Google Finance: Yawn (Updated: Wow)

So Google finally launched the much-ballyhooed Google Finance.  Two months ago, before the bloom fell off the Google rose, this move would have been greeted with near-universal conviction that Yahoo! Finance et al had minutes to live.  Now, the reaction seems appropriately reasonable and subdued: "Nice concept, now show us how you're going to do it better."

The answer to this question, unfortunately, is not evident on the site.  The Google Finance beta landing page couldn't be less revolutionary: Market quotes and business news.  Some writers tell of stock charts with embedded explanations of price-moving events, but if so, these are nowhere in evidence.  In fact, the beta page is so spartan that, upon viewing it, a curious Yahoo! Finance user could be forgiven for wondering if his or her browser failed to load properly.  Even Google fanatics will probably scratch their heads and think, "Years in the making, and this is the best they could do?"

Which isn't to say that, eventually, Google won't figure out some cool gizmos that put Yahoo! et al to shame.  If they do, this will be good for Yahoo! users, as Yahoo! will be forced to implement them.  Whether the gizmos entice Yahoo! users to switch sites, however--and reprogram their stock portfolios, news screens, and other customized features in the process--is another question.  Based on the current beta, the answer for most Yahoo! users would probably be "no."

Bottom line, it will likely be far more difficult for Google to steal share in personal finance than it was in search.  And given Google's enormous revenue base, anything less than total market domination in personal finance would barely register on the revenue scale.  So it's not surprising that, having seen this latest beta, investors aren't falling all over themselves to get back on the Google bandwagon.

UPDATE:

After reading the first few comments here, I tried the beta again, this time typing in a couple of stock symbols.  Verdict?  Very cool charts.  Let us hope that Yahoo! has learned its lesson from the search wars and realizes that it has the equivalent of a few minutes to fix this before the finance industry switches to Google.  The beta entry page still has miles to go, as does the section's user-friendliness, but the company pages are good and the charts are great.

Terry?  David?  Jerry?  You folks listening?  Get your chart people on this immediately, or your richest, most valuable finance user base (Wall Street) will vaporize, even if the average My Yahoo user doesn't.

Sergey?  Larry?  Eric?  You folks listening?  Time to take the tiny step of adding some helpful text to your new pages.  How about welcoming the new user, helping them out a bit?  If you're going to care enough to brief the media and bloggers about your new products, how about briefing your users?  This wouldn't be selling out.

UPDATE 2:

That little "blog post" feature in Google Finance is a traffic firehose.  Here I am, bashing away (initially), and suddenly the traffic starts gushing in from the Google Finance Google page.  Business bloggers are going to love this. 

UPDATE 3:

Reader "Ben," a Wall Street analyst, weighs in with several positive thoughts about the beta, along with an explanation about why he and his colleagues are about to switch.  If folks in the Yahoo! Finance department aren't buzzing around figuring out how soon they can duplicate all this, they'd better start buzzing.  One glance at some of the charts, blog-links, etc., and you both cheer for the consumer-benefits of capitalism and wonder how on earth Yahoo!'s team could be so asleep at the switch.  It's not as though they haven't had 6-12 months of warning.

Comments

[Neal Lachman]

Kumar,

You may be convinced enough to switch, but look at it from another side -the business side. The core issue still remains whether you start clicking on ads like crazy and buy from these advertisers. In case you aren't going to, there is no real gain for Google having stolen you from Yahoo. In fact, your usage of their service is more fo a drain to their network.

[ndame]

Neal, even if they don't monetize it, they remove traffic from Yahoo and consequently remove ad revenues from Yahoo.

[Ben]

I am sorry, but I totally disagree with Neal's last point. Regardless of Google's ability to make money off of these services right now, there is definitely still a point for them to steal users away from Yahoo. The more people become accustomed to using Google for everything while at the same time using Yahoo and other sites less, the more dominant they are ultimately as an advertising company. As of now, they only truly leverage their advertising capabilities in respect to search, and frankly, that probably will remain their bread and butter (as it should!) for as long as they are a company (not to mention the fact that people using Yahoo Finance probably use Yahoo for some percentage of their search functionality, at very least if they need to do a search while on Yahoo itself…). But that fact does not prevent Google from extending their advertising model beyond simple web searches to other areas. Capturing and keeping eyes is the key to the advertising business, and taking viewers away from Yahoo and transferring them to Google pages can do nothing but help that effort on all fronts.

[Nate]

The thing that strikes me about the chart slider is that it searches out news articles years old while google news lets news more than two months old fall off the face of the earth.

[Neal Lachman]

ndame,

I guess I could have figured that out too.

But think... contrast what you said (about taking away traffic from Yahoo) to the additional costs Google makes for servicing these switching geniuses.

I think there is a trad-off here, unless Google can truly monetize this.

You should also not forget that Yahoo and MSN are going to act on this in an all-out effort. Thus, the question should be, "What earth-shattering is Google going to do that will cause everyone to switch from yahoo and the others."

The small number of people who are vocal about switching to Google do not stand for a scientific ratio or even educated estimate. They are simply being focal. Those who are not switching maybe don't have the desire to advertise that.

I am really hoping that Google will monetize this finance section. I like their charts and overview, and until Yahoo will change that I may go to Google now and then for some research. The interface, however, is much better on the yahoo landing page and the financial data pages. Given my own usage pattern, I'd say I will use Yahoo for 95% of my personal research and try or utilize Google 5%.

I Have to disclose something. I NEVER CLICK and I NEVER BUY ONLINE. I am a worthless user for Google and Yahoo. (Hope they won't track my IP and kick my butt now.)

[Neal Lachman]

Ben, there is no need to be sorry! ;)

True, stealing away "eyeballs" is one thing. Stealing away users is a second thing.

Still, unless Google monetizes these beta services (no matter how fancy or screwed up) they will add up to the expenses (as Sufiy above described).

Google's model is thus based on steal now, and figure out a monetizing strategy later. But then I wonder what they have been doing all along. It is all about money, because that sustains the service.

[Robert Howard]

Some thoughts on GFinance:

1. If you can't track transaction based portfolios (or even portfolios) you might as well forget converting a majority of Yahoo! Finance users. I track anywhere from 300-500 stocks and unless you have a way for me to move easily from Yahoo to Google, I am NOT going to do it.

I think it's pretty obvious that Google will allow it to happen, and they will tie it in with your GMail ID. (Just like Yahoo! requires an ID as well)

2. The stock charts with linked stories is AWESOME. It's a shame that it only goes back about 10 months or so.

3. Fundamental data only goes back to 2000. Must be their contract with Reuters. If they are going after the institutional market they will have to go back MUCH further than that.

4. An Excel add-in would be nice. A lot of key data providers offer this.

5. There was talk of obtaining private company data -- where are they going to find some of this? How far back will it go? I don't think Reuters can provide them this data AFAIK

[Rob]

Hmm... there seems to be a problem with their quote feed. Take a look at FDS. Yahoo shows a close of $43 and change, Google shows $10.12.

There was no stock split that I am aware of.

[Neal Lachman]

Rob.,

It also shows up $43 on Google. You must have misread it or they must have corrected it when they saw your post!

[Jeremy Johnson]

Some Obvious Google Gaffes:

1. Bank type financial institutions do not have revenue figures on the income statement. Maybe the product managers are still trying to figure out how to calculate revenue for a financial services firm. (C, BAC, WFC)

Try: Revenue = Net Interest Income + Total Non Interest Income - Provision for Loan Losses. Not as on some other nonprofessional finance sites which is Interest Income + Non-Interest Income.

2. Fix your own statement of cash flows (GOOG). There apparently are no cash flows from investing, how convenient for Google, since this is the section of the cash flow statement that is under such scrutiny.

In addition, there are numerous small quibles on the financial statements. 1) provide more detail: some statements have essentially "Revenue - COGS - OpEx = Net Income." The breakdown of fuel and purchased power on utility statements would be nice as would a more appropriate classification of unusual expenses (again GOOGs own statement has mis-classified expenses).

The "Market Summary" on the front page is pretty bare bones and shows a lack of insight into financial markets. I would go for: S&P, Dow, Nasdaq, 10 yr treasury, crude, gold, (a conforming mortgage rate perhaps?) as a basic market summary. An enhanced market summary would be nice as well, showing index levels around the globe for stocks, bonds, commodities and currencies. A "one page" look at the world.

How about some ratios people use in the real world? EV/EBITDA or unlevered FCF, EV/EBT for financial institutions, EBITDA margin, EBITDA / interest expense, D/E, historical ratios for everything are some simple ideas.

M&A activity from press releases?

Anyway lots to do, hope they get around to it.

[Robert]

Love to see what happens when a company goes away. Will Google still have fundamental data? This is where the REAL value is.

[bronxite]

I'll stick with Bloomberg, thanks, pathetic as it is. This is a real eyeopener. I expected Google to become a Bloomberg killer, but what I get instead is Marissaware. Live and learn.

[bronxite]

It's amazing, though, that Yahoo is still using GNUPlot for its stock charts ten years later.

[B]

Less than impressed. I will say the user interface is something Yahoo could take a queue from. Yahoo Finance is head and shoulders above this. I realize it's a beta but what is the fuss about?

Btw, for the heavy duty technicians, Yahoo has up to one hundred years of dowloadable options, price and volume data for each index and stock. No other site has this for free.

The market correction hasn't even started and Google has taken a $150 dollar hair cut. Still going to $170-190 AT A MINIMUM. As long rates rise in a secular move off of forty year lows, PE ratios will compress on the entire market as has happened every secular rate cycle in one hundred and fifty years of data on the NYSE. People forget Intel was trading at a 9 PE in 1990. It was earnings expansion that drove the 90s not earnings. Earnings growth was greater in the 70s than the 90s and we ended the decade with a market PE of 9 after starting it at the highest valuations in the twentieth century that also coincided with bottoming in low long term rates just like we saw in 2003. Sound familiar? Earnings estimates also do NOT take into account any type of earnings recession which we will get at a minimum. An economic recession will slam earnings even more if we see that happen. Company technical and fundamental analysis takes a back seat to market cycles which dictate valuations and desire bid up speculative stocks.

Regardless of Google's superior or inferior business plan, this stock will be avoided like H5N1 until we reset the market and attempt the next bull market.

I posted that before the tank and posted a quick rise after the tank which took us up 40ish points. It's easy enough but people focus on the company. It doesn't have sh*t to do with Google. It's the cycle.

[Neal Lachman]

B,

You may be quite right about that. But if that's the case, what is the real intrinsic value of, for example, Berkshire Hathaway.

I think cycles were a good historical reference, but the world has changed, the economy has changed. Even people have changed. I do not think any stock is going to be held against a cycle of recession, depression, ascention ow whatever -sion.

The fundamentals, like Jeremy is refering to, are more of a modern metric. The cycle can only have any impact on an industry or an index (or indices such as the DJ/S&P etc.) or Blue Chip versus High Tech, bio versus pharma etc. The individual stocks will most likely not be hit by any cycle of any form.

my 2 cents.

[B]

Neal,
I've studied markets and cycles for ages. I've studied cycles all the way back to 1854. The earliest data I have is the 1890s to do analysis on. The one thing I am quite certain of is markets never change and human behavior never changes. I've built models that are back tested through 1966 and I am extremely confident we are going to have an earnings recession and a commodities crumbling with it starting before end of year. Actually, I expect we are in the last stages of a top right now. My model is still on buy but everything is crumbling and I need one more piece in place to go to 100% cash.

As an FYI, this is the longest cycle in over 100 years without a ten percent correction in the Dow or S&P. (S&P doesn't go back 100 years so I use the Dow before the S&P was created) This is also one of the longest bull cycles in the last 100 years. The are transitioning from a twenty+ year cycle of a bond bull that led to twenty years of PE expansion to a secular bond bear cycle which will cause PE contraction. You already see it. PE of nearly 50 on the S&P to PE of 19 now. Earnings have exploded over the last two years to the highest in history yet the market PE cannot find a way to expand. The S&P valuation versus alternative investments is higher than any time in the last twenty five years except for 1987 and 2000.

It's never different this time. NEVER. Even Warren Buffett has stated he expects us to be in a cycle where equity returns are 5-6%. He said it on TV on Monday. He understands these cycles quite well. He liquidated into the late 60s bubble then bought will wreckless abandon into the 1974 low which coincidently is equivalent to the 2006 model year in the cycle.

There will be much wailing and gnashing of teeth. Then, assuming we don't hit a brick wall with some type of deflationary housing crisis or Smoot-Hawley protectionist hawks in Congress screw up the economy, I'm super bullish on the future. But, we'll just have to wait and see.

[Neal Lachman]

B,

I agree on the bull market philosophy. It is quite interesting how you have build a model based on historical cycles. I know of a few others who do the same, but often the conclusion differs (sometimes from one spectrum to the other).

I don't want to consume this message board with cycle talk, but since the topic is in the range of the Googleversum, we can maybe discuss some other things -relevant to their share value.

1) I assume that -due to the cycle theory- you feel that Google is going to tank anyway, regardless what kind of cool (beta) service these fantastic braniacs develop?

2) Or do you think Google is going to see an upside? If so, when, why, and how?

3) If Google tanks (further), is that to be seen as a sign on the wall for all internet stocks? If so, when do you think the cycle calls for a correction (like the internet bubble burst) and when again a retraction (like we are experiencing now)?

4) Is the cycle going to be an overall disaster, affecting all industries, or just internet, or just tech/internet?

Just wondering.

[Still Inside]

Once again GOOG is trying to re-live 1999-2004 over and over again, thinking that they will get a free pass on a new market by delivering an incremental user experience improvement on a well known model.

It's 2006 and people aren't stupid anymore. They are now a huge target, and have provoked the extreme ire of some of the most valuable companies on earth.

GOOG's action today launched a flurry of activity in perhaps hundreds of engineering and design teams across the world that have everything to lose by GOOG's new competition.

Compare that to the free ride they had for years being the only search engine with a fast-loading home page.

Inexperienced management teams like GOOGs tend to ignore human factors. They pissed off MSFT. They are motivating thousands of smart people across the world to work against them. Half of their employees are so super-rich that they don't need to come to work anymore, and the other half have underwater options and are probably looking for a way to trade their GOOG fame for some real money.

GOOG had a huge party in 2005. Now they have to compete with the entire world while nursing a hangover.

SI

[MR Wave theory]

Mr WaveTheory says that Google Finance Shows Google is no longer an innovator.

Google Finance Shows That Google is No Longer an Innovator

Also, Here is an interesting perspective on Windows Vista and how it will affect online video, music, and photos.

Why Windows Vista Delay is Bad News for Apple and Google

[Neal Lachman]

SI, exactly my thoughts, too.

Who had that slogan: "Don't immitate, innovate." I think it was Hugo Boss.

It's going to be interesting to watch this clash, and witness who are the titans and who the titanics.

[John]

As someone who claims, in their tagline to "analyze" the Internet business, your failure to even ENTER A STOCK QUOTE before declaring the site a "yawn" is embarassing. This is my first time to your blog and may be the last.

[Neal Lachman]

Mr. Wave theory, there may be some kind of truth in that new theory you came up with: Vista Delay is bad for Google and Apple. But to call X a killer of Y resulting in Z is sensationalist speech.

Try to differentiate facts from wishful thinking.

I too think that Vista will fare better when it delays and perfectionizes. But let's be honest. No executive in his right mind will give up his company or his darlings without a huge fight. No executive I know is willing to kill his own darlings, nor allowing it to be killed.

Let's watch out when we call this a killer of that. Let's also remember that Google is not written off, not at all. Google is a $100B company, whether its criticasters (ncluding myself) want to admit or not, their ascention to these hights came with a certain fact (though it be subject to further discussion in terms of inflated value). These guys ARE profitable, these guys HAVE a REAL Business case, Yahoo and MSFT have 100 billion reasons to fear Google, Google has "just" 42.5 billion reasons to fear Yahoo. YHOO, MSFT and GOOG have 52 billion reasons to fear Apple. And AAPL, YHOO and GOOG have 272 billion reasosn to fear MSFT. I would be sh*tscared. But I would not give up if I were Schmidt, Jobs, Semel. I'd show the competition who they are dealing with, and I'd make them sweat.

[Neal Lachman]

John, on behalf of Henry and the rest of us who waste our time hanging out here, I wanted to bid you a grandiose adieu.

[Jared Lansky]

When do we get stats in real time?

[Jared Lansky]

From Marketing Vox;

"Google's just-launched finance site has prompted Yahoo to spruce up its market-leading Yahoo Finance with new information, multimedia, and style features, writes MediaPost, citing a Yahoo source. Yahoo plans to make stock charts more dynamic and will incorporate sound, motion and video in the site..."