Opening Cross: Don’t Chase Imaginary Butterflies… Stay Thirsty, My Friends

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I’m a sucker for viral ad campaigns, such as DirecTV’s current “Get rid of cable” campaign or Dos Equis’ “most interesting man in the world” ads, both of which have been able to sneakily insert their catchy lines into general parlance. I’m also a sucker for technical ads that actually show you why something works—as opposed to just telling you that it’ll work—such as the car manufacturer that a few years ago had an ad about how they deconstructed their cars and re-engineered every component to build a better car. Sometimes you have to tear things apart to put them back together better.

In the data space, Seeking Alpha is debating whether to take its single platform and break out some of its component parts as standalone, fee-liable services to boost its audience (and its potential revenues) in response to demand from smaller firms, potentially starting with its research archive, which is currently only available to clients subscribing to its professional service.

Another service that Seeking Alpha may offer on a standalone basis is making new analysis items available to professional clients 24 hours before making it available for free—potentially selling that extra timeliness to anyone willing to pay.

At first glance, Seeking Alpha’s 24-hour advance for professional clients might seem the kind of disparity that would attract the ire of authorities such as New York Attorney General Eric Schneiderman, who has cracked down on methods of early information release to ensure high-frequency traders cannot gain an unfair advantage over other institutional investors, such as pension funds, and retail investors. Seeking Alpha, though, likens its practice to any subscription website that makes premium content available to paying subscribers first, before then making it freely available to all visitors to its website, citing The New York Times and Barron’s as examples.

However, Seeking Alpha’s strategy may owe more to exchanges, which routinely break down bundled data products into smaller, more focused datasets: the idea being that these components cost less than buying the entire bundle for firms that don’t need everything and may balk at paying for the bundle—though these often end up being an incremental expense. For example, NYSE Euronext recently broke out its options complex order book data into separate feeds. And Nasdaq claims that its low-cost Nasdaq Basic service will have saved the industry $75 million by the end of 2014 versus the cost of subscribing to the consolidated tape feeds (based on the potential savings if firms switch).

And from two of the largest entities in our space to some of the smaller ones: New York-based crowd-sourced estimates provider Estimize has recently hired new heads of product and analytics, and design, to support the vendor’s expansion into new data types, starting with its Mergerize M&A data platform. Estimize is flush with an extra $1.2 million in recent funding to support its new forays.

Another company flush with cash is social media aggregator Gnip, which was acquired by Twitter—its partner and data provider—last week, in a move that signals just how valuable social media data has become to consumers such as traders. The deal reminds me of an exchange buying a data vendor: the venue generating the source data (tweets, rather than trades) recognizes that instead of allowing others to piggyback on its success and re-sell its “exhaust fumes,” it could control the entire distribution chain of those using its data for trading.

Also looking to target a wider segment of the chain is Bayes Analytic, a startup stock price prediction platform provider that is preparing to roll out its platform—originally built as a proprietary trading tool—to investment advisers.

By breaking down their old models and taking a new direction, Bayes, Seeking Alpha and others may be able to make their services as pervasive and viral as DirecTV and Dos Equis ads. So stay thirsty, my friends—for data and new ways of selling it.

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