For the GNET-insp thread:
(mentions SI)
Raging Bull Goes for a Bargain
As Interest in Stock Chat Wanes
By STACY FORSTER
WSJ.COM
In the days of irrational exuberance, online stock discussion sites were the
hot spot for investors to get advice, swap ideas and pat each other on the
back.
Now, much of that swagger is gone, and
investors are spending less time on the
Internet chatting with each other about their
stock picks and the market's direction.
As their business dwindles, stock-chat sites and their owners are forced to
make some tough decisions. Some are trying to expand their reach through
deals to put their message boards on other Web sites.
Others have decided they no longer want to be in the message-board
business period.
That sentiment was underscored Tuesday when CMGI Inc.'s Alta Vista
unit decided to sell its waning Raging Bull stock-chat site reportedly at a
bargain-basement price to Terra Networks SA, which operates Web
portal Terra Lycos.
Terra Networks referred calls about its plans for Raging Bull to officials at
the message-board site, who said they are still working on a new strategy
and weren't ready to discuss how the site might evolve.
Nevertheless, Katie Rae, general manager of Raging Bull, indicated the
marriage would be a boon because Terra Lycos has deeper resources and
content than Alta Vista.
"They're a broadly diversified financial site with tons of great content that
we think will benefit our users," Ms. Rae says.
Investors' infatuation with stocks has been
waning as the market struggles. And they are
using message boards far less frequently than
they were during the heady times early last
year.
"People want to talk about their wins, but how many people tell you about
their losses?" says Steve Stratz, a spokesman for Silicon Investor
(www.siliconinvestor.com), a discussion community operated by
InfoSpace Inc.
In March 2000, when activity was at its peak, users spent about 100
minutes a month at Silicon Investor, 90 minutes at Raging Bull, 35 minutes
at Yahoo! Finance and 30 minutes at the Motley Fool, according to
Nielsen/NetRatings.
But by December 2000, that activity was sharply reduced. Time spent by
users at Silicon Investor was down 25% to 75 minutes a month, Yahoo!
Finance was down 46% to 19 minutes a month and the Motley Fool was
down 60% to 12 minutes a month. Raging Bull's activity had fallen so far it
was below Nielsen/NetRatings' reporting cutoff of about 100,000 visitors.
Stock-chat sites must evolve from being a forum for the day-trading
crowd, analysts say, if they want to overcome the difficulties they will face
when the atmosphere on Wall Street sours and scares away short-term
players.
"The challenge for them is to remake themselves into resources for people
that are not fanatically active traders," says Robert Sterling, an e-financial
services analyst with Jupiter Research in New York.
"There's much less growth left in that frequent-trader segment than there
are in other segments, such as the occasional trader, so they have to start
offering services that appeal to less-aggressive traders," he adds.
By broadening their offerings beyond stock chat to incorporate advice and
other investing tools, Mr. Sterling says message-board sites can become
more appealing to many investors.
Some sites are trying to boost traffic in other ways..
Silicon Investor, for example, will provide some "free" message boards on
partner sites. Silicon Investor already has boards on other sites, but users
have to be Silicon Investor subscribers to post messages. Anyone can read
messages for free.
Mike Coddington, director of consumer sites for InfoSpace, says Silicon
Investor is leveraging the strength of the community it has developed by
licensing its boards to other Web sites, such financial news providers
TheStreet.com and Bloomberg.com.
"Basically the community is our strength, and that's what we're focused
on," Mr. Coddington says.
Raging Bull was put on the selling block because it no longer fit Alta Vista's
strategy, which is to focus on strengthening its search engine rather than
aspiring to be a portal.
Alta Vista paid $163 million in stock in February for Raging Bull, but
reportedly sold it for $10 million, reflecting the declining allure of stock
discussion sites as the market became rocky.
Online stock chat was especially damped by the steep decline in Nasdaq
stocks -- the focus for many online investors. In December, Raging Bull
had 114,000 unique visitors, down 85% from its peak in March, when the
site had 806,000 unique visitors, according to Media Metrix.
Ms. Rae, of Raging Bull, says the site is working to integrate its message
boards with Terra Lycos and Lycos' financial services area, Quote.com
(www.quote.com). Raging Bull had developed as a niche site, she says, so
it became clear it needed a strong partner such as Quote.com, which has
deep financial content, to better meet users' needs.
While some message boards struggle, analysts say the Motley Fool
(www.fool.com) has more room to maneuver in a slower market because
of its participants' greater focus on education, long-term investing and
personal finance.
Even with slower market conditions, the Motley Fool has continued to add
users. In December, the Motley Fool had more than 2.7 million unique
visitors, up 29% from 2.1 million in March, according to Media Metrix. A
spokeswoman for the company says the December activity represented an
all-time high.
"Because they've got a longer-term focus, they're less vulnerable to market
shifts than those that cater to more active investors," Jupiter's Mr. Sterling
says.
Write to Stacy Forster at stacy.forster@wsj.com |
