By Dominic Jones
PITY the investor relations people at Illinois Tool Works Inc. They arrived at work this morning to find that someone named Jason Wood had gained access to Yahoo! Finance and is calling their latest acquisition a “strange, strange deal.”
You can almost hear them asking: “Who the hell is Jason Wood and where did he come from?”
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| Blog posts filtered by Seeking Alpha now appear on Yahoo! Finance stock pages. |
Jason Wood is a technology investor who runs the Ponderings of Woodrow blog. His commentary, along with that of up to 200 other invited investment bloggers, is now available on Yahoo! Finance, the world’s most popular investment website.
In a deal with blogging network Seeking Alpha, founded by former Morgan Stanley analyst David Jackson, Yahoo! Finance is including edited blog posts on its company pages alongside news from mainstream sources such as the Wall Street Journal and Reuters.
The move follows a similar one earlier this year by the much smaller Google Finance investment website, which includes unfiltered blog posts on company pages.
However, with the Yahoo! Finance initiative, Seeking Alpha’s blog contributors now have access to a much larger audience of up 10 million users. Recent research by Thomson Financial and others suggests that Yahoo! Finance is arguably the most influential resource among investment professionals and retail investors alike.
“For Seeking Alpha’s contributors and for bloggers in general, this is a big day,” Jackson said in a blog post.
“Stock market blogs have reached the point where traditional financial media companies can no longer ignore them. TheStreet.com, MarketWatch and even The Wall Street Journal now frequently link to blog posts from their websites,” he added.
Filtered coverage of a wide array of companies
While many companies will likely be worried about bloggers getting such prominence among their investors, Jackson said the deal was good news for companies because Seeking Alpha’s army of contributors “enables vastly broader coverage of stocks than traditional media companies can provide.”
Seeking Alpha, which takes its name from the portfolio management term for the excess return over a benchmark return, selects articles from bloggers based on “a unique slant and rigor” in the work. The editors favor articles from finance professionals and industry experts.
Money managers are expected to hold positions in stocks they write about to demonstrate of genuine conviction in their view of the stock. Authors are required to disclose whether they have a long or short position in the stock under discussion. Seeking Alpha does not publish articles about penny stocks that are easily manipulated.
Contributors to Seeking Alpha are not paid and provide content to gain profile for themselves, their blogs and the services they provide. You can view a list of some of its most prominent contributors on Seeking Alpha’s website.
Rapid rise to prominence
Since its start in early 2004, Seeking Alpha has rapidly gained a reputation among bloggers as the best aggregator of investment blog commentary and information.
In July, Google Finance began providing links to Seeking Alpha’s free earnings call transcripts on more than 400 companies. Yahoo! Finance, which has a paid transcripts deal with Thomson Financial, will not promote Seeking Alpha’s free transcripts.
A short while later, Barrons, the investment weekly, began including Seeking Alpha’s blog headlines with its mutual funds coverage.
Yesterday’s announcement about the Yahoo! Finance link up is likely to attract new contributors to submit articles and analysis to Seeking Alpha.
Investors get new perspectives
By including blog posts in its information mix, Yahoo! Finance is giving investors access to new and different perspectives on companies they own or are interested in.
What does this mean? Let’s return to Jason Wood and his take on Illinois Tool Works’ recently announced acquisition of software company Click Commerce.
After a seemingly off-topic ramble about Cisco, IBM and HP and the general M&A climate in the technology sector, he gets down to his thoughts on the ITW-Click Commerce deal.
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| Investors have access to new and different perspectives on companies. |
“I’ve seen a lot of software acquisitions, some that made sense, some not so much. But few have left me scratching my head more than this one,” Wood says.
He then goes on to list the reasons the deal is odd for ITW, including that it is the company’s first software company out of 700 business units and the fact that the purchase price was much more expensive than the company’s usual deals.
The blog post closes with no real conclusion, other than that ITW’s intentions are unclear, but that big tech players like IBM and Oracle probably don’t have to worry about competing with ITW for targets.
It is standard blog fare and only time will tell whether investors will use the information or find it valuable.
Whatever the case, it’s out there now. You might want to check Yahoo! Finance for any blog opinions about your company.
Dominic,
I came across this comment today and wanted to offer my perspective, as the author of the Illinois Tool Works piece.
You’re correct to point out that I don’t draw any investment conclusions, and that’s intentional. My blog is for discussing technology-related matters of interest, and some time ago David Jackson asked if I would be interested in participating in Seeking Alpha.
As an investor, I’m sensitive to the power of the written word and that’s why I take great pains to NOT make investment recommendations. My goal is to foster discussion on matters that interest me.
As to the factual matters, I like anyone else publishing content is subject to scrutiny if I get the facts wrong. I take great care (as most if not all of the Seeking Alpha contributors do) to make sure that fundamental and factual data I write about is accurate.
To your point, blogs are certainly about personal opinion and I don’t hide that. It would be my hope that the audience my blog is regularly consumed by understands that.
With Yahoo! carrying the content (an entirely new circumstance, by the way), it raises the point of whether our blog’s reach now extends to people who otherwise don’t understand that nuance.
I liken my blog (I won’t generalize for other bloggers, many of whom are trying to make their livings as journalists or analysts) to an online op-ed piece. Perhaps Yahoo! needs to delineate the difference between op-ed pieces and actual news; that’s not for me to decide.
One other point, just to make sure you’re aware. I disclose whether I hold a position in any publicly traded company I discuss, and that extends to my personal and professional holdings.
Best,
J
[...] Understanding what resources retail and professional investors are getting from portals, and seeing what they’re saying about your company, can help you make better decisions about your company’s website. [...]
[...] Seeking Alpha signed a deal last September with Yahoo! Finance to provide filtered blog posts to the site. Seeking Alpha content is included in Yahoo! Finance’s news section and on company profile pages. Here is an example of a presentation transcript on Yahoo! Finance for Ballantyne of Omaha, a small theater, lighting and restaurant supply firm. [...]