Washington's calls for efficient, automated processing of over-the-counter (OTC) derivatives has grown to a clamor that vendors and Wall Street firms can't ignore. Just today, Acting Under Secretary for Domestic Finance Anthony Ryan said, "With respect to market infrastructure, we are encouraging the development of an integrated operational infrastructure for the OTC derivatives market that ensures accuracy and timeliness of trade data submission, resolution of trade matching errors, and integrated processing. We are calling for a cash settlement protocol adopted by market participants and incorporated into standard documentation, and for netting, novation and clearing of OTC derivatives contracts by a centralized counterparty."
In answer to this demand -- an echo of earlier statements made by Alan Greenspan and Ben Bernanke -- the DTCC and Markit announced today the formation of a new company that will combine Markit's front- and middle-office trade processing services with DTCC Deriv/SERV's back-office post-trade confirmation and matching services, providing a single gateway for confirming OTC derivative transactions globally. Buy-side and sell-side OTC derivative market participants will be able to confirm trades and to gain access to additional services provided by Markit and DTCC through a common portal.
Industry observers responded favorably to today's announcement. "Buy-side firms are not keen to patch together a network of internal and external communication networks and systems, and have been waiting for a major dealer-backed solution," said Denise Valentine, Aite Group senior analyst. "Two dealer-backed entities " in the form of Markit and DTCC " have responded to the buy-side demand and have created a new entity to further the cause of automation and simplification."
And analysts at the Tower Group said, "This partnership will prove to be a critical turning point in the development of a single, global operating infrastructure for the full range of OTC derivatives. The combination of Markit Wire and Deriv/SERV addresses the inefficiencies associated with the current fragmented confirmations landscape, reduces the likelihood of radical regulatory intervention, and eases the strain on industry middle and back offices. Although broker dealers may be concerned that one organization now has monopoly power in OTC confirmations, TowerGroup anticipates that the governance structure will allow the industry to continue to influence the direction of the partnership. TowerGroup expects the partnership will yield a central data repository that can be the springboard for multiple new products, such as portfolio reconciliation and collateral management services."
The new company will comprise Markit's recently acquired Markit Wire platform (formerly SwapsWire) as well as its other trade processing services such as Markit Trade Manager, Markit Tie Out and Markit PortRec. DTCC will contribute its Deriv/SERV matching and confirmation engine and its AffirmXpress, MCA Xpress and Novation Consent services. Additional services that will not become part of the new company include Markit's data and valuation services and DTCC's downstream Trade Information Warehouse, centralized settlement and payment netting services.
This initiative may accelerate the adoption of electronic processing solutions across the rapidly growing, $454 trillion OTC derivative market where approximately 50% of transactions are still confirmed on paper.
The new company will be jointly owned by DTCC and Markit, and will be governed by an 11-member board of directors. Michael Bodson, executive managing director for DTCC's business management and strategy overseeing all DTCC business lines, will be chairman of the new company. Jeff Gooch, executive vice president of Markit, will be the new company's chief executive officer.
In addition to facilitating greater industry adoption of electronic confirmation, the new company will offer automated trade affirmation, trade allocation and novation consent solutions to the market on a cross-product basis. It will initially support both DTCC's and Markit's confirmation platforms.
The new company will be headquartered in London, with a second major centre of operations in New York City and representative offices in Europe and Asia. The combined business will have over 1,100 financial institutions as customers and annual transaction volumes of over 7 million across the OTC interest rate, credit and equity derivative markets.
The DTCC-Markit agreement will become effective following completion of due diligence, regulatory filings and approval by relevant global regulators, including those in the U.K. and U.S. The name of the new company will be announced at a later date.
Tuesday, July 29, 2008
NYSE Brokers to Receive Algo Trading Software
Pragma Financial Systems announced today that it has partnered with NYSE Euronext to provide algorithmic trading tools to New York Stock Exchange floor brokers.
This will mark the first time the NYSE community has algorithmic execution tools available on the trading floor.
The partnership is the latest in a series of moves by NYSE Euronext to provide the floor community with technology suited to better compete in an increasingly electronic national marking system. This step is intended to help NYSE Euronext's distinctive hybrid market model to continue to support a floor presence.
The new algorithmic strategies are customizable and will trade on parity, providing brokers with the ability to match on every trade. The NYSE will gradually roll out the new algorithms during the next several weeks.
This will mark the first time the NYSE community has algorithmic execution tools available on the trading floor.
The partnership is the latest in a series of moves by NYSE Euronext to provide the floor community with technology suited to better compete in an increasingly electronic national marking system. This step is intended to help NYSE Euronext's distinctive hybrid market model to continue to support a floor presence.
The new algorithmic strategies are customizable and will trade on parity, providing brokers with the ability to match on every trade. The NYSE will gradually roll out the new algorithms during the next several weeks.
Mexican Exchange Upgrades Trading Platform
RTS Realtime Systems Group, a trading solutions provider, announced today that MexDer, the Mexican Derivatives Exchange, has selected RTS to provide the next generation front-end for its electronic trading platform.
The agreement includes distribution of trading screens to MexDer local members including market makers, brokers and clearing firms.
RTS will provide its suite of trading solutions, including the high-performance trading platform, the RTD Realtime Trading Desktop, and the white-label version of RTS' web-based front-end, eRTD.
"We have been taking enormous steps to facilitate international access to our markets," said Jorge Alegria, chief executive officer of MexDer. Our products are really benchmarks not only for Mexico, but for the Latin American region as a whole, and we believe this next generation front-end will further our global growth potential."
The agreement includes distribution of trading screens to MexDer local members including market makers, brokers and clearing firms.
RTS will provide its suite of trading solutions, including the high-performance trading platform, the RTD Realtime Trading Desktop, and the white-label version of RTS' web-based front-end, eRTD.
"We have been taking enormous steps to facilitate international access to our markets," said Jorge Alegria, chief executive officer of MexDer. Our products are really benchmarks not only for Mexico, but for the Latin American region as a whole, and we believe this next generation front-end will further our global growth potential."
Friday, July 25, 2008
Wall Street News Alert: Breaking News Alert - EENR! July 23, 2008
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NOTE TO EDITORS: The Following Is an Investment Opinion Being Issued by Wall Street Capital Funding.
WESTON, FL -- (MARKET WIRE) -- 07/23/08 -- Wall Street News Alert's "stocks to watch" this morning are: Exterra Energy Incorporated (EENR), Microsoft (MSFT), Exxon Mobil Corporation (XOM) and Chesapeake Energy Corporation (CHK).
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Exterra Energy Inc. (EENR) has just issued positive news and investors looking to possibly benefit from the energy sector should continue monitoring the stock closely! Yesterday after the markets closed, the company issued a press release announcing the successful fracture stimulation of the RSK-Star #6 well on June 18, 2008.
This good news for the company! According to the press release, on June 24th, the well commenced gas sales at 550 Mcf per day on a 24/64" choke. Production flow is up the casing due to tubing shortages. As of July 21st, gas sales have stabilized at approximately 320 Mcf per day with a flowing casing pressure of 350 psi on a 30/64" choke. The installation of production tubing is planned which will allow the continued recovery of frac fluids and enhance the daily gas rates.
Exterra Energy owns a 21.1% Working Interest (15.61% Net Revenue Interest) in the RSK-Star #6. The RSK-Star lease consists of 264.9 acres with six (6) producing Barnett Shale gas wells. Exterra owns varying working interest in each of those six producing wells. Three (3) additional Barnett Shale drill sites have been identified, which were delineated by a 3D seismic survey over the acreage.
"The successful fracing of the RSK-Star#6 well is a key component of Exterra's continued operations within the core area of the North Texas Barnet Shale gas field," stated CEO John Punzo. "The Barnett Shale gas field is undoubtedly one of the largest producing gas fields in the continental U.S. today, and Exterra is committed to developing and expanding its acreage and assets within the core area of the field."
Investors are urged to continue to monitor the progress of the company!
The stock closed Tuesday at Thirty cents a share.
For Wall Street News Alert's in-depth profile of Exterra Energy Inc., visit http://www.WallStreetNewsAlert.com/HotStocks/EENR072208/default.aspx.
Microsoft (MSFT) up 0.6% on 88.6 million shares traded. Founded in 1975, Microsoft is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.
Exxon Mobil Corporation (XOM) down 0.1% on 27.9 million shares traded. Exxon Mobil Corporation engages in the exploration, production, transportation and sale of crude oil and natural gas.
Chesapeake Energy Corporation (CHK) down 8.4% on 28.2 million shares traded. Chesapeake Energy Corporation is the third-largest producer of natural gas in the U.S. Headquartered in Oklahoma City, the company's operations are focused on exploratory and developmental drilling and corporate and property acquisitions in the Fort Worth Barnett Shale, Fayetteville Shale, Haynesville Shale, Mid-Continent, Appalachian Basin, Permian Basin, Delaware Basin, South Texas, Texas Gulf Coast and Ark-La-Tex regions of the United States.
Market Commentary:
"Crude's decline weighed on gold prices Tuesday, with the August contract falling $17.20 to $946.50 an ounce on the New York Mercantile Exchange after earlier dipping to $942.10," stated Sonja Rudd in Wall Street News Alert's daily commentary continued at: http://www.WallStreetNewsAlert.com.
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Microsoft Announces Reorganization of Windows and Online Services Business
REDMOND, Wash., July 23 /PRNewswire-FirstCall/ -- Microsoft Corp. today announced that the Platforms & Services Division (PSD) will be split into two groups: Windows/Windows Live and Online Services, with both groups reporting directly to CEO Steve Ballmer. Microsoft also announced that PSD President Kevin Johnson will be leaving the company. Johnson will work to ensure a smooth transition.
(Logo: http://www.newscom.com/cgi-bin/prnh/20000822/MSFTLOGO)
"Kevin has built a supremely talented organization and laid the foundation for the future success of Windows and our Online Services Business. This new structure will give us more agility and focus in two very competitive arenas," Ballmer said. "It has been a pleasure to work with Kevin, and we wish him well in the future."
Effective immediately, senior vice presidents Steven Sinofsky, Jon DeVaan and Bill Veghte will report directly to Ballmer to lead Windows/Windows Live. The Windows organization recently announced strong annual sales, with more than 180 million copies of Windows Vista sold globally, and it has driven more than 100 million installs of its Windows Live suite. The organization's innovation pipeline includes a new version of Windows Internet Explorer, the next version of Windows and the next generation of the Windows Live product suite.
In the Online Services Business, Microsoft will create a new senior lead position and will conduct a search that will span internal and external candidates. In the meantime, Senior Vice President Satya Nadella will continue to lead Microsoft's search, MSN and ad platform engineering efforts. Microsoft recently announced a strategy to redefine search through innovations in the user experience and business models. As an example, the company's cashback search program, announced in May, is already generating strong momentum among online shoppers and advertisers.
In addition, Senior Vice President Brian McAndrews will continue to lead the Advertiser & Publisher Solutions Group (APS). APS has great momentum, having signed more than 100 new publisher deals in the past year. McAndrews will continue to focus on the display advertising opportunity for Microsoft, driving execution and integration of advertising assets, including recent acquisitions such as Massive Inc., Navic Networks, ScreenTonic SA and YaData Ltd.
"Our Windows business is firing on all cylinders," Ballmer said. "We see tremendous opportunity in search and advertising, and we have a clear strategy for investing in success today and growth in the future."
"Microsoft is a special place and presents opportunity to so many," Johnson said. "I have been so fortunate to have experienced 16 amazing years of building Microsoft's business, learning from great leaders in the company and working with phenomenally talented people."
Founded in 1975, Microsoft (MSFT) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.
SOURCE Microsoft Corp.
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Caption Writer: KS
Industry Moves: Vibrant Media Staffs Up, 4DS Restructures
Vibrant: Vibrant Media, ad ad company responsible for those double-underlined in-line text ads, has hired Microsoft (NSDQ: MSFT) Advertising’s Jonathan Baron to be its new international sales VP and Google’s (NSDQ: GOOG) Carl Jordan to be its new European director of publishing solutions. The firm, which also does video ads, said it doubled its London staff in the last six month to service a growing Russian, eastern European and Asian market.
-- 4DS: Matt Gower, head of Channel 4’s team that sells ads across third-party websites, is leaving to set up his own venture as part of a restructure. Rather logically, C4 is merging 4DS with the team that sells online ads on its own sites, with the new team to be headed by new media advertising Errol Baran
Mossberg On MobileMe: Too Flawed To Recommend; Pogue: Apple Doesn’t Have A Clue
Forget the launch woes ... Walt Mossberg has spent the last week testing Apple’s (NSDQ: AAPL) new MobileMe service and finds it so flawed he can’t recommend it as is. In his weekly column, Mossberg writes: “It’s a great idea, but, as of now, MobileMe has too many flaws to keep its promises.”
The server overload and email outages that marred the launch have “eased considerably” but these problems are “systemic.” MobileMe, viewed here as a possible killer app, is supposed to support syncing email, bookmarks, calendar info and address books on multiple computers, the iPhone and the iTouch via Mac or Windows. But it didn’t work that way for Mossberg; see the column for details like disappearing email, unsynced bookmarks, missing contact info and more.
His conclusion: “Apple patiently explained each of my problems, sometimes helping me with workarounds, sometimes claiming they were rare, other times saying that it was working on fixes. If Apple does get MobileMe working smoothly, it could be a terrific service. But it’s way too ragged now.”
Sounds like killer-app status is still in the distance.
Update: Not matter how MobileMe turns out, Apple has lost some of its customer service mojo and product launch cred…
More after the jump, including Mossberg’s MobileMe video
David Pogue’s MobileMe is working just fine now—except for that small lack of the promised instant syncing—but he’s taking Apple to task for the way it’s treating those who are having problems (like the woman whose entire email archives were wiped out of multiple locations with Apple able to only recover 43 messages) and for the way it’s handled the whole mess: “But the real problem is how Apple is responding. For a company that’s so brilliant at marketing, it seems to have absolutely no clue about crisis management.” He reports on the limited “official statement” from PR and the terse online notice about problems.
Pogue’s conclusion: “It’s amazing that Apple doesn’t recognize this situation. This is an airplane that’s stuck on the runway for hours with no food or working bathroom. And the pilot doesn’t come on the P.A. system to tell the customers what the problem is, what’s being done to fix it, how much longer they might be stuck, and how he empathizes with their plight. Instead, he comes on once every three hours to repeat the same thing: ‘We apologize for the inconvenience.’ MobileMess, indeed.”
The server overload and email outages that marred the launch have “eased considerably” but these problems are “systemic.” MobileMe, viewed here as a possible killer app, is supposed to support syncing email, bookmarks, calendar info and address books on multiple computers, the iPhone and the iTouch via Mac or Windows. But it didn’t work that way for Mossberg; see the column for details like disappearing email, unsynced bookmarks, missing contact info and more.
His conclusion: “Apple patiently explained each of my problems, sometimes helping me with workarounds, sometimes claiming they were rare, other times saying that it was working on fixes. If Apple does get MobileMe working smoothly, it could be a terrific service. But it’s way too ragged now.”
Sounds like killer-app status is still in the distance.
Update: Not matter how MobileMe turns out, Apple has lost some of its customer service mojo and product launch cred…
More after the jump, including Mossberg’s MobileMe video
David Pogue’s MobileMe is working just fine now—except for that small lack of the promised instant syncing—but he’s taking Apple to task for the way it’s treating those who are having problems (like the woman whose entire email archives were wiped out of multiple locations with Apple able to only recover 43 messages) and for the way it’s handled the whole mess: “But the real problem is how Apple is responding. For a company that’s so brilliant at marketing, it seems to have absolutely no clue about crisis management.” He reports on the limited “official statement” from PR and the terse online notice about problems.
Pogue’s conclusion: “It’s amazing that Apple doesn’t recognize this situation. This is an airplane that’s stuck on the runway for hours with no food or working bathroom. And the pilot doesn’t come on the P.A. system to tell the customers what the problem is, what’s being done to fix it, how much longer they might be stuck, and how he empathizes with their plight. Instead, he comes on once every three hours to repeat the same thing: ‘We apologize for the inconvenience.’ MobileMess, indeed.”
Media Digest 7/25/2008 Reuters, WSJ, NYTimes, FT, Bloomberg
According to Reuters, Microsoft (MSFT) backed its internet spending plan and said it was done with negotiations with Yahoo! (YHOO).
Reuters reports that the CFO of Wachovia (WB) is leaving.
Reuters reports that Honda (HMC) posted a surprise profit gain.
The Wall Street Journal writes that shareholders of Cleveland-Cliffs wan the company put up for sale.
The Wall Street Journal writes that NY State filed fraud charges against UBS (UBS) for its marketing practices for auction-rate securities.
The Wall Street Journal says the ad industry expects cuts in auto and financial spending.
The Wall Street Journal writes that Vonage (VG) will bring in a new CEO as it nears a re-financing.
The Wall Street Journal reports that the Nokia (NOK) settlement with Qualcomm (QCOM) may lead to a similar settlement between the chip company and rival Broadcom (BRCM)
The New York Times reports that Microsoft will expand its ad sales deal with Facebook.
The FT writes that US financial stocks suffered their largest one-day decline since 2000.
The FT reports that Wal-Mart (WMT) has entered into labor agreeements with two Chinese unions.
Bloomberg reports that about half of Ford's (F) products will be based on Mazdo designs by 2010.
Facebook retools for growth spurt
Facebook chief executive Mark Zuckerberg stood before a roomful of software developers Wednesday and told them what they wanted to hear: The social networking giant hopes to hit the 100 million-user mark by the end of the year and plans to extend its reach even more by expanding overseas.
Thousands of developers, innovators and investors gathered at the company's second annual developers conference hoping to leverage the site's growing popularity, which has picked up steam since Facebook opened its platform to independent developers last year.
Since then, the company estimates that it has collaborated with more than 400,000 developers in more than 160 nations, resulting in tens of thousands of tools and widgets that populate its Web pages.
That's not to say all is perfect with the company, whose Net-based software allows users to create a personal Web page through which they can communicate with friends and acquaintances. Some of those new software applications, layered on top of Facebook's own service, have raised privacy concerns, as well as questions about the company's ability to generate advertising dollars.
"I'm the first to admit that we made a lot of mistakes and there are a lot of things we have to learn," Zuckerberg said. "Including how to work more closely with developers and how to make sure applications that provide the most long-term value are going to work best in our ecosystem."
Earlier this week, Facebook redesigned its site, while developers were handed a new set of rules designed to thwart spammers and encourage the growth of applications that are useful and meaningful. In that same vein, Zuckerberg said Wednesday, the company will make it easier for developers to translate their applications into dozens of languages across the globe.
The centerpiece of this year's event is new technology called Facebook Connect, which lets users upload their personal information, photos and network of friends from Facebook to other Web sites. It will become available to users in autumn.
The new service represents a trend of sorts among social-networking companies, which are looking for ways to spread their influence past their own domains.
"The wall of curtains are starting to disappear," said David Recordon of Six Apart, a blogging platform based in San Francisco, which is one of the first companies, along with news site Digg and regional guide Citysearch, to use Facebook Connect. "With Google's OpenSocial and now Facebook Connect, we are seeing that they are looking for ways when social networks are no longer separated."
In other news, Facebook said it plans to reward applications that help users share information and connect in a meaningful way. Developers will be able to compete for "great apps" nominations starting next month.
And the company said it has created a system of branding Facebook apps as trustworthy to let people know which ones are safe to use.
"When we look back at the last year, we have gotten a lot done," Zuckerberg said. "We've advanced a lot toward building a meaningful social platform and a community."
As it turns 10, what will MarketWatch's future be under Murdoch?
Larry Kramer has made the transition from newspaper editor to new media maven, but that wasn't why Rupert Murdoch wanted to have lunch with him two months ago.
The Australian media mogul had a specific question in mind: What should he do with MarketWatch?
The San Francisco financial news Web site that Kramer had co-founded 10 years ago this month is about to become part of Murdoch's News Corp., as part of the deal announced in August in which News Corp. is acquiring Dow Jones and Co. for $5.6 billion. Dow Jones snapped up MarketWatch for $528 million in January 2005, outbidding the New York Times Co.
MarketWatch doesn't get quite the attention that more high-profile parts of the deal are receiving, like what Murdoch might have in mind for the Wall Street Journal, or how his Fox Business Channel, which makes its cable television premiere this week, will utilize the assets of Dow Jones.
But MarketWatch, with 5.3 million monthly unique users who spend an average 22 minutes on the site, according to Nielsen NetRatings, is a powerful online brand that Kramer thinks could soar to new heights when combined with News Corp.'s other assets.
"I told him that it belonged more associated with the new television network he's starting than the Wall Street Journal," Kramer said. "MarketWatch works well in any kind of real-time environment, whether it's the Internet, television or radio. It's the perfect partner for his all-news financial channel, where you're updating all the time.
"If I was him, I would take MarketWatch out from under Dow Jones and make it the Web site for the Fox Business Channel."
That's not going to happen, at least not in the short run. Fox Business Channel started its Web site Oct. 1, and it does not yet have control over MarketWatch or other Dow Jones assets. Officials for News Corp. and for Dow Jones said they could not discuss MarketWatch's future because they can't comment until the deal actually closes. The merger is expected to close this year.
"There have been a few 'get to know you' meetings," said David Callaway, MarketWatch's editor in chief, but News Corp. "can't make changes until the acquisition closes."
"We've always had an ability to work with other media partners," Callaway said, noting that MarketWatch's investors in the past have included CBS and the Financial Times, and it has also worked with Agence France-Presse, Thomson Financial and now Dow Jones. "In terms of opportunity, there's a world full of News Corp. assets out there that we can work to support and complement."
Another key question hanging over MarketWatch as News Corp. ownership inches closer is what might happen to the site if Murdoch decides, as has been rumored, to stop charging readers for access to the Wall Street Journal's Web site. The site, at www.wsj.com, has been one of the few successful media properties on the Web to charge for its content, with roughly 1 million subscribers paying $49 to $99 per year.
But growth for the site has slowed and may have even reached a plateau, according to Rafat Ali, editor and CEO of PaidContent.org, a site in Santa Monica that covers the online media industry. As online advertising continues to soar, it might make sense for News Corp. to open WSJ.com to the wide Web, and get the higher ad rates a larger audience would command.
"If WSJ.com becomes open, then it's a very valid question: 'What's the future of MarketWatch?' " Ali said. "For me, just as an observer, I will guess that they will bite the bullet and become part of WSJ.com if WSJ becomes free. It could be WSJ.MarketWatch.com. It was CBS.MarketWatch.com" in its early days."
MarketWatch had its roots in San Mateo's Data Broadcasting Corp., established in 1992. Kramer, former editor of the San Francisco Examiner (owned at the time by Hearst Corp., which now owns The Chronicle), one of his former business columnists, Thom Calandra, and Bill Bishop, who handled business development, got the business running.
When they struck a deal with CBS Corp. to rename the site CBS.MarketWatch.com on Oct. 30, 1997, a Web star was born.
MarketWatch's chief rival in those days was TheStreet.com, a paid site in New York founded by hedge fund manager Jim Cramer, who has gone on to fame as the manic star of CNBC's "Mad Money." The idea behind both sites was to use the Internet to deliver real-time financial information - previously available only to Wall Street professionals - to the investing masses.
In January 1999, near the height of dot-com fever, MarketWatch had a stratospheric initial public offering, with the stock soaring on opening day from $17 to $97.50, the second-biggest opening day gain in U.S. history at that time.
"TheGlobe.com was bigger," said Callaway, reflecting the insanity of the times.
But MarketWatch was able to survive, thanks in part to a hybrid model that many other dot-coms lacked. Although its news was dependent on online advertising, it had a steady revenue stream from licensed content, both by selling its news stories to other outlets and by making stock charts from its BigCharts.com unit available for a fee.
"When the ad market cratered after 9/11, we had a nice diversified revenue base that allowed us to weather that part of the storm," said Jim Bernard, MarketWatch's general manager. Bernard joined the company in the BigCharts deal and remains in Minneapolis, where BigCharts was founded.
"What's remarkable about MarketWatch is how little the original mission has changed since it was conceived," he said.
MarketWatch maintains a staff of about 100 journalists, mostly in San Francisco and New York, but also in five domestic and three international bureaus.
It weathered a journalistic crisis when Calandra resigned in January 2004, after failing to properly disclose the buying and selling of stocks he recommended. Calandra settled with the SEC in 2005. He has now fictionalized his experiences in a novel due out in book form in the spring, "Pablo by Numbers."
Ali, at PaidContent, says MarketWatch has languished since joining Dow Jones, as top executives like Kramer and President Kathy Yates have left. (Kramer is on PaidContent's board.) "At this point, MarketWatch is in an identity crisis," he said. "Everything has been in a holding pattern."
Things have started picking up in the past six months, he said, and he praised MarketWatch's video efforts. The company said it has contributed to a 70 percent increase from July to August in video traffic across all Dow Jones Web sites.
Ali also praised MarketWatch's "community tools" initiative, an effort to harness its audience in a way that's become popular on sites using the Web 2.0 rubrics of sharing and social networking. "We're opening up our site to giving our readers a voice," general manager Bernard said. The site hopes to aggregate the readers' comments to see if some deeper, more useful information can be gleaned.
Such initiatives are typical of MarketWatch's role in Dow Jones, according to Dow Jones spokeswoman Christine Mohan. "Its culture has always been very innovative," Mohan said. "They're always trying new things. We think of them as our think tank, almost as a Skunk Works."
It remains to be seen whether Murdoch will think of MarketWatch in the same way.
The Australian media mogul had a specific question in mind: What should he do with MarketWatch?
The San Francisco financial news Web site that Kramer had co-founded 10 years ago this month is about to become part of Murdoch's News Corp., as part of the deal announced in August in which News Corp. is acquiring Dow Jones and Co. for $5.6 billion. Dow Jones snapped up MarketWatch for $528 million in January 2005, outbidding the New York Times Co.
MarketWatch doesn't get quite the attention that more high-profile parts of the deal are receiving, like what Murdoch might have in mind for the Wall Street Journal, or how his Fox Business Channel, which makes its cable television premiere this week, will utilize the assets of Dow Jones.
But MarketWatch, with 5.3 million monthly unique users who spend an average 22 minutes on the site, according to Nielsen NetRatings, is a powerful online brand that Kramer thinks could soar to new heights when combined with News Corp.'s other assets.
"I told him that it belonged more associated with the new television network he's starting than the Wall Street Journal," Kramer said. "MarketWatch works well in any kind of real-time environment, whether it's the Internet, television or radio. It's the perfect partner for his all-news financial channel, where you're updating all the time.
"If I was him, I would take MarketWatch out from under Dow Jones and make it the Web site for the Fox Business Channel."
That's not going to happen, at least not in the short run. Fox Business Channel started its Web site Oct. 1, and it does not yet have control over MarketWatch or other Dow Jones assets. Officials for News Corp. and for Dow Jones said they could not discuss MarketWatch's future because they can't comment until the deal actually closes. The merger is expected to close this year.
"There have been a few 'get to know you' meetings," said David Callaway, MarketWatch's editor in chief, but News Corp. "can't make changes until the acquisition closes."
"We've always had an ability to work with other media partners," Callaway said, noting that MarketWatch's investors in the past have included CBS and the Financial Times, and it has also worked with Agence France-Presse, Thomson Financial and now Dow Jones. "In terms of opportunity, there's a world full of News Corp. assets out there that we can work to support and complement."
Another key question hanging over MarketWatch as News Corp. ownership inches closer is what might happen to the site if Murdoch decides, as has been rumored, to stop charging readers for access to the Wall Street Journal's Web site. The site, at www.wsj.com, has been one of the few successful media properties on the Web to charge for its content, with roughly 1 million subscribers paying $49 to $99 per year.
But growth for the site has slowed and may have even reached a plateau, according to Rafat Ali, editor and CEO of PaidContent.org, a site in Santa Monica that covers the online media industry. As online advertising continues to soar, it might make sense for News Corp. to open WSJ.com to the wide Web, and get the higher ad rates a larger audience would command.
"If WSJ.com becomes open, then it's a very valid question: 'What's the future of MarketWatch?' " Ali said. "For me, just as an observer, I will guess that they will bite the bullet and become part of WSJ.com if WSJ becomes free. It could be WSJ.MarketWatch.com. It was CBS.MarketWatch.com" in its early days."
MarketWatch had its roots in San Mateo's Data Broadcasting Corp., established in 1992. Kramer, former editor of the San Francisco Examiner (owned at the time by Hearst Corp., which now owns The Chronicle), one of his former business columnists, Thom Calandra, and Bill Bishop, who handled business development, got the business running.
When they struck a deal with CBS Corp. to rename the site CBS.MarketWatch.com on Oct. 30, 1997, a Web star was born.
MarketWatch's chief rival in those days was TheStreet.com, a paid site in New York founded by hedge fund manager Jim Cramer, who has gone on to fame as the manic star of CNBC's "Mad Money." The idea behind both sites was to use the Internet to deliver real-time financial information - previously available only to Wall Street professionals - to the investing masses.
In January 1999, near the height of dot-com fever, MarketWatch had a stratospheric initial public offering, with the stock soaring on opening day from $17 to $97.50, the second-biggest opening day gain in U.S. history at that time.
"TheGlobe.com was bigger," said Callaway, reflecting the insanity of the times.
But MarketWatch was able to survive, thanks in part to a hybrid model that many other dot-coms lacked. Although its news was dependent on online advertising, it had a steady revenue stream from licensed content, both by selling its news stories to other outlets and by making stock charts from its BigCharts.com unit available for a fee.
"When the ad market cratered after 9/11, we had a nice diversified revenue base that allowed us to weather that part of the storm," said Jim Bernard, MarketWatch's general manager. Bernard joined the company in the BigCharts deal and remains in Minneapolis, where BigCharts was founded.
"What's remarkable about MarketWatch is how little the original mission has changed since it was conceived," he said.
MarketWatch maintains a staff of about 100 journalists, mostly in San Francisco and New York, but also in five domestic and three international bureaus.
It weathered a journalistic crisis when Calandra resigned in January 2004, after failing to properly disclose the buying and selling of stocks he recommended. Calandra settled with the SEC in 2005. He has now fictionalized his experiences in a novel due out in book form in the spring, "Pablo by Numbers."
Ali, at PaidContent, says MarketWatch has languished since joining Dow Jones, as top executives like Kramer and President Kathy Yates have left. (Kramer is on PaidContent's board.) "At this point, MarketWatch is in an identity crisis," he said. "Everything has been in a holding pattern."
Things have started picking up in the past six months, he said, and he praised MarketWatch's video efforts. The company said it has contributed to a 70 percent increase from July to August in video traffic across all Dow Jones Web sites.
Ali also praised MarketWatch's "community tools" initiative, an effort to harness its audience in a way that's become popular on sites using the Web 2.0 rubrics of sharing and social networking. "We're opening up our site to giving our readers a voice," general manager Bernard said. The site hopes to aggregate the readers' comments to see if some deeper, more useful information can be gleaned.
Such initiatives are typical of MarketWatch's role in Dow Jones, according to Dow Jones spokeswoman Christine Mohan. "Its culture has always been very innovative," Mohan said. "They're always trying new things. We think of them as our think tank, almost as a Skunk Works."
It remains to be seen whether Murdoch will think of MarketWatch in the same way.
Assessing Marketwatch’s future as a News Corp. subsidiary
Dan Fost of the San Francisco Chronicle looks at business news website Marketwatch as it celebrates its 10th anniversary and is part of the deal where News Corp. CEO Rupert Murdoch is acquiring Dow Jones & Co., its parent.
MarketwatchFost wrote, “Ali, at PaidContent, says MarketWatch has languished since joining Dow Jones, as top executives like Kramer and President Kathy Yates have left. (Kramer is on PaidContent’s board.) ‘At this point, MarketWatch is in an identity crisis,’ he said. ‘Everything has been in a holding pattern.’
“Things have started picking up in the past six months, he said, and he praised MarketWatch’s video efforts. The company said it has contributed to a 70 percent increase from July to August in video traffic across all Dow Jones Web sites.
“Ali also praised MarketWatch’s ‘community tools’ initiative, an effort to harness its audience in a way that’s become popular on sites using the Web 2.0 rubrics of sharing and social networking. ‘We’re opening up our site to giving our readers a voice,’ general manager Bernard said. The site hopes to aggregate the readers’ comments to see if some deeper, more useful information can be gleaned.
“Such initiatives are typical of MarketWatch’s role in Dow Jones, according to Dow Jones spokeswoman Christine Mohan. ‘Its culture has always been very innovative,’ Mohan said. ‘They’re always trying new things. We think of them as our think tank, almost as a Skunk Works.’”
MarketwatchFost wrote, “Ali, at PaidContent, says MarketWatch has languished since joining Dow Jones, as top executives like Kramer and President Kathy Yates have left. (Kramer is on PaidContent’s board.) ‘At this point, MarketWatch is in an identity crisis,’ he said. ‘Everything has been in a holding pattern.’
“Things have started picking up in the past six months, he said, and he praised MarketWatch’s video efforts. The company said it has contributed to a 70 percent increase from July to August in video traffic across all Dow Jones Web sites.
“Ali also praised MarketWatch’s ‘community tools’ initiative, an effort to harness its audience in a way that’s become popular on sites using the Web 2.0 rubrics of sharing and social networking. ‘We’re opening up our site to giving our readers a voice,’ general manager Bernard said. The site hopes to aggregate the readers’ comments to see if some deeper, more useful information can be gleaned.
“Such initiatives are typical of MarketWatch’s role in Dow Jones, according to Dow Jones spokeswoman Christine Mohan. ‘Its culture has always been very innovative,’ Mohan said. ‘They’re always trying new things. We think of them as our think tank, almost as a Skunk Works.’”
Standard & Poor’s Launches Global Backtest Database
In response to demand for a tool that lets analysts conduct investment simulations based on international data at a client-specified date, Standard & Poor's Compustat is rolling out Compustat Snapshot, a backtest database of financial information on companies outside the U.S. and Canada. This new database lets quants extend the scope of their historical analysis and long-term backtesting models to international markets and enables more precise investment simulation by delivering a clear picture of reported data at a requested observation date.
Unlike a traditional global database, Compustat Snapshot contains all values obtained in the database production process -- original and changed data -- and shows a complete history, simplifying the process of re-creating investment scenarios, according to Standard & Poor's. Compustat Snapshot enables the development of scenarios that simulate actual international investment environments because it captures preliminary and final data when it becomes available. Compustat Snapshot also makes it possible to identify what item valued changed and when it changed. Modifications to corporate action information, such as company name, domicile and address changes, as well as exchange changes, can also be applied.
"There is an ever-increasing need for deep historical global data. Compustat Snapshot lets backtesters extend the reach of their historical models and conduct analysis beyond traditional borders," said Mitch Abeyta, managing director, Standard & Poor's Compustat. "This new database enables users to incorporate monthly snapshots of data into their models, thereby allowing understanding of what the market knew at a particular date and time. It also permits the factoring out of look-ahead bias and reduces lag assumptions with respect to international markets."
S&P says this is the first-ever international backtester By Penny Crosman
July 22, 2008
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