Post of the Day
June 25, 1999

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Subject: TSCM > DJ
Author: goldilong

I work for a prominent vendor of financial data. Our customers are institutional money managers and corporate finance/IR departments that pay big bucks ($1000's/month/user) for access to our service. We broadcast mostly across dedicated circuits, and it is a real-time situation. Our users need this info now, and they need it reliably. They need to read it before Maria Bartiromo reports it on CNBC.

When a client has technical problems, we go to great length to correct them ASAP. No expense is spared - equipment and technicians are sent all over the country immediately to get them up and running. We must do this, because a service that is constantly down is competing with too many substantially similar services to get away with lax support.

We operate a web site as well. At this point, very few of our users rely on the web site to obtain the information we provide. Now, my company has tremendous resources - money, staff, etc - yet despite this fact we have experienced periods as long as 1 week where the web site was down. Imagine that - $1000's for a service you can't even access that is providing essential information upon which you make critical business decisions!

"In the area of financial journalism, the web is not only a cheaper way to operate, it is an inherently far superior way."

Cramer recently wrote an article about barriers to entry on the web. We have recently seen a smattering of non-web web IPO's, issues of pseudo-web stocks by bricks & mortar retailers and the like. When investors or analysts talk about relative valuations, as I heard one analyst do soon after TSCM came out, they are treading on very thin ice.

TSCM should probably be afforded a market cap equal to Dow Jones (DJ). I say this seriously. Cramer has explained in the past why the economics of publishing online are patently superior to publishing a dead-wood daily/weekly/monthly. Why the business model allows for creation of superior content (more frequent, better writers, etc). In the area of financial journalism, the web is not only a cheaper way to operate, it is an inherently far superior way. Much of finance coverage is better suited for text, graphs, etc that the web is perfect for. Sound is really unnecessary. Static is certainly a hindrance. TSCM is first to market with a site devoted to nearly real-time coverage of financial markets with a trader's perspective. No stories on politics or marketing products or such. Pure-play trader's newspaper online. I wonder how many people who subscribe to the Urinal are only interested in the markets and not really in issues for business managers?

The web, with its tremendous search powers and ability to deliver in real time, will create specialist media consisting of expert entertainers/commentators/guides (the about.com model). Look at a guy like Matt Drudge. He has millions of devoted readers who not only read his articles, but link to other sites through his page. Drudge is the first case of a media information broker/commentator - a person who will hold great sway as the web becomes a morass of diamonds in the rough. Move over Tom Brokaw, hello Matt Drudge! TSCM is exactly the same thing - an entry point into the web operated by a firm that is doing a very good job of building brand.

"I can't tell you the number of Wall Street Urinals I have seen sitting unread in a company common area at 5:00pm since I started working after college."

I can't tell you the number of Wall Street Urinals I have seen sitting unread in a company common area at 5:00pm since I started working after college. I'd suggest TWSU is the most subscribed to and least read business paper out there. I mean, as far as reader penetration, I am sure more of the Urinal goes unread daily than anything else in print. I assure you that they enjoy no loyal reader base that cannot live without the Journal. They are shackled by their legacy. What happens to ad revenues when advertisers expect proof not only that ads are being read but that the right people are reading them?

I will wrap up here. My broad point is this - prior existence is a hindrance in this space. All the sclerotic habits of operating in a rapidly extincting world can only hinder a firm's ability to compete against these upstarts. When Drudge can move a nation to impeach a president when it otherwise wouldn't have, you have to see the magnitude of change. Stocks are worth tomorrow's cash flows, not yesterday's. TSCM is in position to crush DJ by offering a right-sized product (that it can charge money for) and by not being worn down by the culture of paper press.

And that "not weighed down" part has great value, I think. It matters to be a true web company. It effects how well you execute online. TSCM has never been down when I hit it, and I only pay $70/yr. My employer's customers, who pay much more, can't say the same thing.

And that is why TSCM will win and the likes of DJ will lose.