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Dot-Comeback: Financial Sites Hire Editorial Staff, Add Pay Newsletters


As the financial markets begin to recover, so do the business sites that cover them closely. CBS MarketWatch plans to hire 37 people, and is in the middle of hiring 40. Is it just cyclical or a growing trend?

The words "boom and bust" mean a lot more to the proprietors of financial news sites than the rest of us. Sites such as and CBS MarketWatch were born in the dot-com boom, covered that growth in minute detail and helped fuel the individual investor explosion (Remember when it took a call to a broker to make a trade?). And they also saw their fortunes dissipate as investors fled for the hills.

Now that online advertising is making a revival, and the U.S. stock markets have picked up, it's no surprise that financial sites are on a roll again. It might not be boom-era growth, but many of these sites are in the midst of hiring editorial staff and adding paid-subscription newsletters. The newsletters are a hedge against future ad busts and a nod at the growing acceptance of paid content.

The poster child for the boom-and-bust cycle is probably CBS MarketWatch, born in the mid-'90s and stubbornly sticking to a model of ad-supported free content for the investing masses. After years of losses (including $9.7 million in 2002), MarketWatch had its first annual profit of $2.7 million in 2003, while also losing its star columnist Thom Calandra to a stock-touting scandal.

When Reuters decided to pull its content out of partner sites, MarketWatch deftly made a deal with Thomson Financial to create an institutional news feed that would also benefit its free site. MarketWatch CEO and Chairman Larry Kramer said he would be hiring 37 new editorial staffers -- up from 80 today -- to help with the news feed and the free site.

"The Thomson deal represents the largest licensing deal in our history, and one in which the only product we are licensing is our news and news capabilities," Kramer said via e-mail. "[The new hires are] split between reporters who will be picking up industries and companies, economic coverage, and some new desks we are creating to take advantage of many of Thomson's real-time data feeds."

Kramer says the site has launched four pay newsletters in the past year and a half, with plans to launch one per quarter -- including RealityCheck from recent hire Herb Greenberg. Kramer sees financial news readership driven by two emotions: fear and greed.

"During the '90s boom, it was all about greed," he said. "[People said] 'How do I make millions on Internet stocks?' Every cab driver was playing the market. A few years ago, as the market crashed, people got more concerned about why their 401k's were shrinking and all their investments were drying up."

IPO dreams and pay newsletters

As Google prepares to go public, online readers are starting to move from fear to greed again. While business portals such as MSN Money and Yahoo Finance still lead in traffic numbers tallied by Nielsen//NetRatings (see chart), other sites are gaining ground., for example, saw its traffic increase 94 percent from March 2003 to March 2004 to 4.6 million unique visitors -- though it's still a far cry from leader MSN Money's 11 million visitors.

0 President and CEO Jim Spanfeller told me his site hired 20 people last quarter (half editorial, half business), and has plans to add another 20 by the end of the year (mainly editorial). He told me the site is boosting coverage of personal finance, stock markets and specific areas of business -- known as "verticals" -- while adding four or five times the number of online video clips it produces in its own studio.

In the past, and other online divisions of offline media companies had dreams of their own spin-off initial public offerings (IPOs). Does Spanfeller think it's time to revive those dreams?

"It's a possibility," he told me by phone. "We'll see how the markets go, we'll see how the Google IPO happens. We'll see how our own trials and tribulations unfold...We've been profitable for two years now. It's old hat now, you know [laughs]."

While has dabbled in pay newsletters, investor-focused sites such as and Motley Fool have turned them into their bread and butter. In 1999, got 55 to 60 percent of its revenues from ad sales; now, ad sales make up just 17 percent of revenues. While staffing is down about 50 percent from the company's peak size in 2000, CEO Tom Clarke told me the site is "selectively hiring" into specific vertical areas of interest for readers.

A quick glance at's Jobs section shows that they are indeed interested in seeing resumes from editors and reporters, though the jobs are not specific. Clarke says there has been a shift in what investors want to read online -- and what they're willing to pay for trusted information.

"If you look at what's transpired over the past year, what's been successful is more targeted communication to the investor that tells them more specifically what to do," he told me in a phone interview. "If you look at any of the big news sites that publish financial newsletters, we're giving people opinions on what to do. The commodity type of news is still valuable, but it doesn't carry the same weight as it did before."

Motley Fool was another investing site that was drinking a little too much of its own Kool Aid in the go-go days. The company sold research reports on companies, hyped its own "Rule Breaker" portfolio, and even started an experimental information exchange called

At one point, the Fool's staff was 400 strong, with 160 working on the site's technology, according to spokesperson Jamie Patten. Now the site is down to about 80 staffers total, and is much more focused on pay newsletters. The lean strategy is working, as the site has been profitable for the past two years, and is planning to hire about seven editorial people.

"There's an ebb and flow to our business, as we're beholden to some degree to the stock market," said Jonathan Mudd, Motley Fool's senior vice president for media programming. "Subscription services are wonderful sandbags...The downturn at Motley Fool was a double whammy, because we suffered like a lot of other Internet companies because we were largely dependent on advertising. At the same time money came out of the stock market, and we suffered [from that as well]."

Though so much has changed since the boom time, Motley Fool still touts its "state of the art game room" for prospective employees on its Jobs page online, with a quote from Worth magazine in 1998 describing its ping-pong table, pool table and foosball table.

Big sites think differently

Even BusinessWeek Online is feeling the pull to expand, as its traffic has grown 200 percent year-over-year to 3.3 million unique visitors in February 2004, according to Nielsen//NetRatings. The site's General Manager Peggy White says that 75 percent of its content is now free online, though they're planning to add their first pay newsletter in the next 60 days -- and you can't get it free even if you subscribe to the magazine.

White told me BusinessWeek Online has been profitable for the past six quarters, and that ad sales were up 50 percent over a year ago. Though she was a bit cagey about plans for hiring, White said the staff had grown about 10 percent in the past year and thinks a larger staff is a "likely scenario" in the future. She thinks readers are hungry for more content.

"BusinessWeek has always been strong with techology coverage and what technology means for your business," White told me by phone. "So we see that as a growth area. Investing, too, since it has been coming back. We see that as an area of real growth."

The king of paid financial news content, the Wall Street Journal Online, has experienced less robust growth in subscriber numbers and ad revenues. In the first quarter, paid subscribers stood at 695,000, up only 0.9 percent from the previous quarter, while electronic publishing revenues (which include Dow Jones wire services) were up 9.1 percent, lagging behind the revenue growth at most major online publishers. managing editor Bill Grueskin told me he had no plans to hire more staff. But thanks to better automation, some people who had been focused on repurposing print stories were now freed up to do more original content, he said, including interactive features.

"The idea isn't to just layer more stories onto the site, because the site has a lot of stories between the print Journal and newswires," Grueskin said by phone. "No one comes to and says 'you don't have enough stories to read.' But our interactive graphics have been really effective."

Most recently, the site has run some full-page interactive features on the FCC's push to curb indecency, and even began doing a Weblog on companies that outsource abroad, a hot business topic. Grueskin admitted it wasn't a traditional blog with one person spouting opinions and links.

"I think if we were doing something like that on the Journal, there would have to be a whole editing process," he said. "Readers who come to the Journal in print or online have the expectation that there's been some editing. To eliminate that would not be what readers expect."

But with so many financial sites starting to hire reporters again -- after a long drought --- readers should expect to see a lot more coverage of industries that interest them. The main difference now is that some of the best investing content will come at a cost, which means both readers and publications might invest more wisely in the next boom.

Related Links
BusinessWeek Online
CBS MarketWatch
CBS MarketWatch: CBS MarketWatch's Calandra Resigns
CBS MarketWatch: MarketWatch, Thomson launch news service
CBS MarketWatch: net income rises
MSN Money
Motley Fool
Motley Fool jobs's editorial job openings
WSJ Graphics Page's Work in Progress blog
Wall Street Journal Online
Yahoo Finance

Larry Kramer, MarketWatch CEO and Chairman: '"During the '90s boom, it was all about greed .... As the market crashed, people got more concerned about why their 401k's were shrinking and all their investments were drying up.'


Tom Clarke, CEO: 'The commodity type of news is still valuable, but it doesn't carry the same weight as it did before.'


Jim Spanfeller, President and CEO: 'We'll see how the markets go .... We'll see how our own trials and tribulations unfold.'


Peggy White, BusinessWeek Online general manager: 'We see (technology) as a growth area. Investing, too, since it has been coming back.'


Bill Grueskin, managing editor: 'The idea isn't to just layer more stories onto the site .... No one comes to and says 'you don't have enough stories to read.''