Yahoo! Finance and Seeking Alpha Part Ways

A major change is afoot in the financial blogosphere. As of next Monday Yahoo! Finance will no longer be displaying staple Seeking Alpha headlines on its website. The move was initiated by Yahoo! Finance and comes amid news earlier in the week that Yahoo! Finance launched its own contributor network via Tumblr.

The news is a surprise to many as the two sides were seen as close. Some have even suggested that Yahoo! (NASDAQ: YHOO) was interested in acquiring Seeking Alpha.

While contributors are seeing the news as a major blow, Seeking Alpha is taking the development in stride and today announced a host of new opportunities for itself and contributors.

Seeking Alpha noted that it's been paying Yahoo significant amounts every month for traffic and the traffic they receive in return is "lower quality." The company will take the extra money and pay contributors an additional flat payment of $35 on top of the $10 per thousand pageviews they already pay.

Below is a post from SeekingAlpha's VP Content and Editor in Chief Eli Hoffmann explaining the situation and opportunities:

An End To Our Relationship With Yahoo, A New Era For SA Contributors

Dear contributors,

As of next Monday Yahoo Finance will no longer be displaying Seeking Alpha headlines on its website.

We’ve had concerns about Yahoo Finance for a while. Rather than a negative, we view this as major opportunity for Seeking Alpha, one which will deepen our relationship with our contributors.

First I’ll discuss why we feel the time has come for Seeking Alpha to part ways with Yahoo Finance, and then specify how this enables us to pay contributors more and increase the value we provide to our readers.

Why it’s time to part ways with Yahoo Finance

Our relationship with Yahoo put Seeking Alpha on the map, allowing us to build influence and readership. We’re tremendously grateful to Yahoo for that. But recently we’ve had growing concerns about our relationship with Yahoo Finance:

1. We’ve been paying Yahoo significant amounts every month for traffic. As with most of its partners, Yahoo charges Seeking Alpha per click, and the aggregate amounts are high. We’d rather pay this money to our contributors.

2. Our approaches to content have diverged. Seeking Alpha’s vision is to be a crowdsourced platform for serious investors, while Yahoo leans more toward populist, personal finance and general-interest content. For example, SA contributors published articles on 5,962 tickers over the past year. In the area under these articles, we show headlines with maximum relevance to the stock under discussion. In contrast, the Yahoo Finance features populist articles on its homepage (as I write this, “Wealth-Building Secrets of the Millionaire Next Door” and “Chinese Billionaires Criticized for Giving Harvard $15 Million”), and has introduced a feed of these headlines below every article.

3. Yahoo’s readership is lower quality than Seeking Alpha’s. Given the different approaches to content, it’s not surprising that Yahoo Finance readers are on average less serious and less knowledgeable than Seeking Alpha readers. For example, visitors to Seeking Alpha from Yahoo Finance read 40% fewer articles per visit than visitors who come from our email alerts. We care enormously about the quality of discussion on Seeking Alpha, which comes from the quality of our community and readership.

Perhaps as a result of these factors, the percentage of our traffic from Yahoo Finance has steadily declined over the last few years. When we first partnered with Yahoo, it provided the vast majority of our traffic. Now, only 19% of our daily visitors come from Yahoo Finance.

A win for SA contributors

The end of our partnership with Yahoo allows us to re-allocate the money we were paying for traffic to our contributors, and reward outstanding content. Here’s what will change this coming Monday (July 28):

1) Exclusive articles will receive an additional flat payment of $35 on top of the $10 per thousand pageviews we already pay. This means average earnings per article will increase significantly. Yahoo Finance sent us an average of 1,400 pageviews per article, contributing $14 in pageview payments. The new $35 additional flat payment more than doubles that number. Why? First, we would rather put money in contributors’ pockets than in Yahoo’s. And second, contributors are helping us to build other areas of our business (such as mobile), and deserve to be compensated for that even if we’re still working out monetization. A flat payment also means that contributors with valuable expertise in undercovered areas are less dependent on pageviews and free to focus on the topics they care about, which are often more valuable to other investors. (Minimum guaranteed payments of $150 for PRO articles and $500 for Top Ideas remain the same.)

2) Starting next week, we’ll be searching through our long and short idea archives looking for outstanding stock ideas that played out, and awarding two $2,500 “Outstanding Performance” prizes every week. More details about how articles will be selected can be found here.

More to come

We appreciate the value of high-quality financial content. It has the potential to make readers money, and that means contributors who share their research should have the potential to earn meaningful income. We also recognize the value of the broad exposure Seeking Alpha provides authors. We will continue to drive greater and higher-quality exposure to contributors. As organic pageviews increase, contributors will earn more money, incentivizing more great contributors to join our network, and enabling all contributors to produce and share high-quality equity research.

But we’re not going to stop there. Expect to hear more from us in coming months. It’s a good time to be a Seeking Alpha contributor.

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