“Investing is hard.” (Abnormal Returns)
“Investment blogging is difficult.” (Abnormal Returns)
You would think, by transitive properties, that investment blog aggregation would also be difficult. But the idea floating around of late that aggregation, including investment blog aggregation, is easy. Especially if you read the Dilbert comic below.
(And please don’t send this to the BusinessInsider guys who have had this strip sent to them one too many times.)
News aggregators may be high profile targets at the moment, but the art of aggregation is not easy. paidContent.org reported today that the New York Times is going stop its aggregation feature Times Extra at the end of the month. The Times reportedly wants to stay in the aggregation business, just with a different model.
There are at least two big reasons why aggregation has come under such scrutiny of late. The first is the campaign by Rupert Murdoch of News Corp., owner of many online news sites including WSJ.com, to somehow extract payment from aggregators, including Google, for access to his online properties. Mike Masnik at TechDirt notes the hypocrisy in this by citing many examples of News Corp. site engaging in aggregation themselves.
The second reason is that aggregation has become increasingly high profile as it yields successful business models on the Internet. A quick look at the list of the twenty-five most valuable blogs at 24/7 Wall St. shows a number of them aggregate content whether in whole or in part as a part of their business model. The Huffington Post which is in which has taken flak as a news aggregator shows up at #2 on the list.
A common denominator among the blogs on that list is a steady stream of posts during the day. The business models of these sites is dependent on a large number of unique visitors and page views. Common ways to do this is to generate controversy, break news or aggregate content. Some of these very sites, including The Huffington Post, have come under fire for the way they aggregate content.
The same is true in the investment blogosphere where two investment sites Seeking Alpha #11 and The Business Insider #16 make an appearance on the list of most valuable blogs. Mebane Faber at World Beta recently did an analysis to find out what it takes to be a popular investment blogger. An examination of popular investment blogs shows a high correlation between the number of posts and site visits. This finding is not all that surprising to us given our earlier discussion of what it takes to be an A-list blogger. However, the quantity of posts is not necessarily correlated with the quality of posts.
That is where a site like Abnormal Returns, amongst others, comes in, to hopefully help the reader cull quality posts from the investment blogosphere. We have previously (and publicly) discussed the challenges of investment blog aggregation. It is interesting to note that in the time Abnormal Returns has been doing a daily linkfest not one blogger (or publisher) has asked us not to link to their articles. Indeed we are frequently asked by individual bloggers and MSM sites to link to their work.
One legitimate fear is that news gathering will suffer in this new age because of a lack of support. Fortunately we are already seeing some innovation in the news gathering model. For instance the Chicago News Cooperative has been formed as a for-profit/non-profit hybrid to generate news content about the Chicagoland area.
The popularity of these aggregation sites should serve not as a irritant to the mainstream media sites but should spur them to re-think their own business models. There certainly are some sites out there that take liberties with the notion of “fair use” to pad their page views. That point aside, the heart of the matter is that readers look to these sites to help them make sense of the (investment) world.
The flood of information facing us as we visit the Internet each day can be intimidating. That notion of information overload is not new. Umberto Eco in an interview appearing at Spiegel Online discusses how human beings have been using lists to try and make sense of the world for quite some time. Eco states:
The list is the origin of culture. It’s part of the history of art and literature. What does culture want? To make infinity comprehensible. It also wants to create order — not always, but often. And how, as a human being, does one face infinity? How does one attempt to grasp the incomprehensible? Through lists, through catalogs, through collections in museums and through encyclopedias and dictionaries.
Eco goes on to discusses how in the age of Google algorithmically derived lists are potentially dangerous. The challenge for the user is how to discriminate amongst the many results of a search.
Some may argue we are stretching to equate the generation of lists in art and culture with news aggregation. However the goals are the same. A human editor curating posts is trying to help the reader navigate their information flow. In short to try and make the the world we live in a little bit more comprehensible.
Aggregators, investment or otherwise, are not the cause of the downfall of traditional news gatherers like newspapers. They are simply a sign that people are hungry for information and analysis presented in an efficient manner. For better or worse, that instinct to seek out order in an increasingly complex world is here to stay.