Sell-side analysis is dead, and Merrill Lynch is on record stating that investment research has been “Napster-ized.”
In 2007, DealBook explained how Merrill Lynch planned to disallow non-clients from accessing its research and put new restrictions on the media’s access to it. Merrill replaced licensing agreements that eroded the value of its written product with new arrangements that put a “fairer price on its reports.” Merrill and all other major investment banks essentially did away with their sell-side businesses. Since then, many former analysts have struck out on their own, establishing their own firms, newsletters and blogs (I detailed this phenomenon back in my post Where Does Wall Street Go From Here?).
This past week, I had a chance to meet with financial content technology firm Alacra. It was initially founded as Data Downlink Corp. in 1996 by Steven Goldstein and Michael Angle, former executives of Knight-Ridder’s Business Information Services. This week, Alacra is launching an innovative new product that definitely impressed me and proves that Alacra is willing to embrace these industry changes by using social media tools and philosophies to its advantage.
Alacra’s new product is called Pulse and is available here to try. The Pulse Platform finds, filters and packages web-based content that lets users quickly consume relevant information about a company. The Pulse Platform reads and analyzes news stories and blog posts from more than 2,000 hand-selected mainstream and alternative media feeds searching for specific types of business information. The best part is that it’s FREE. Alacra has some great plans to monetize the site and already charges for certain articles and reports. Pulse’s first offering “Street Pulse” (what is launching today) is focused on publicly traded companies and identifies and aggregates comments by traditional analysts and the alternative media so you can easily compare what’s being said by key opinion leaders about any company. Ultimately, Pulse will be comprised of four sub-products in addition to Street Pulse:
- Deal Pulse = News articles and blog posts about M&A transactions
- Weak Pulse = News articles and blog posts that highlight distressed companies, such as those announcing layoffs, filing for bankruptcy or restructuring
- Credit Pulse = Comments by rating agency and credit analysts about an issuer’s credit rating.
- Legal Pulse = Mentions of law firms
It’s been a while since I have covered a product launch, but I wanted to highlight Alacra’s efforts to embrace change and stay ahead of curve using technology; this is exactly the type of thinking and business model execution that more firms will need to adopt to help lift Wall Street back to its former status as the capital of financial innovation.
For those interested, Alacra has raised money from top tier venture firms, including Flatiron Partners (now Union Square Ventures).
