VentureBeat

AOL’s Money and Finance group this week announced an overhaul of its popular destination site for individual investors. At stake: A battle for the hearts, minds and wallets of tens of millions of individual investors who use the Web each day to track their stock investments.

This is above all an attack on Yahoo Finance, and comes as that popular site’s traffic begins to flag.

In a conversation yesterday with VentureBeat’s Mark Coker, Marty Moe, senior VP of AOL’s Money and Finance group, says AOL is working to create a free online equivalent of the Bloomberg Terminal for individual investors, referring to the $1,500 per month subscription service that represents the holy grail of research tools for Wall Street professionals.

The new AOL service includes company-specific real-time news feeds, drawing upon more than 3,000 news and blog sources; automatic stock quote updates without full page reloads; improved charting; and smart use of contextual interfaces that anticipate what the investor will want to research next. Those are the highlights; there’s more.

Wall Street professionals are unlikely to abandon Bloomberg any time soon for AOL, but AOL’s impressive update puts the heat on other leading online finance destinations, especially the long time #1 financial portal, Yahoo Finance.

Yahoo Finance has suffered declines over the last twelve months in key metrics such as page views and time spent in minutes, while rivals AOL, MSN Money and Dow Jones have held their ground or trended higher over the same period (click on image to enlarge), according to Comscore Media Metrix data Moe shared with VentureBeat.

There’s a long rivalry here, but AOL may have reason to feel it should own this area.

AOL’s experience in the personal finance category spans nearly 15 years. In the early pre-Internet ‘90s, back when the Web was barely a glimmer in Tim Berner-Lee’s eyes, America Online took the world by storm with its pioneering AOL Finance, which allowed small investors to feast upon a cornucopia of stock market news, charts, portfolio management tools, research tools and community features.

But then the Internet happened. Following the introduction of Mosaic, the first graphical web browser, alternative online finance destinations such as Yahoo Finance flourished like weeds in rich soil, offering the same information and services for free that AOL once charged for. Internet stock brokers like Charles Schwab, E*Trade and Ameritrade introduced their own online research and tracking tools, offering customers even more alternatives. AOL was slow to adapt to the world of the open web, instead opting to become a poster child example for the perils of walled gardens.

Despite the hits taken to the AOL brand and mass defections of paying customers, AOL Money and Finance remains a strong property. The site had more than 10.5 million unique visitors in October, according to comScore MediaMetrix, up a respectable 27 percent over the same period a year earlier. AOL says its BloggingStocks blog has risen to become the number one most trafficed stock blog in 18 months. It plans to launch a new consumer finance blog next month called WalletPop.

AOL says it has learned from its mistakes and is pursuing a strategy of hyper-personalizion by offering personal finance options that leverage the best of open web technologies and practices. AOL’s real-time scrolling newsfeed, which draws upon over 3,000 news sources, is particularly impressive, and speaks to Moe’s vision of personalized news and data tracking.

AOL Gunning for Yahoo

Moe says Yahoo helped establish the gold standard for Internet finance sites, yet over the years has allowed its offering to stagnate.

As long time users of Yahoo Finance and its personal news portal, My Yahoo (a primary entry point into Yahoo Finance for millions of users), we tend to concur with Moe’s assessment. Some of Yahoo’s wounds are clearly self inflicted, such as this month’s ill-fated upgrade to a new clunky My Yahoo page that has already generated thousands of complaints from users, or it’s message board fiasco last summer that alienated users with its poor usability.

We think Yahoo Finance lost sight of what made it special by breaking what was never broken - its lightweight but content-rich pages, and its brilliant stock message boards that once buzzed with activity long before anyone coined the terms social media or Web 2.0. Yahoo’s missteps may leave an opening for revitalized competitors such as AOL to come along and chip away at its frustrated user base.

While AOL’s new and improved finance pages look promising, not all of its new features are ground breaking. The service’s new automatically updating stock quotes, for example, have been standard fare on Yahoo Finance for about a year.

Another risk facing AOL is its heavy use of Adobe Flash technology, which we found can create slow-as-molasses page response times that impede user experience. It’s the same trap that just snared Yahoo with its redesign of My Yahoo. By over-using these rich media technologies, web properties create bloatware that leaves us longing for the days of Yahoo’s static but snappy pages of the ‘90s.

Mark Coker is a contributing writer for VentureBeat. He’s founder of Dovetail Public Relations, a Silicon Valley technology marketing firm. He has no clients among the companies mentioned in the story, nor among their competitors. More on Mark at http://www.linkedin.com/in/markcoker

Silicon Valley venture firm Benchmark Capital has invested in a finance blog company called Seeking Alpha, a surprising move in our view, given that blogs are difficult to monetize.

Venture firms want to invest in companies going for billion-dollar markets, and Seeking Alpha is a two-year old boot-strapped company that is losing money, the company’s chief executive David Jackson confirmed with us earlier today. Blogs have become mainstream, too, so what do you think Benchmark sees in this company?

Well, it apparently sees a very focused chief executive, who wants to aggregate all of the finance information being supplied by hundreds, perhaps thousands, and maybe even millions of investors with a view about stocks, and ordering their analysis by ticker symbol and other methods. It is supplying the transcripts of quarterly corporate earnings calls, annotated data from WSJ pages and other info.

Underscoring Seeking Alpha’s ambition is a deal the company announced today with Yahoo Finance, whereby Seeking Alpha’s content is added to the stock quote pages of Yahoo Finance, alongside other mainstream content, which includes sources like Street.com and Dow Jones.

CEO Jackson said Seeking Alpha aggregates content from 200 contributors, who have signed a basic agreement with Seeking Alpha to provide the content. The contributors have an incentive to providing the data, Jackson explains, to get exposure for their newsletters or consulting services, and so they are doing it for free. One guy won a $10 million account from a client who saw his analysis on Seeking Alpha, says Jackson (though we did not independently attempt to confirm this). Seeking Alpha vets the material, and asks the contributors to disclose any conflicts of interest they may have, such as short or long positions in stocks. He has hired human editors to do this. Seeking Alpha needs the capital to build up its web team, and to help customize the stock analysis in sophisticated ways, so that it reads nicely on Blackberry devices, for example, Jackson said.

By putting the bloggers on a par with Dow Jones, Street.com and other mainstream sources, Jackson thinks Seeking Alpha will encourage even more bloggers to participate. Seeking Alpha’s aggregated content may soon dwarf the content produced by mainstream sites, the thinking goes.

So now you are getting the full image — the image of that revolutionary, proverbial long tail. “We’re tapping into the long tail,” says Jackson referring, to the long line of contributors with a good opinion about stocks he thinks will transform analyst coverage of mid- and small-cap companies that newspapers and other sources don’t have the resources to cover.

This is just the latest start-up using Web 2.0 techniques to attempt a break into the big time. Another includes SocialPicks, which we saw a demo of several weeks ago. SocialPicks, based in Silicon Valley, is trying to create a Web site to do something similar to Seeking Alpha, but is in early days, and has yet to figure out how to mobilize contributors. There is also New York based Monitor110, which just raised $5 million in funding from DFJ, which is using blogs to give investors a new edge on information.

Jackson did not disclose how much Seeking Alpha has raised. Jackson worked for five years as a technology research analyst for Morgan Stanley in New York covering the communications equipment sector, and left in 2003.