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Is StockTwits the New Yahoo Finance?


For information-hungry traders and investors, the answer is yes.

There's good news today for investors living their lives 140 characters at a time: stock-centric tweet aggregator StockTwits just raised $3 million in new funding from VC firms Foundry Group and True Ventures. With tens of thousands of users, StockTwits' success is a testament to the power of the real-time web, where users customize their experience rather than simply accept destinations as-is.

StockTwits piggybacks Twitter by organizing tweets containing specific stock-related tags. Stick a dollar sign in front of a stock symbol and StockTwits will pick it up and categorize it. For example, if you're talking about Google (GOOG), put $GOOG in your message and StockTwits will pay attention. For tweets not containing a ticker symbol, just use two dollar signs in a row.

This system works extremely well. It's pretty easy for users to put together a personalized news stream about the stocks you care about. If all you want to hear about is Hewlett-Packard (HPQ) and Green Mountain Coffee (GMCR), you can do just that with a few clicks. Bloggers and writers also benefit by gaining highly-targeted audiences for their work.

The end product is a real-time, stream-of-consciousness flavored rival to Yahoo (YHOO) Finance, the dominant online financial news and information aggregator. While Yahoo has obviously had some execution and strategy missteps in recent years, Yahoo Finance is one of the best properties on the web. Google Finance doesn't even come close.

Where they differ is the flavor of content. The YF news feed is dominated by major business news providers like Reuters, BusinessWeek, Minyanville, and (TSCM), while StockTwits has a heavier concentration of opinionated bloggers and market personalities that keep things spicier. As its name would imply, StockTwits is also much more stock-centric than YF, which has a heavy dose of personal-finance content.

On a StockTwits ticker stream, you'll find links not only to the big news stories from Bloomberg and the Associated Press, but also to smaller blogs and websites reporting and commenting on the day's happenings. If you need to know what's going on with any particular stock, odds are that someone on StockTwits is talking about it.

Inherently, the YF/StockTwits comparison is a case study in how much the web has changed since the 1990s Internet bubble. YF was started when the web was all about the landgrab. Yahoo did Finance early and and did it damn well, covering money from A to Z. The results speak for themselves -- it's the number-one finance destination on the web.

The comparatively minimalist StockTwits is a distinctly modern web-service offering. It's all about bouncing around filtered, bite-sized pieces of information from a million sources in real time. It's more micro, more interactive, and more freewheeling. Perhaps inadvertently, StockTwits combines the best attributes of RSS feeds, message-board chatter, and good ol' news.

So let's ask the question: Is StockTwits the new Yahoo Finance?

For a certain enthusiast class of information-hungry traders and investors, the answer is a resounding yes. There simply isn't a better free source of real-time financial news and commentary out there, and it's all driven by a highly active community ensuring that no story goes untold -- or at least undistributed.

In fact, it would be wise for a larger financial media company to acquire StockTwits ASAP. I have no idea whether StockTwits is making money or if it's actually for sale, but it has the potential to be wildly profitable. Active traders and investors are among the most attractive advertising demographics in existence, so StockTwits could turn into a goldmine for its owners as traffic builds.

Let's just hope it doesn't do anything silly with all that moolah!

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No positions in stocks mentioned.
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