HOLY COW!
WSJ article about Internet message boards (like SI).
January 31, 2001
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.
[Yeah ! SI rules !]
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
Copyright © 2001 Dow Jones & Company, Inc. All Rights Reserved.
AI
