaming listener.  Please ‘Like’, ‘Retweet’, or ‘post to LinkedIn’ this interview and I’ll choose one person at random to receive a free 1-year subscription to YCHARTS Pro ($400). Continue reading “Building a better investment site – with YCHARTS’ Shawn Carpenter”

Tradestreaming in the European Financial Review

As Tradestreaming — and our methodology of learning from investing experts — is gaining momentum, other periodicals are taking notice.

I appeared in this quarter’s print edition of the European Financial Review. I essentially wrote about Tradestreaming — how investors are taking advantage of the new media and research tools that social media is enabling.

As regular readers would recognize, I wrote about 3 strategies that investors can employ today to begin making better investment decisions (Ride the Long Tail, Piggyback the Pros, Commune with Experts)

I also included a paragraph about what I think the future has in store for investors: Continue reading “Tradestreaming in the European Financial Review”

Radical social investing needs parallel educational framework

Interesting post by SellPuts at Hedge Accordingly about the impact of social investing.  Investors have seen an onslaught of new financial startups, research platforms, and tools to share all this.

But, nothing tries new investing tools and strategies like big movements drops in the stock market.

The article discusses the radical impact of social investing on retail investors, using an car metaphor (beware, money quote): Continue reading “Radical social investing needs parallel educational framework”

Another way to trade the (AP) news

RavenPack provides analytical tools for financial firms to help make sense of the news.  One of my 5 companies investment professionals should know, this firm is quickly rolling out different product offerings.  Already providing something similar for Dow Jones’ content library, RavenPack announced a partnership today with the Associated Press.

According to the news:

AP and RavenPack will develop a series of products, the first of which is scheduled to launch in the first half of 2011. The products will process AP content with sentiment analysis techniques to produce metrics than can be consumed by quantitative models and trading programs. As a result, computers reading signals from the news can create trading transactions or alert traders to specific events.

There seems to be continued focus and activity around finding technology solutions to quantify news flow.  RavenPack primarily uses sentiment analysis.  Recorded Future provides a temporal analytics engine in an attempt to handicap future events based on chatter while SENSENews approaches this problem by scouring the web to semantically filter fundamental information.


The Associated Press and RavenPack team up to create suite of new analytics products (BusinessWire)

The future of financial content, social media and investing (transcript)

tradestream radio, discussing investing and technology

This transcript is of a conversation I had with Mick Weinstein (listen to the podcast), previously the Editor in Chief of Seeking Alpha and presently the head of content at Covestor.

Miller:   Hi! I’m Zack Miller, author of the recent book TradeStream Your Way to Profits: Building a Killer Portfolio in the Age of Social Media, and you’re listening to Tradestreaming Radio, our home in the internet radio space. This is our place to discuss how technology is helping investors to become better, smarter, and more accurate at what they do.

You can find this podcast on iTunes. You can also find lots of other material relating to this podcast, as well as archives of our programs at my website There’s lots of other great content there as well, and I recommend you check it out.

Today’s podcast includes a conversation with Mick Weinstein, I worked with Mick when I was at Seeking Alpha. Mick headed up their content initiative. He was the editor in chief, and managed the entire editorial staff. Mick recently joined Covestor, another company I write about in my book, TradeStream Your Way to Profits.

Covestor is an eBay of investment services of sorts. Investors can go there, open an account there, transfer money over, and then with the click of a button, allocate those funds to new and old aspiring investment advisors. So, it’s a transparent platform, investors can see exactly what they own at any given time, fees are transparent. Just like you would go to Schwab or to Fidelity to find a mutual fund, Covestor provides that level of service for the investment advisory industry.

We’ll just jump into the podcast, and we’ll take it from there.

I’m here with Mick Weinstein. Mick Weinstein is currently the head of content as Covestor, which I will let him tell you about. I’ve known Mick for years, Mick and I have worked together at Seeking Alpha, where Mick ran content as well, and managed the entire editorial process and team. I’d like Mick to introduce himself, and we’ll take it from there.

Weinstein: Thanks Zack, thanks for having me on the podcast. Before joining up at Seeking Alpha, in the early days of Seeking Alpha, I was working in online content. Sort of became active online as broadband was exploding, and things were getting really exciting for online content and access to it. The advent of the blog and the democratization of content creation, and broad distribution was already happening. I worked in both the business sphere and the non-profit sphere with online content.

And then I ran into my old friend David Jackson in, I think it was the summer of 2005. David was starting up this new company called Seeking Alpha, and he had a terrific vision of where it could go, and new possibilities in financial publishing. Built primarily around this new voice that was emerging of the individual, knowledgeable blogger about the market. And, it was very exciting opportunity, and David asked me to join up at that stage, and build up an editorial team.

Was it an issue that you didn’t have a traditional sort of investment/finance background?

Weinstein: I was always passionate about the market in sort of a individual investor sort of way. At that point, the way we saw it, it was more important to have editorial skills, strong communication skills, a strong vision of where things could go with this particular product, it was more important than knowledge of institutional investing and the like. There was a bit of a ramp up in knowledge that was required of me at that point.

It actually could have been and advantage, coming sort of with a different point of view.

Weinstein: Perhaps, yeah. It was, for me, a fascinating period of learning a new field, the institutional investor, the hedge funds crowd. I enjoyed that very much, and this was even before things got really interesting in 2007-2008.

Can you talk about the editorial process that Seeking Alpha used? How you built the content base, how you helped promote outside content? I think that’s kind of interesting.

Weinstein: Sure. Essentially at the beginning we were reaching out to some of the best financial bloggers out there, and inviting them to join up on the platform. David already had some relationships, and I built some relationships at that point with some of the early financial bloggers. I am thinking Roger Nusbaum was on board at that point, and some of the others who remain in the financial blogosphere remain active, and remain very popular.

We reached out and said what is happening, essentially, right now is that there is a lot of terrific writing from extremely knowledgeable people with real domain expertise that far exceeds, in many cases, what we can find on even the Wall Street Journal and Bloomberg reporters, because of the nature of their beat. But the problem is that no one knows about you, and you know that.

Financial bloggers’ perspective, in many cases, was very frustrating, they were doing terrific write ups on whatever the topic of the day was. They were writing because they wanted to write. They were writing because they were passionate about it, not because they had to file today. The content was coming from a really compelling viewpoint.

And they were putting their money behind some of these ideas, right?

Weinstein: In many cases, in many cases. Every aspect of it was compelling from a reader’s perspective. But the distribution just wasn’t there, and part of the problem with the distribution was that the filtering wasn’t there. No one would want to distribute it before strong filtering was in place to ensure quality and to ensure the ability to sort of follow up with the writer if an issue were to occur; quality in terms of the core production and quality in terms of the copy editing, tagging, headlines, the whole package.

We would reach out to the best bloggers at that point, and sort of hand pick them, and invite them to join up. Essentially, it formed a partnership around distribution of their content, and it worked remarkably well, with very rare exception, everyone was excited to join up with this new project that costs them nothing in terms of new work, but was all upside in terms of distribution.

In many cases, we were talking about a fund manager, let’s say, who was writing primarily either because they found it very interesting just to get their ideas out there and to get feedback from the community in comments and the like, or to market their business, and to get their name out there, to get their firm out there, to get their asset management services out there. Increased distribution was what they were interested in, exposure, and not so much to be compensated directly for their writing. It was a good arrangement all around.

You had hired and managed an internal, human team of editors to help sort of- this is the next stage of the process, you’ve identified that manager, that blogger, can you talk about what would happen at that point, once he’s written an article?

Weinstein: Sure. At the beginning it was just me taking these articles that were coming in, and there weren’t that many at the beginning, so it was something that I could handle on my own. But to scale things, and when things started really to flow, and when we started to get incoming requests to be on the platform, as opposed to our outgoing requests, we needed to scale editorially. So I began hiring editors with backgrounds more or less like my own, which is not financial expertise, but rather strong editorial abilities, web native types who had been blogging, were comfortable with content management systems, strong communication abilities, and could learn finance.

I always preferred hiring someone who was a lover of language, and enjoyed working in an editorial capacity who could learn finance and investing. I much preferred that approach to someone who had worked in finance/investing, but wasn’t strong editorially. I think you can teach finance and investing to a strong editor, but I don’t want to be teaching strong writing skills and editorial skills to someone who’s been working in finance and doesn’t have them already by the time they’re in their late 20’s or early 30’s. let’s say.

I think that helped, at least from my perspective, and part of what made Seeking Alpha so fresh was that the content was different than what else was out there. It was not dry, it wasn’t sort of onerous in the sense of just being written in a very sort of academic tone. It was very accessible.

Weinstein: Yeah right, like I said before, what was exciting about working with this content was, and continues to be I think you see on Seeking Alpha, people write because they want to, they write because they know about the field. If they have two things to say today, they write two blog posts, if they have nothing they write nothing. Everything, therefore, tends to lean towards quality. It’s a voice that you want to hear if you are active in the market yourself.

So, was a fresh voice, and that was broadly recognized, I think, from the mainstream media outlets also, that were lacking that at that point. And in many cases, still struggle with that. The voice from nowhere of the objective reporter is only so interesting when you talk about stocks and investing. At very least, to compliment that, the voice of the investor, talking from an informed, skin in the game perspective goes a long way.

You just got me thinking, so last podcast, I spoke with Nikesh Desai, whom I think you know. He used to run business development at . Obviously, has been taking outside content, third party content for years, certainly before Seeking Alpha was. But Seeking Alpha somehow sort of perfected that model and sort of ran away with the third party aggregated content model. Any reason why you think Seeking Alpha had a leg up in that race against TheStreet?

Weinstein: Not necessarily, I think TheStreet and MarketWatch, which were both pioneers in the late ‘90s in bringing financial content online, just didn’t get what it meant with the explosion of terrific content from individual bloggers and other types of content that became available outside of traditional journalistic frameworks. They were just late to respond to that.

And there is no reason why I think they could not have done it also. But I think David just saw sort of saw it earlier because he was in it, he was a blogger himself, and took the initiative and ran with it. I think what you find is that traditional media outlets, whether it’s an internet company, a net native company like the TheStreet or MarketWatch, or a company that has its roots in traditional print like the Wall Street Journal, Reuters, etc., companies get entrenched in their own way of doing things.

They have teams on board that they’ve built out that work within particular frameworks. They think of creating new content, they don’t think of changing that basic framework. And you still see it, the difficulties that traditional mainstream media outlets, even though the want, even though the are in principle committed to working in an online environment, it takes a long time and a culture change to think about content coming from someone who was previously a source, actually that being the source of the content that you publish and not just as a one off, but as a fundamental change to the business model, doesn’t happen so quickly, and I think they kind of  missed it on that.

So it’s natural, but I think that’s the nature of start ups. A start up can come up with a whole fresh approach, that any people onboard…

Sort of freed from the organizational constraints?

Weinstein: Exactly. That’s what occurred here, and as there’s greater recognition of the value of the blogger content, it’s interesting to see how the traditional mainstream media outlets are dealing with that. Whether it’s curating links from strong voices out there on the web, or in some cases hiring some of those bloggers to come on board and become part of their large organization, which is an exciting avenue for a financial blogger, for example who wants as a career move to become a writer, as opposed to sort of augment their money management business, or other profile like that.

Can you talk about volume? How many posts you were posting per day by the time you left?

Weinstein: Yeah. By the time I left last spring, we were north of 200 posts per day. I just looked yesterday that Seeking Alpha and Business Insider are both- Business Insider now is close to what Seeking Alpha’s output is. I thought that was interesting. They’ve really ramped up their volume there. That’s the nature of the business if you’re in that. The free content, ad-supported model, so for better or for worse, you need to have few things, and one of them is high volume.

We knew that early on at Seeking Alpha, that we needed to ramp up the contributor base. We were over 3,000 contributors over the lifetime of Seeking Alpha at the time I left, in terms of active contributors also, hundreds of active contributors; a large editorial team handling that, 15-17 editors. It was a big operation, and it had to for it to be a scalable web business in that model.

It’s funny that you say it had to be a large operation to be scalable, but that’s true. People have been writing about that. The great internet companies that are coming out that are actually pre-public at this point, they are investing a lot in infrastructure. It’s not that they are just a team of five guys being able to generate lots of money, it actually requires an increasing amount of investment, right?

Weinstein: Absolutely. I mean on the one hand, there’s misunderstanding about that, that it doesn’t cost as much to build an internet business as it once did, that’s true. But it’s still substantial, and we’re not talking about four or five people. To build a content business that reaches a certain scale, you need the sort of numbers at least that we had at Seeking Alpha.

On the other hand, when you compare it to the larger publishers, and with the traditional newspaper, and the mainstream publications, their overhead, there’s nothing to compare. If you build out the company carefully, a blogging model like the Seeking Alpha model or the Business Insider model, you still have a relatively small team, but you’re talking, editorially, still in the 15-20 people. If you want to reach the sort of numbers that turn into an interesting business.

So before we leave Seeking Alpha, and start talking about what you’re working on now, you touched on this before, can you talk a little bit more about why financial bloggers are blogging? And how they are using Seeking Alpha personally and professionally?

Weinstein: Sure, there are a few different profiles of the financial blogger, I think. In the Seeking Alpha universe, I’d say the largest profile is the money manager or financial professional in some capacity, could be a portfolio manager, could be an RIA, who is writing because they are looking for distribution of their ideas and their name, and ultimately for new client leads. That’s one profile.

Another big profile at Seeking Alpha is just the passionate individual investor who enjoys the process of writing up their ideas around the stocks they own, or it could also be macro ideas. Someone who is smart, writes well, and just enjoys that process, and is in it more for the community aspect. That is, for the thrill of writing something that you invest in, and then to get feedback from people.

It is a real thrill, and it can be addictive. I’ve experienced it myself. It’s a lot of fun to get feedback from people after you’ve put a lot of thought and effort into a piece. And getting that feedback, knowing that you have many people reading it, responding to it, who can follow up on, smart people who improve your thinking through their feedback, and the community around that. So that’s the second profile right there.

Are those types of people looking to make money? Do they have a day job, are they doing something different with their lives? Is it more of a hobby?

Weinstein: Yeah, for the most. I think they are looking to make money, but also just enjoy the process, and enjoy the discussion that happens, just like talking stocks, like sharing ideas around it. Like expressing themselves and hearing what others think about that.

And you started to say there was a third type?

Weinstein: Yeah, there are other profiles. There’s the professional, mainstream media or otherwise, the professional writer, who we were also taking on at Seeking Alpha. Who writes for, whether it’s a CNET, or someone like Felix Salmon, who was at Portfolio, and moved over to Reuters. And we had other deals in place with professional writers, we would carry tech crunch content.

These are people with domain expertise, who are writing as their profession. In that case, it made sense as a biz dev relationship for both sides, for their distribution and for us to have rich content like that. But didn’t really fall into either of those two profiles, so I just grabbed a…

I’ve seen recently that Seeking Alpha, from a monetization point of view, has moved into this sort of online app store, which I was writing about a year ago, and I mentioned in my book. I know it’s early days, and they’re doing some interesting things there. I have certainly heard from app developers that they are banking a lot on the success of this type of platform. StockTwits also launched a story recently.

Do you see that as an extension of sort of content, or is that just way for these companies to monetizes their content? Or is it just another vehicle for content just delivered via an app?

Weinstein: I think it’s really interesting. I think what’s happening is content start ups hit a certain ceiling, in terms of where the scaling becomes difficult to continue. That is, at a certain point in terms of your own team, and in terms of the content you’re bringing in, and in terms of the distribution you’re getting, and the visitors and the page views, things start to kind of maximum let’s say.

Like is it based on page view models?

Weinstein: It’s all about page views and selling those page views for the best rate you can on a CPM basis. So, you can have a terrific sales team in place, but at a certain point there’s only so much you can do in terms of your own output, without getting really annoying to the user with the more and more sort of hypey headlines.

Or splitting up pages and multiple-

Weinstein: Splitting up pages, and at a certain point, there are diminishing returns on that too. The users just get upset and leave. You can keep trying it, and you can do the, what’s it called at the Business Insider all the time? The slideshows. Like, “Ten ways to do…” this and that. You can try to branch out into the birds dying in the sky and falling and saying well, that’s still somehow business news.

But there’s still only so much you can do to grow your page views, without hitting the user in a way that undermines that growth. What do you do then, as a business? You can only drive the CPM so high, where does your growth come from at that point? You can launch new verticals, you can do conferences, sort of the tech crunch model, take the brand to the real world.


Weinstein: You can do jobs, there’s not a whole lot of money there. Another approach is to try to sell products on the site, essentially, and to create a platform. I think it’s really interesting. I think any effort to create a second revenue stream for a content, ad-based revenue model for a content business is interesting. Everyone is struggling to find one that works, and that really can produce real growth, that is interesting from the companies’ perspective and from a venture capitalist perspective.

The Seeking Alpha app store is a really interesting development, and I don’t know how it’s working out for them, but StockTwits also is taking that approach. Platform also has it’s attractive upside, you could say it’s a natural extension of the basic content model also, which is platform based.

But does it work to sell content on your closed platform, in the Facebook model?

The Apple model, yeah.

Weinstein: Yeah, in the Apple model, if you’re not Facebook or Apple? If you don’t have that massive user base that just loves being on your site or with your products, is it going to work to sell content on your platform? I think that’s the big question for Seeking Alpha, and maybe also for StockTwits, I don’t know.

That’s a great point, and I think that’s also a great segue into talking about what you are doing now. I know years ago there was talk that some of these next generation investment platforms, like a Covestor, or a KaChing, which is now called Wealthfront, would sort of be that revenue model for the financial blogger, right? If these models allow any content producer, theoretically, to put up a portfolio, put some real money behind it and have people invest along side this person, with audited results and basically to create a new model for punditry basically. No longer is a writer just a writer, you actually have performance metrics attached to it, and people can invest along side this person.

I don’t think it ever panned out that way, I don’t think that Covestor necessarily turned into the revenue model for the financial blogger. I think it’s a stand alone business that’s interesting in and of itself. Can you talk about Covestor, and what you are working on now, and where Covestor is headed?

Weinstein: Sure. I was really thrilled to join up with the Covestor team, it’s obviously a bit of a jump for me from a publisher to an investment management company. But I remember when Covestor launched, the excitement around it. The idea of using the internet as a means to empower individuals to both express themselves and to attract customers in however that’s defined, in new and novel business channels is what Covestor is doing. What’s happening in many other spheres in terms of people being able to express themselves, whether it’s just through the writing, or through their products, and to find access to customers around the world, who they wouldn’t otherwise have access to. And, thereby pushing aside some of the large initial players in the field. That’s very exciting to me, generally, online.

And that’s what Covestor is doing in investment management. The ability to share your own portfolio in a verified manner. I know that the person really holds those stocks, and show the track record in a verified manner. My ability, if I am interested in active investing, that is I am interested in not just following an index or following the general market, but either for a portion of my portfolio or my entire portfolio, active management, to have access to a whole marketplace of managers who are competing for my business, rather than just some un-named, faceless mutual fund or other vehicle, is compelling, I think. That’s what Covestor offers.

At this point, what I’m doing is working with a team there, a terrific team out of London and New York to build not just from the existing product, which is solid and works well, but to develop content around the managers, and around the service that will both express better the managers’ unique portfolio, strategies, and the like, and their own backgrounds, and also create compelling content around their trading, around their portfolios, that some one who is just interested in that aspect of it can access the platform.

That’s a really interesting jump to go from, to truly have achieved sort of an expertise in financial content, to go from a publisher to actually the investment side. Can you talk about that transition, and about the nature of content changes if it’s used to deliver page views, or it’s actually used as the opening of a sales funnel?

Weinstein: Sure. As a publisher, when working the publishing framework, you always sort of have your mind on creating compelling content for an end user, but also on the business end of things for the company, which is about volume, page views, and providing inventory for the sales team. Quality inventory is sort of the bottom line.

The aspect, the first part of that, which is creating compelling content for the end user, is applicable anywhere. It’s very much what I am taking with me to Covestor. We must produce, regardless of the web framework you are working in, if you are working in online content, you have to produce something that has real tangible value to people on a regular basis, that really meets their needs. And there’s no room for mediocrity really, in that regard.

Any interesting business that you are going to build on top of that, whether it’s a publishing business that’s ad-supported, or an investment management business that’s using content as part of its overall strategy. There’s no sacrificing the quality around that content. You really need to understand who the end user is, and you really need to provide that daily, quality, and direct.

That challenge is present here at Covestor, just as it was at Seeking Alpha. That said, obviously I am part of an investment management firm here, which has regulatory considerations. I am still learning all of the aspects of that. Things that you can say-

You wouldn’t wish that on your enemies, right?

Weinstein: A lot of it makes sense, and is out to protect people for all the right reasons. Other parts I am trying to understand exactly how to work within the framework in a way that both meets compliance, and is genuinely interesting and informative really, to a end user without getting too cumbersome.

The quality, the focus on quality content is very much still there. It’s just a question of what you are expressing. We have a lot of outstanding money managers on the platform at Covestor. They’re writing terrific stuff in many cases, and their activity is very interesting. This is what we’re trying to amplify through our content on the platform. And in that regard, it’s not that different from what I was doing at Seeking Alpha, in working with a relatively large body of content producers to express better, and more broadly, how they see the market, and how that effects their own investing.

The main difference is, being the platform itself, you are able to track the conversion rate and the lead generation in a way that you are handing that off to a third party manager, who is writing for Seeking Alpha, right? Now you actually have soup to nuts right? The whole process, from a track-ability or an analytics point of view, you have the whole exchange, which I think is kind of interesting.

Weinstein: Yeah, that is.

Do you think that the rise of Covestor, and the success of Covestor- obviously it’s still early days- that we are seeing a new form of financial startup, meaning moving away from the MarketWatches and the Seeking Alphas, which were purely content exchanges in some way, and moving more into a transactional type of platforms? I can think of Betterment, I can think of AlphaClone, sites that use content, but actually have some type of mechanism to either actually manage money, or there’s some transaction going on at the end point. Do you think we’ve reached that stage now, that maturity in the start up field?

Weinstein: I think they’ll coexist. I think content consumers will continue to want different things in their daily reading. They will want sources that are purely exchange of ideas based, whether it’s a blogger who is independent, or a Wall Street Journal, or Seeking Alpha that is a publisher. It’s understood that it’s a place where you come to hear ideas, and exchange ideas, but there is no incentive on the part of the publisher other than attracting your eyeballs, and selling that to advertisers. There’s no financial incentive, there’s no interest in presenting product to you in terms of investment.

Then there will be investment advisors and platforms like Covestor, which are quite clearly with a different product at the end that is right for some consumers. And the content that you consume may or may not draw you to purchase the product or to become a client of the service, but the content itself may still be compelling to you, and your awareness of that service grows as a result.

I think the two will co-exist. I don’t think the investment management content producers will have the resources, or will be interested in all the business aspects of creating the idea exchange that you find on the publishing end. I don’t think that the publishers can produce the investment management products and deal with all of the regulatory aspects of that, and the product and operation aspects of that which are necessary for operation. I think that will coexist.

That leads to my last question, I always though of the holy grail as the merger between those two. If you could find somebody who was really good at creating objectified, agenda-less, or agenda-free content and combining that with an actual transactional platform, that somehow that would be the best of both worlds.

And there have been some attempts, some of the newer start up brokerages tried to use content and provide a pathway through the content to actually transact off of it. None of which has really resulted in moving the needle much. Maybe what you are saying is that those two things actually have to be separate.

Weinstein: Yeah, I am not convinced,-I think it would be interesting to see such a combination. In some ways, I am skeptical that it is the future for financial content. We once had the Chinese wall between editorial and sales, in that you  see publishers online. I can tell you all inline financial editors are influenced by aspects of sales and advertising; some more than others.

That may have therefore- not fallen- but it’s a good wall to have in place. It’s important for the integrity of the publisher. I wonder if a financial publisher who was answering not just to an ad sales team, but to an asset management team could move ahead in the way editorially you need to make things interesting for an end user with that intention. If the tend user would be interested ultimately in that tension built into the model. I’m not convinced.

Mick, this has been really, really great. It’s been great talking shop with you, and I appreciate your time and wish you the best of luck at Covestor.

Weinstein: Thanks a lot, Zack.

So that was Mick Weinstein talking about financial content, both in a publishing model and in a purely financial model, using content actually to create lead generation for financial advisory services. I hope that was interesting.

Again, you can check out this podcast on my blog at , we are also at iTunes, look for us again soon, thanks for joining us.

More Resources

Learn more about Covestor and Mick Weinstein

The future of financial content, social media and investing (podcast)

tradestream radio, discussing investing and technology

In this week’s podcast, we interview Mick Weinstein, head of content at Covestor, a new investment platform that allows investors to shop for investment advisor like shopping for Pez on eBay. Mick was previously editor-in-chief at Seeking Alpha.

I’ve discussed Covestor and its do-it-yourself model at length both in my book, Tradestream, as well as on my blog.  Just as we’ve become accustomed to shop for mutual funds within a supermarket model, it’s been harder to do that within the investment advisory business.  Covestor and its competitor, Wealthfront, are changing all that.  And financial content will play a key role in the success of these types of firms.

Mick sits right at the edge of what’s happening in financial content and now brings his perspective to Covestor.  He’s working with the team there to build out its content platform beyond the transactional infrastructure the firm has invested in building.

We discuss:

  • how financial content is being used for lead generation in the finance field
  • Mick’s experience building and managing Seeking Alpha’s offering and content team
  • tips to building a successful financial content business
  • the compliance challenges for financial content when published by an investment firm
  • the future of investing

More resources

Learn more about Covestor and Mick Weinstein

Output volume and velocity trending up at top investment sites

From Mick:

High volume biz publishers: @businessinsider is averaging 1015 posts/week and @seekingalpha 1033 (Google Reader stats for last 30 days)

That’s amazing — not only in sheer volume but in breadth.  Admittedly, a lot of what’s going up is crap and some of it has nothing to do with business/investing (I’m thinking BusinessInsider’s gratuitous slideshows).  It’s a deluge of content.

There is definitely something in the long tail of financial content for everyone.  There is absolutely no excuse anymore for investors not to better themselves or pick better investment/financial advisors to represent them.

Tradestreaming Radio #3: Monetizing financial content, benchmarking 2.0

tradestream radio, discussing investing and technology

The latest edition of Tradestreaming radio is out and it’s a good one. You’re not going to want to miss

  • an in-depth interview with leading financial ad network Investing Channel‘s founder/CEO, Nikesh Desai
    • Nikesh shares his view on where the industry stands today and where it’s headed
    • we discuss strategies on how to better monetize financial content
    • new online business models for financial content
  • next up is an interview with CEO, Dirk Quayle on why it’s so important for investors to properly benchmark their performance
    • the evolution to a distributed set of independent tools to add a layer of performance transparency on the financial blogosphere
    • the need for customized benchmarking tailored to individual portfolios by position
    • how Morningstar needs its own watchdog overseeing the ratings firm

Of course, you can also subscribe to listen to our podcasts with your iPod/iPhone via iTunes here.

Check it out and let us know what you think.


Live from the internet, it’s Tradestreaming Radio, with your host,’s own, Zack Miller.


Miller: Hey! This is Zack Miller. I’m the author of TradeStream Your Way to Profits: Building a Killer Portfolio in the Age of Social Media.

This is Tradestreaming Radio. It’s our home in cyberspace. This is the place where we discuss everything about the convergence between technology and investing, hopefully helping you to make better, more informed investment decisions. You can find old, archived editions of our radio program at, and also on iTunes.

I’m glad you joined us. We’ve got a great show lined up today.

First up on today’s show is a conversation I had recently on a stop over in New York with Nikesh Desai. Nikesh is the CEO and founder of Investing Channel, it’s an ad network for financial sites. What that means for those of you who are uninitiated with ad networks, they’re basically a marketplace. They are representing publishers, people who publish content on the websites to help sell ad space on their websites, as well as representing advertisers who are looking to target financial customers. They’re buying traffic basically on websites as well. They’re the middle man, they’re the broker, and that’s what they get paid for.

It’s a really interesting space for me, because Nikesh sort of sees ongoing trends in financial content, where things are headed, how content is being monetized, new business models. He sort of has a front row seat into what’s occurring on the internet.

I interviewed Nikesh as part of an interview included in my book TradeStream. I recently had a chance to sit with him for about an hour to catch up. The majority of that conservation will be included here.

Desai: … come from investment banking, doing internet corporate finance, M & A, then kind of trying my hand at operations at a few internet companies like People PC.

Miller: Then you moved to The Street?

Desai: Yeah, after People PC I moved to The Street to run business development there.

Miller: What did that entail? Was that- deal making?

Desai: Yeah, it was basically deal-making.

Miller: Content syndication?

Desai: A lot of it was content syndication, distribution of their subscription product, how to enhance ad revenue beyond traffic, what are other different content we can bring into the site. In fact, some of the early discussions I had with their editors- I was one of the few people that had feet on The Street.

Miller: Right.

Desai: Everyone else was kind of internal, or ad sales.

Miller: Right.

Desai: But I was the only one kind of talking to other-

Miller: In a financial content company biz dev is a really core competency, because you are the only person who is sort of the in the real world.

Desai: Right. Right. You know that well. It was pretty evident that a lot of people wanted to just some notoriety, content-wise, that they were willing to give content to The Street for free. So, it was tough to get over the hump with our editors to kind of take any content that they didn’t vet out fully, which is understandable, the point being that they were paying, and still are paying, so are a lot of other editorial companies pay quite a bit of money. You know from Seeking Alpha that you don’t have to.

Miller: Right.

Desai: It was pretty clear. That was 2004, I think it was. There was an opportunity to kind of figure out something editorially, and with the free model, but I didn’t get the time- there was just a lot of “internal stuff” that was going on.

Miller: There’s always that editorial tension, right? Like if you’re a real editorial driven company content is seen as core. That’s hard to say, “We’re going to bring that in from outside sources,” really. Right?

Desai: Yeah, although it wasn’t too far from what they already do. They have plenty of contributors, not employee folks. I think the idea of a controlled environment of 50 contributors versus 1,000 contributors was daunting. It needed to be kind of streamlined obviously. That’s what I think Seeking Alpha did really well.

It was just interesting to see it kind of, at somewhat an early stage, but see that clash, like you said, of just editorial kind of- control, is maybe the word, versus the business kind of understanding. I feel like whereas, “Geez, if I just added 100 more articles a day with the distribution I created, that could double our traffic in 90 days,” right?

But, understandably you’ve got to be able to- The Street has a brand. Any media company has a brand, an editorial brand that they need to maintain. I don’t know if you’d say the same for Seeking Alpha, but I would say they don’t really need to maintain an editorial brand, per se, but more how they- they’ve got to control the content within limits. You know? And let the audience kind of pick and choose what they enjoy reading.

Miller: I mean truly any financial brand, part of their job is to point people to what they think is interesting. Right?

Desai: Yeah.

Miller: And high quality.

Desai: Yeah. I guess-

Miller: In some sense The Wall Street Journal does that.

Desai: Right.

Miller: And, that’s what they told us. I wrote about this in the book, they felt that was their mission in traditional journalism.

Desai: Right.

Miller: They saw Seeking Alpha as sort of taking that same role in the blogosphere.

Desai: Right. Yeah. Yeah.

Miller: I guess curating, filtering, whatever you want to call it.

Desai: Yeah. I guess what I mean is there’s less- look, if Seeking Alpha puts up a bunch of whatever-

Miller: Yeah. It doesn’t really harm them.

Desai: It doesn’t really harm Seeking Alpha’s brand. I mean The Street puts out a story on a public company that just was scathing or wrong, they’re in deep stuff.

Miller: That’s true.

Desai: I guess that’s kind of where I see that. But clearly I think, I’m biased in saying this to a certain extent, because I deal in the long tail, as much as Seeking Alpha does, in a very different way. But I feel in finance you might, and I’m a self-directed investor, maybe not a financial advisor, I might go to some of the larger media portals, or companies to do some topical research, but I’m really going to niche sites and individuals that I follow, because they’re well-known in real estate investing, or quant [assumed spelling] trading.

Miller: Right.

Desai: These are 50,000 page view blogs.

Miller: Right.

Desai: It may be at best 1 million or 2 million page view blogs.

Miller: Really long-tailed type stuff.

Desai: Yeah, but those are where a lot of the real investment decisions are being made I feel like. I think that kind of engagement is what Seeking Alpha has been able to get, like you said earlier, with dealing with that kind of niche content, and really valuable audiences. Not that the mom and pop retail one isn’t valuable, but these are more kind of high-net/financial professional folks that define a lot of what our network is.

Miller: Sure.

Desai: And I imagine Seeking Alpha, but slivers of the other larger media portals, not the majority of it.

Miller: So you left The Street in what year?

Desai: I left The Street like early ’03.

Miller: Then you started Giant Step?

Desai: Then I started Giant Step Strategies. It was basically kind of a revenue strategies advisory company, where we were helping FT, Investor Place, IBD, Schaeffer’s Research, a lot of financial media companies, as well as some non-financial media companies, looking at everything from what do you do from a biz dev point of view, how is your site laid out, how do you even commission your sales team, how do you optimize your ads? So depending on the project it was soup to nuts, in some cases it was just content distribution, biz dev.

What morphed out of that, in basically late ‘07/ early ’08, was Investing Channel; for two reasons. One a lot of those same consulting clients were asking us to help execute ad ops and ad sales; A.

And, B, with the ease of content creation there’s a lot more dispersion of users. They’re not converging to large portals in media companies, and it has made it that much more difficult then for advertisers to really find and target their niche audiences, I think because it’s more critical in finance than many other verticals. Probably health as well, and technology.

I’ve put those three as like sub-niche verticals that you really need find your audience. Like I said earlier with people in finance really kind of “transacting” in the long tail, versus just researching maybe in the short tail, it created an opportunity I think to go out and aggregate.

And, look, there’s been networks before, but aggregate things that are super niche level so that you can target a pension fund manager, versus a financial advisor, versus a hedge fund manger. You go to most places and the best they can do really is target a financial professional, generically speaking.

Miller: Or a business person, even more generic.

Desai: Right. Yeah. Right. Right.

So, that’s what we kind of aimed and set out to do, because we saw this kind of change in consumer consumption of these financial content, and had that demand from our consulting business, both of which I started with Bob Verrico, who was running The Street sales and marketing group, prior to that did a bunch of stuff, including running iVillage’s ad sales group through their IPO. Their founder is Jay Desai, who started-

Miller: Just happened to have the last same name as you?

Desai: It just happens that he’s my older brother.

Miller: [laughs]

Desai: Who started the internet M&A at H&Q, which was sold to J.P. Morgan. So, he comes form the whole financial services background. Had been doing a lot of kind of early start up strategy and venture capital, private equity rather, help with them. So, joined us, as we were potentially looking for capital and starting this business.

So, anyway. So, we started Investing Channel effectively about three years ago now.

Miller: OK.

Desai: And since then have gone from zero to about 10 million uniques.

Miller: Wow.

Desai: There’s a lot of things obviously that I would say we’re unique, but the reason I kind of compare us more to financial media companies than other networks is, A, we’re providing all types of ad products that any single site would do, from advertorial, to newsletter, to email, to display, to sponsorships, whatever it is, but also we’re exclusive to managing our publishers’ networks. So we’re rep firm/ network in a way.

You know if you think about someone like The Street- I don’t know where Seeking Alpha is, but I think they’re probably in the range of 5 million uniques, we’ve been able to get that in the long tail…

Miller: Right.

Desai: …pretty quickly. It’s a matter of ratcheting really. I mean I could probably double the network fairly quickly, although getting exclusive deals is not easy. But, it’s a matter of where the ad budgets are, how big are they to kind of then grow the network. So, we’ve been kind of slowing growing this from one million to three million, to five, to ten now, at the end of this year.

Miller: That’s great. I don’t know if you can name names, but like what’s a typical advertiser in the present environment?

Desai: Yeah, I mean it’s nothing too different than what you see on The Street, or some of those larger financial media companies.

Miller: So fund companies, or-?

Desai: But I would say- yeah. Fund companies are spending even more. I would say, like, five years ago options companies were spending a lot, right? OptionsExpress, etc.

Miller: Right. That was a fad.

Desai: Two and half years ago-

Miller: Forex.

Desai: It was Forex, right? And they’re still spending, and so are the options guys. But now I feel like there’s a third way in the ETF side, and that’s dictated by, again, where investments are coming from. Schwab buys an ETF company and now is issuing their own stuff. You see that a lot more where not only there’s a bunch of new small ETF sites popping up and growing from zero to a couple of hundred thousands pages quickly. But there’s, again, that demand from- whether it be self-directed investors, or financial advisors, to maybe have less risk on an individual stock and spread it across a fund, but still have pretty decent upside with it.

We foresee, and have seen a lot of fund, generically speaking, spending. But, so are still the retail brokers.

Miller: But do they end up saying- like at least with a retail broker, and I know from personal experience that they are looking at like the conversion, because they can follow that entire usage through to funding an account. A fund company doesn’t really- it’s really just straight ahead advertising.

Desai: Yeah, it’s hard to say-

Miller: like lead gen?

Desai: Yeah. I mean wouldn’t say it’s- in some cases it’s branding. In other cases they might want someone to download a white paper just to learn more. In finance in general, other than a few products, you’re not buying a $30 or $50 product where you click and buy.

Miller: Right.

Desai: Right? You’ve got to have some user education of why to buy a fund, or why- open up an online brokerage account, that’s a little bit more just one to one, I guess transactional in some way. But most other things it requires some kind of education. I think that’s a big shift I see also in working with our advertisers and agencies. It’s not just straight banner stuff.

Miller: Right.

Desai: They want more integrated stuff. They want to push their content down to our audiences. I think that’s the way to go. You’ve got to educate your audience about whatever financial product that you have. It’s not 30 day window to sell often times.

But, a lot of these guys are just looking for awareness in some way. I kind of differentiate that from just pure branding.

Miller: Right.

Desai: They’re still looking for downloads, or people to kind of learn more about fund, or whatever it might be. But it’s not necessarily, like you pointed out, online retail brokers looking not only, “OK, did someone open a brokerage account. How much did they fund it? How much are they actually trading?”

Miller: Right.

Desai: That’s great. They have that funnel to kind of analytically figure out what’s working for them from a marketing point of view, but it’s less of that type of analysis for the issuers of funds.

Miller: So how much time and energy do you as Investing Channel put into like sort of personifying your users? Like, are you getting to the point where you can say, “This guy is in the market for-” “He’s moved beyond mutual funds and now he’s looking into ETFs.” Has it gotten that granular yet?

Desai: It’s moving towards that. So I’ll kind of speak generally, and then specifically Investing Channel. So, there’s a lot “data targeting” that’s happening in the ad marketplace. In the last year and half it’s been a big shift in buying. That coupled with exchanges, coupled with DSPs, right?

Miller: What’s a DSP?

Desai: Demand Side Platforms where agencies are building their own networks. In all cases it’s about in some ways commoditizing the banner a bit, because you can buy a banner for $10, $3, or $0.25 in today’s market.

Miller: Right.

Desai: But it’s about creating a more fluid marketplace like there is for buying keywords.

Miller: Right.

Desai: And I think that shift has tried to push itself years ago, but is really coming into more fruition today, where this concept of audience targeting and actually finding a cookie profile, not just an impression.

Miller: You’re talking more like behavioral?

Desai: Well behavioral, depending on how- many people may define it one way or the other. You visit options content then you leave it, I can behaviorally find that person.

What I’m talking about is you can buy data from search engines about the search terms that were looked up. You can buy data from an offline financial advisor directory that has that person’s postal information, email address, all that stuff. So there’s all this third party data, I’ll put in that general bucket, that you can go out and buy. Then using technology tie that email address, for example, based on that profile of someone being a financial advisor in Atlanta, and tie that profile anonymously to a cookie, and then distribute a banner to that profile that you’ve just defined, whether at eBay, Yahoo mail, or contextually relevant on my network for Seeking Alpha, or whoever.

That data targeting is becoming more and more prevalent, which goes along the lines of your question, however a lot of it is still like in travel and auto, and like more personal finance- credit card, insurance type stuff. Where you can find that information about someone who may have been on Orbitz and actually typed in a trip to Honolulu and that data is being sold anonymously to then target a banner, which is very relevant, obviously.

But I think there are some privacy concerns that Obama’s administration literally now is kind of looking at, and is going to shape positively or negatively a lot of this data targeting. I think there is kind of an in between that needs to be thought through, but I’m not a politician here.

Anyway, due to what we’re doing I think this data targeting is a lot more relevant for mass networks, where you’ve got a ton of inventory that’s not that super defined and you need that level of targeting. When you’re a vertical, whether you’re a media company or a network, when you’re super kind of verticalized, and when 75% of your revenue- in most vertical companies’ cases comes from the vertical.

Miller: Right.

Desai: Right? There’s not a lot of need for a ton more targeting, because you know if they’re in a fund section versus an options section, versus whatever, what that first ad you should be showing them, and that ad is going to be a higher CPM than anything else.

Now, you could layer in what you’re talking about knowing that person opened up an online brokerage account and we found out some information that they’re really trading ETFs, to then target an ETF in a non-ETF content area. But there’s a couple of things that’s wrong with that scenario. One, that data costs a lot of money to then finally target that ETF that it might not be as valuable just to put up another financial relevant ad that’s contextually relevant.

Miller: Right.

Desai: Or hit that ETF ad in that ETF category, where again, it’s going to be worth in a CPM basis.

So your comment about someone is a mutual fund section and then following them out- yeah. That’s behavioral. That’s being done by us quite a bit. But part of what I took your question about is relevant to this whole buying of data on and offline outside of our network. And we’re doing that for example AARP. They want to target a certain age group.

Miller: Right.

Desai: So, yeah. I’ll go out and buy that data, attach it to my network, and find that 55+ crowd. So, I find for a vertical company buying that kind of intent or demo type data is more relevant for mom-endemic, non-financial advertisers than we have found for financial advertisers.

This whole data market is still being kind of sussed out, what’s valuable, what’s not, what’s legitimate, all of that kind of stuff, but we are starting to work a lot more with more finitely defining those cookies, and those unique users versus just contextual targeting, which still I think king. I think that’s still the most relevant time to hit someone with the highest CPM versus a lot of this data.

Miller: A few years back there was this talk that video was the next battleground. Do you see as an ad unit video being used more and more, or was that more hype back then?

Desai: I definitely think it is something that people are spending a lot of time on, and from an advertiser’s point of view want to get in front of more, but I think even mobile has surpassed that in some ways. I actually don’t know if it’s quite there in finance. It’s definitely there in many other consumer verticals.

But in terms of video, I just look at some of my network, and these are long tail sites, some of them that just put up some You Tube stuff, or use some other player to kind of get people into the video, and it’s growing pretty quickly. It has been for a while in a lot of other verticals.

I think in finance for some reason it’s just taking a little bit longer, and people who are trading, or busy, or whatever it is, don’t want to read a two page article. There’s just been a shift where people are actually consuming a lot more video than before. That’s obviously just led to advertisers and agencies wanting to use that medium to get in front of their audience.

It’s in some cases been nice because some of these more traditional advertisers are so used to kind of a TV commercial environment.

Miller: Right. Right.

Desai: This is a better way of getting more of their budget, because we all know there is a disproportionate amount of ad span in the offline print TV, etc. world versus the online, when the online world is much more measurable, as we know.

So, yeah, there’s been, I feel- I wouldn’t say it’s anything significantly different than a year ago, but definitely a big demand for video kind of advertising generally, just putting a video in a ad unit and having it auto play- no. Right? It’s still got to have the in context of someone kind of listening and watching an actual video.

But I feel like when I go to like J. Fam or a lot of these financial conferences, two things that come up a lot outside of the traditional marketing conversation are, one, like I mentioned earlier, content. How do we get our content out there? How do we get our content out there to kind of educate people to get them to buy our product, is one big discussion.

And, now obviously with iPad and all of this tablet stuff going on, mobile is a big discussion. I think part of it- it’s not necessarily a fad by any means, but it’s the thing to talk about right now. I personally don’t think- it’s kind of like video was maybe three, four, five years- maybe five plus years ago.

Miller: Right.

Desai: It’s still going to, at least in finance again I think is very different for gaining and things of that nature that are very consumer, but in finance these guys are still on their desks, they’re still trading, they’ve still got a big computer browser in front of them. They might be running to lunch and have to do something along it, but that’s a short term thing.

I think tablets and mobile is a big thing, and we see huge demand from our advertisers and agencies to figure out how to get in front of that. “How do I get in front of social- facebook, Tweet stuff?”

So, a lot of this is a little bit more media hype, and it hasn’t quite hit finance, but I think it will in some shape or form, but I think it’s probably a couple of years away.

Miller: From a lot of the people I’ve been speaking to, particularly on the asset manager side, and I don’t know if those are direct advertisers on your network or not, but those are certainly people paying and spending the time and the money to try to bring in new assets. That’s the game there.

Content is obviously, beyond the ad unit, content marketing is one of the best and most cost effective ways of creating a pipeline for these guys. Does that conflict or accentuate some of the work that you’re doing with people? Meaning maybe that free submitted article, Seeking Alpha, maybe- and again Seeking Alpha has not provided this level of detail, but maybe that converts better, or we don’t even know how well that converts. But that’s one way of bringing in new customers.

Desai: Right. Yeah. But, like you said, it’s just one way.

Miller: Right.

Desai: Right? I mean you could, if you’ve got no budget that’s the only way to do it. Right?

Miller: Right.

Desai: And that’s what you should go after, but if you’re looking to really build a business and figure out other means- I think looking at all ways you can market yourself, whether it’s PR by writing this content, whether it’s search engine marketing, whether it’s this banner stuff, whether it’s buying legion from different places. I think there is a full mix of media that can bring in a lot more customers.

But, yeah, at a base level-

Miller: I’m mean from that level an ad unit really is just another form of content, right?

Desai: Yeah, absolutely. I’ve always felt that even if a blogger or a site is writing whatever content they’re writing about, their ad that’s next to it, it’s content. It’s on the page. What the advertiser does with it we can’t always control. I wish I had a little bit more control, because I think we could help advertisers maybe get more out of the banners that they do, since we know our network best and nature of sites.

But, yeah, I totally agree. It’s another form of content. Frankly, they can put their article content within a banner, because it provides a much bigger distribution vehicle than it is trying to get your content published through ten different mediums.

It’s not actually an easy thing to push out your content to a lot of distribution outlets. It is a much easier scenario with much more scale to do that if you wanted just to push content in a banner type unit, but make it look in an integrated way. There are ways that we’ve done that with a lot of our advertisers.

Miller: When I look back at- from what I know as successful advertisers, I guess, in the investment advisor arena I immediately think of Ken Fisher, Fisher Investments. He’s pioneered direct mail in the financial industry. I know what he was doing online was a lot of the same, which was, “Download this free report.”

Desai: Right.

Miller: And then they get somebody on the phone to call you and follow up afterwards.

I’ve heard just in an ad hoc way that I guess the conversion on that stuff has dropped way off recently. Well, at least vis-à-vis still direct mail offline.

Have you heard similar trends to that?

Desai: Nothing relevant to Fisher’s particularly, but… and I agree he has a created a marketing machine there. I think more often than not, as a side note, I feel like a lot of advertisers who don’t work out for us, and for other sites, it’s not necessarily a product issue. It’s more of their marketing funnel. “What do I do when I capture that person?”

Miller: Right.

Desai: And I think there’s a big opportunity in terms of providing marketing services for financial companies on the backend.

Miller: Right.

Desai: Not the front end ad, to get better conversion.

Miller: Is this what you were talking about before in terms of helping them develop their campaigns and things like that?

Do you see your firm migrating to that arena?

Desai: Yeah, I mean we are doing that already in some ways with advertisers that we feel need it. Because, look, I don’t want to take someone’s money and already feel like going into it that it’s not going to perform. So, in some ways we do it, but we don’t provide marketing services and charge for it, and have a design firm.

That’s something that we’re open to and considering, but I think it probably wouldn’t be an internal thing. I might work with a couple of vendors to provide those services as necessary, and just pass the cost on. I think that’s an expertise that we could hire for, and that we have to a certain extent endemically, just because we’ve been in industry so long.

Miller: Right.

Desai: But there is certain expertise that I would want to bring a firm-

Miller: I guess for you the question is whether your advertisers really valued that enough to pay for it, right?

Right now they’re paying you for distribution, right?

So, all of a sudden then you’re sort of saying, “Well, I’m going to help you with distribution, but I’m going to make it more effective.”

Desai: Right, and I think…

Miller: And that’s where there’s always like this push back about-

Desai: Well, so there’s- we have two clients. Right? There’s direct advertiser, or the agency who has the advertiser client.

Miller: The agency probably doesn’t care at all. Right? They’re just doing their job.

Desai: They’re just doing their job, and that is their job. It’s hard for me to say, “Well, this is what you should do.” It adds another layer, so even if the client is dealing with some of the backend funnel stuff, it’s just tough to go around, and so it doesn’t happen quite often in those cases.

But if you’re working direct advertiser, which is 50% of the time for us, they’re definitely much more receptive, and open to a lot of what we may suggest for their campaign. It’s just a matter of sometimes resources on their end to make changes and whether we can provide those resources, and how do you then account for that cost? And often times we just build it in to this CPM if we can, or pass that cost on in some shape or form.

But going back to your questions about Fisher and direct mail- we are more of a digital sales company. We actually do sell direct mail surprisingly, and that’s because we have a handful of postal files that folks like Fisher and Ameritrade and things of that nature are still buying it, with success. But, anecdotally, I don’t know a lot about that space. Anecdotally, I have heard the conversion rates are dropping off quite a bit, because it’s just partially a dying advertising medium, but it’s also just an older demographic that keeps getting older. And so the conversion is just-

Miller: Right. But people are still trying to get to them, though?

Desai: Oh yeah, and they’re still valuable.

Miller: Right. Right.

Desai: I agree though with what you said, the conversions just aren’t there as much as it used to. And I think that those companies who spent a lot of time in direct mail- you look at the old school AOL ISP disks. Right? They spent a crap load of money via direct mail, and it worked for a certain amount of time. But then broadband came in and-

Miller: And killed that.

Desai: And killed it.

So I think in some ways the online medium is not killing it per se, but direct mail- I put that into the print category as it is. Newspapers, and magazines, and all that stuff, clearly, are hurting right now. Things that used to be 40 page magazines are 20 page magazines.

So there’s no doubt that people are spending less, and the conversions are less, because there’s just more mediums that are more measurable, whether online or elsewhere, that their spending their time and efforts on.

Miller: Just to sort of take a detour, a lot of my readers and listeners either contribute or run their own financial sites. Many are not necessarily in the business as a business. It’s sort of as a hobby, or they do it late at night, or something like that.

Do you have advice- and I’m hitting you up. I’ll give you a second to think about it. Do you have advice for somebody looking to get into the business, from where you sit in the industry, how to best monetize their content?

Because a lot of people are struggling. “Do I create a subscription model?” “Maybe free is good because there are no barriers to entry. Everybody can read my stuff.” But then using an ad network isn’t always- it doesn’t feel like the most cost effective way, because a blogger is not going to have the big page view numbers.

Desai: Right. Right.

Miller: How do you think about things like that?

Desai: When you say ‘get in the business’ I am assuming you’re meaning how do I become a big or small player in the financial media?

Miller: Is it feasible for them to get into the business?

Desai: Right. I mean it depends on what their goals are. If they are looking to just-

Miller: Can you build a cheap ad view supported website?

Desai: Yeah. Absolutely, I have a ton of case studies just in my network of 250 sites that are hedge fund managers on the side, yet have built a pretty nice business on their blog between ad revenue and subscription revenue. So I think the short answer is it’s somewhat of a science to build-

Miller: Can you quantify that, what do you mean by a ‘nice business’. Clearly they’re a hedge fund manager, they don’t really need the revenue from the blog.

Desai: Look, they might be generating anywhere from as little as a few thousand to $25,000 a month.

Miller: Wow.

Desai: Between ad revenue and subscription revenue.

Miller: How big a site would a site like that be, that you are defining?

Desai: Between 300,000 pages to 1,500,000 is the range. Again, it totally depends on the content, right? We are generalizing right now, but it’s got to be niche content that’s valuable, that high net, or financial professionals are willing to pay for.

Miller: Typically it’s actionable content, content somebody can read and go make investment decisions on?

Desai: Not necessarily, some of it is industry pieces. Like one writes about the real estate investment market, and it’s not really actionable. It’s just a lot of in-depth research that hedge fund managers and financial professionals would potentially want to buy, or are buying.

That is why I say that it is very, very content dependent, but like I said it’s a bit of a science. You look at any financial media company, it’s free registration/ paid registration, right? There’s a model to get people from reading free content to signing up for a free newsletter, because building up a database is critical, to getting them onto a pay product, to them hitting them with a pay product over time.

You can learn a lot with analytics these days to see where your traffic is. What are people reading? What do they see as valuable to them? Say, “OK, let me turn that into a newsletter now. If that newsletter has three contributors, and I can see one of them is getting the majority of the reading, maybe that guy should be the pay product.”

It’s very much a science, that of Motley Fool, Agora, Investor Place, The Street, all of these guys do very, very well. I think at a much smaller scale, an individual blogger that has an expertise in a subject matter can actually do really well.

I’ll just name a couple that are in the network, that started out free and now have a pay product, maybe just in the last year, and are doing pretty well. Mad Hedge Fund Trader, who, as a business runs money for high net worth folks. Market Folly, who is a hedge fund manager and now just started a pay product, has grown that pretty quickly in just a few months.

So the concept of making, without a lot of work, because these guys have a full time job, of making $5,000-20,000 between an ad model and a subscription model is very much there. I think paid content is something that we are looking to get into more, even though we are an ad business right now, because finance I only see that growing and growing versus a lot of other spaces are diminishing.

Miller: That was going to be my next question.

Desai: I think it’s going to be tough to just pay for the New York Times, quite frankly.

Because, while it’s great content, it’s not super-niche, highly valued, needed content.

Miller: You see the emergence of really, as you said before, everything splintering into these pockets of expertise, and sort of the broad based news sites are becoming less relevant I guess to people. In finance specifically.

Desai: For investors, I think I use ‘finance’ too loosely sometimes, because there’s personal finance- world of home loan, credit card, insurance.

Miller: And that will always sort of be a great broad base.

Desai: Exactly, I agree.

Miller: It’s more generic content in that sense.

Desai: Exactly, and that audience is not as high net worth. They’re not paying for content. The investing audience, their high net worth financial professionals have money to spend to make investment decisions on. In that space, paid content becomes… and will continue to grow, I feel.

Miller: I can’t believe that what I think of as the traditional investment newsletter, a paid product, I don’t want to name names, but some of these ones that have been around for 20 years. I can’t imagine they are doing as well today as they were ten years ago.

I guess my question to you was has that revenue just gone away? Or has that been replaced by the next generation premium site? Which either could be a newsletter- I see sort of the emergence of these stock communities, something like the Kirk Report.

Desai: Right.

Miller: There are a variety of these sites, where people pay a subscription. They are for very active, very communicative type sites, where you’re not just being pushed out content, you are participating in something.

How do you see that playing out? I mean just to put up a newsletter and say I want to charge $397 a year for it, obviously if you work out the numbers it has the potential of being a great business. But I know a number of people who have done that, and it just doesn’t work for them.

Desai: Yeah, and this might sound like a little bit of a cheesy response, but I think, again, it’s the content. A lot of products that have done well and have now flailed, it’s in my mind because it was a marketing product, it wasn’t a financial product. It was buy stocks under $10.

That, in my opinion, has no merit, a stock that’s under ten dollars, or a penny stock versus something that’s $100, you’re still basing however you judge investing in that stock on some level of fundamentals, or whatever your research is. Not based on just on it being a dollar price.

But it’s a marketing spin that works with the psychology of retail investors. And that stuff in years past has really done well. I think, again with the ease of creation of content a lot of that stuff that was paid is free, and in some ways maybe uncovered as not the best product.

And the things that are now succeeding, I think there is marketing spin to it. I’m not going to lie. But the things that are succeeding, and will continue to succeed, are things that actually provide true value to the end user.

Miller: Because there’s a level of transparency, and this is what you were alluding to, that’s crept online. Either through these experts like Covestor or kaChing.

Desai: Exactly, and I think that’s a great point.

Miller: People know how all of these things are performing now. And most of the time it’s not as advertised.

Desai: Right. Someone else mentioned this, but the analogy is, in terms of transparency, when you used to go to a doctor 15 years ago you kind of had to trust whatever the heck he said.

Miller: You looked at the diploma on the wall, and that was it.

Desai: Right. Now, there’s so much content online where you can do you’re research on the little wart that you have on your hand, or whatever the heck it is, to go in and say, “Doc, these are the fours things, you didn’t mention two of them.” So there’s so much more transparency out there in the marketplace that the end business person has to really step up and provide true value because of that transparency, and know what the heck they’re talking about.

Miller: Thanks to Nikesh Desai for participating in this podcast. You can check out Nikesh and his firm Investing Channel at .

Next up, we’ve got Dirk Quail, who is the CEO of a company called . We’ve profiled LikeAssets on the blog previously. Like Assets provides customized benchmarking solutions for individual and professional investors.

If I have a portfolio of securities, and I want to see how well I am doing vis-à-vis a benchmark most platforms allow me to see how well I’m doing against the S&P 500. That may or may not be the appropriate benchmark for my portfolio. So LikeAssets actually looks at the securities in an individual portfolio, and customizes a tailor made benchmark for the specific portfolio. So here’s my conversation with Dirk.

Dirk, tell us about LikeAssets, what are you guys doing?

Dirk: Well, LikeAssets, we think is the only site that let’s investors find out if they are beating the market, and also research firms, and columnists, and bloggers’ ideas are making them money.

You can think of it as the Nielsen for investment ideas. Nielsen monitors and rates the effectiveness of TV shows. And LikeAssets can be the Nielsen kind of taking all sorts of investment ideas, monitoring them, rating them in a consistent way, and that can include an investor’s own ideas, other ideas from the web, from research firms, advisors.

We think ultimately armed with that knowledge of how things are performing it allows an investor to the take action to either change their strategies, or essentially even outsource it and say, “Hey, I can’t do this very well. I should have somebody else help me out.” Or, “I should be in passive ETF’s”.

Miller: Who else are you competing against? How is benchmarking done today?

Dirk: I think if you go out and you kind of canvas the portfolio trackers, and brokerages out there, there’s I think a pretty laissez faire way of benchmarking. Typically it’s the S&P 500, or the Dow. Some of the sites might actually pick your benchmark and lay it across your portfolio, or compare it.

The problem with that is that there’s a lot of different types of investments out there; stocks, mutual funds, ETF’s. Just picking one benchmark invariably fails against the portfolio. It’s not going to match up correctly.

We do all that work for the investor. We take every single stock, mutual fund, and ETF, we analyze them and classify them, and then we store that. When an investor creates a portfolio we identify for each security what the appropriate benchmark is, and we blend that together.

Miller: LikeAssets is sort of assuming a lost out of investors, that they at least have an asset allocation strategy. It’s been my experience that many investors don’t even know what that is. How do you help there?

Dirk: Yeah. I think the first step is actually if they look at those ten securities in the site they’ll be able to say, “Hey, what is my asset allocation?” So that’s kind of the first step. Then from there they can take a view on what their asset allocation should be and monitor towards that.

We can help them out with that, we can provide models that are appropriate, or they can do it on their own. And some people just don’t care, they’re just going to trade, but it still is helpful to know if your picks are meeting the appropriate benchmark. So, it can be used across the investor spectrum from people who have asset allocation strategies to people who don’t.

Miller: I then asked Dirk about benchmarking in general. It seems to be that a lot of institutional investors sort of just game the whole benchmarking thing anyway using whatever benchmark, regardless of its appropriateness, that makes them look better. I asked Dirk to address that, and how investors value performance vis-à-vis certain core baselines.

Dirk: I think so. Higher is important, but I think consistency is also really important. I think you hit upon that, which is if you sat down with five different advisors, or five different institutional players, they would use different benchmarks. They might use different asset classification systems for the same exact portfolio of stocks. They might just show different benchmarks for their picks because it might make them look better.

So, it’s hard to track what’s appropriate, and that’s what we’re trying to do because really it’s about consistency I think first and foremost. Of course, we think the quality is very high and there, but that in and of itself- each institutional say they have a high quality way of classifying assets. But I think it needs to be that consistent across the investing world for investors to get help, and better understand these things.

Miller: How proactive do you plan on being with the service in terms of alerting investors about how far they have drifted from a particular benchmark or style, investment style?

Dirk: Yes, absolutely. We want to let the investors set targets so we can do their monitoring and we alert them. If they are tracking an allocation and their performance in a certain asset class is not doing well, so they can take a look and decide if they need to make a change.

If they’ve identified an asset allocation strategy, and a couple of their asset classes aren’t performing, we want the site to help them find other ideas for that asset class that might perform better for them. Ultimately, you can search by asset class and find very specific investors’ advisors, investors’ research that can help you out.

Now if you don’t want to do all that, we also want to create models for people that can allow them to just pick those and still of course monitor them and ensure that the performance is there, and that the performance is tracked relative to the benchmark.

Miller: Many investors struggle with benchmarking their own performance because they have securities and portfolios scattered across different accounts. I asked Dirk if Like Assets was getting into the account aggregation game.

Dirk: Right now that functionality is actually available at the Seeking Alpha app store, there’s a LikeAssets app there. We’re actually bringing that functionality back into the site in the near future.

But it’s very easy that investor can just log in the way they would normally to their broker, and we’ll go ahead and get the data. We use the FX technology, which is the same thing Quicken uses to get that data. We’ll bring that data into Like Assets, and we’ll calculate the performance of their investments; Mutual funds, stocks, ETF’s. We’ll include the dividends, of course. We’ll look at closed positions and allow them to see the total performance for the account, but we’ll also allow them to see performance by individual position. We’ll create a blended benchmark based on the positions that they have.

So investors can see the performance of each position both if it is benchmarked, as well as the portfolio’s performance, and the overall portfolio benchmark. So, you’ll get an asset allocation too. An investor can start going, “Ah hah.” “I can see what my asset allocation is across accounts.” So you could have an E-Trade account, a Schwab account, a Fidelity account, and we’ll put it all in the same asset classification system, combined with performance, and then combine the benchmark.

But you can of course break it out by account and look at the performance. You might have a retirement account versus a taxable. You can also look at it by stock, mutual fund, and ETF. And I think that’s a really cool feature, because I think to being able to say, “I’ve got stocks at Fidelity, stocks at Schwab,” and see how your stock picks are doing relative to mutual funds. I think that will be very eye opening to investors, because of course many investors do much worse stock investing than they think they do. They just don’t have a really good way to get a handle on that.

Miller: I would think with all the technology and research put into managing customers at the online brokers, that they would be better at benchmarking. Is it just that they don’t care?

Dirk: I don’t know. Part of this is born out of some of that frustration into really being able to understand what my performance is, and get an appropriate benchmarking. The online brokerages do fantastic things in other areas, their screens, their execution. Maybe it’s just, and I’m just speculating, it might be just a matter of priorities for them. But I think it’s sounds to be really critical, and I think we have quite a bit of validation that investors do need to understand this. It’s really hard to make changes and invest properly if you can’t monitor how you are doing.

Miller: Like Assets was one of the first third party data vendors to participate in Seeking Alpha’s app store. Seeking Alpha launched the equivalent of the investing app store, like Apple’s iTunes store. I asked Dirk about participating in that type of community and selling their content, their tool through such an environment.

Dirk: Yeah. I think we’re really excited about that as well. I think especially with this ongoing trend for more specialized information out across the internet there’s going to be investment ideas all over the place. Long term I think it’s going to be very useful to have a very consistent way to monitor and score those different specialists. Because that’s ultimately where a lot of this will go.

There was just an article in Barron’s over the weekend about a real estate research house out in California and their picks. It’s just very interesting, because I would love to be able to say, “We have their picks for the last five years, and here’s how they’ve performed relative to the couple of different RE indexes. If you want RE exposure, these guys are doing a great job.”

And that’s what we think should be going on ultimately for investors When you have a portfolio and you find an asset class that you need, you can go here and find the ideas and the sources that are going to make the money. And that can’t happen if everybody is presenting their performance differently.

I mean people are starting to put it out there, like Motley Fool just in the past year has put out, “Here’s how some of our newsletters are doing.” But they even acknowledge that their performance is different for some of their own different newsletters and advisors, and they are having to make consistent. It’s not even consistent within that one website, let alone from Motley Fool to The Street, and other places.

So, investors are going to have a heck of a time if everybody start fires up their own performance measurement and their own benchmarks. So we think there’s definitely a place for someone who’s going to be kind of a grand central station for all of that type of analysis.

Miller: Hey Dirk, can you tell us a little bit about yourself, your own professional background and a little bit about your parent company?

Dirk: Sure. I worked in banking, before I was at Deutsche Bank. I started working with John Patterson, he was the CEO, and John Hagen, who was the CTO, about 12 years ago. We actually started working more in the defined contributions space, and worked on advice and managed account solutions together with a company called Infosys which was eventually bought by Morningstar.

Through that process of developing institutional solutions we came up with a lot of the things we’re putting out there in LikeAssets right now, like asset classification, style analysis, the performance. We also have wealth forecasting and advice that is going to be added ultimately to LikeAssets as well.

Miller: You mentioned Seeking Alpha before as sort of an expert investment community. How do you size up that new kind of second generation financial website. I know you’re obviously selling your products through that, so obviously you’re biased, but tell me what you think about Seeking Alpha.

Dirk: Well, I think Seeking Alpha has done a fantastic job of putting together an incredible wealth of investment information, investment ideas. The great thing about it is that it goes the full range from passive, passive allocation advice you can find great columnists and bloggers there like Roger Nusbaum he’s kind of an ETF guru. He has a lot of great ideas too. Very active, specific stock picks.

So, having that full range of investors there is a great place to offer Like Assets because all those people are active and taking time to really look at their investments, and they therefore should really benefit from looking at their performance, and understanding the benchmarking concept better.

Miller: I told Dirk I could imagine a time where Like Assets tools were sort of distributed out into the blogosphere and individual bloggers with portfolios, journalists talking about stocks, could use some of those tools to proclaim to their audiences how well they’ve performed vis-à-vis a benchmark. I asked Dirk if that was sort of the direction the company was taking.

Dirk: Absolutely. I think that makes a lot of sense. It goes back to the concept of being this kind of independent, objective rating, where you know it’s consistent. Somebody who’s proud of their performance can point to that and say, “Hey, I have this independence here, there’s consistence, analysis, and scoring going on over here at this site. Here’s how my portfolio has done. Here’s how their doing.”

We want to have people with the ability to track different providers of research and ideas and have grades on their portfolios every week. That is going to be a feature, so you can get email updates on portfolios you’re tracking. So, it’s going to be a great way.

We have a couple of the sites already doing research, who are doing well, that are very interested in developing a stronger connection, so they’ll have more of a regular reference to see how their portfolios are doing linked from their sites, because they like the idea of having those links to show how their research is performing in this third party picture.

Miller: Dirk has analyzed Morningstar’s role recently as sort of arbiter of benchmarking truth in the investing world with a couple of blog posts and some analysis recently. So, I asked him a little bit about that.

Dirk: Yeah. That’s absolutely right. Morningstar itself needs to be rated. I did a blog post on their mutual fund picks, and their stocks picks, and it’s very telling to me, basically they have over a year and a half, they have provided a 0% return over their appropriate benchmarks, their mutual fund picks and their stock picks on their website. I think it was a very interesting analysis, some thing you are obviously not going to see on the Morningstar website, but it just point out the need for this type of service.

Miller: Thank you very much, Dirk, for participating in this week’s Tradestreaming Radio. You can check out Dirk, and Dirk’s firm Like Assets at There’s a link to it on my blog at Once again, I’m Zack Miller, the author of TradeStream Your Way to Profits: Building a Killer Portfolio in the Age of Social Media. Thanks for checking us out. I look forward to talking to you again in a couple of weeks.