March 26, 2000
Personal-Finance Sites, in Search of
By MICHELLE LEDER
emember a few years ago,
when those newfangled Web sites that allow investors to track
their investments online seemed like the best invention since, well,
Now, of course, most any personal-finance site worth
its silicon offers customized portfolio tracking and a seemingly
endless array of news and research. And the number of sites
keeps growing: by some counts, there are now 15,000 devoted to
personal finance, making it a close runner-up to sex as
the most popular Web category.
Amid so much financial advice, many of the newest sites are
trying to differentiate themselves by zeroing in on specific
investment subjects, narrow strategies and esoteric tools.
"These sites are proliferating wildly," said Robert F.
Sterling, an analyst at Jupiter Communications. "We're seeing people
coming in all the time with new niche plays and new ideas. They're
addressing smaller needs to try and target their marketing."
The surge has created something of a cottage industry as companies
vie to track the various sites. One of the largest,
Investorama, has links to more than 14,000 sites and
plans to add 1,800 links soon, said the founder, Doug Gerlach.
OnlineInvestor, a monthly print magazine based in Oak Brook,
Ill., includes scores of site reviews in each issue; in its first year
and a half, it has offered more than 500. "In a typical month, I learn
about 75 new sites; a year ago, that number was maybe 20," said
Jan Parr, the magazine's editor. Practically all the new sites
are niche players.
Here is a sampling of some recent offerings:
-- Epredict.com. Using the type of polling more commonly
associated with political races, the site surveys visitors on their
feelings about specific stocks. Anyone who fills out the
multiple-choice survey receives the results of the poll the next day
via e-mail. Eventually, the site hopes to use its visitors' collective
wisdom to start a mutual fund, said John Kaminski, Epredict's vice
president for business development.
-- Gainskeeper.com. Focusing on one of the biggest problems
for active traders -- completing Schedule D, the federal tax form for
capital gains and losses -- the site helps track holdings and their
associated tax implications. Investors enter their holdings on a
secure site that is updated daily. One of the site's biggest selling
points is that it keeps track of stock splits and other corporate
actions, a niche service with which other sites have struggled.
"You can't do this with software," said Duncan Routh, co-founder of
the site. "You have to have a staff that's capable of analyzing each
-- IExchange.com. On this site, amateur analysts can offer
written research, available for purchase, on a variety of stocks. The
better their track record, the higher the price the analysts can
charge, though most reports cost $3 or less. Contributors are asked to
submit a target price for each stock; most also explain the reasoning
behind their picks. IExchange tracks the performance, paying cash
rewards for top picks and splitting proceeds from the research sales.
-- Validea.com. This site tracks the records of professional
stock pickers and pundits, assigning ratings based on performance.
John Reese, the founder, said he created the site after poring over
various business magazines, Web sites and television programs
in search of stock tips. Investors can track analysts by name
or by publication. The site already has 50,000 recommendations in its
personal-finance Web sites can have difficulty
Already, Ms. Parr and Mr. Sterling said they had seen a number of
innovative sites fold or sell out to larger players.
"It's hard to drive revenue on these things because nobody wants to
pay for the information, and advertising revenues only go so far," Mr.
Still, both say there is room for more sites -- and they
expect their numbers to keep growing over the next few years.