Anyone who has spent much time on Twitter knows it is a little like a giant bar or party, with hundreds of different overlapping conversations and comments — some interesting and some, well… not. And that’s great if you just want to be social and wander around popping in on the chatter. But what if you want to talk about something specific without the noise? Then you need a private room. That’s more or less what StockTwits is, says co-founder and CEO Howard Lindzon: a social network for those who just want to talk about stocks and the market.
“I used to call it the social Bloomberg,” Lindzon said during a recent interview in Toronto (video of which is embedded below), referring to the trading and news terminals that are ubiquitous in the offices of stockbrokers and bankers. “But now I like to call it Facebook for finance.” Not surprisingly, given the company’s name, it is also a little like Twitter but more focused. Users of StockTwits choose who they want to pay attention to, and can share their thoughts and stocks they like with only a small group, and there is even a Twitpic-style service called Chartly for posting stock charts for discussion.
The idea of a social network for a specific topic is not that new, but StockTwits is one of the few to really stake a claim on the idea and try to turn it into a business. And the stock market seems like a natural topic to choose — since day traders and other investors are obsessed with news and rumors about the companies they cover, and exchanging tips about how to play them. In a sense, StockTwits is Lindzon and co-founder Soren Macbeth’s attempt to create a social network that mimics the gossip and banter that exists on most trading floors and brokerage trading desks.
Interestingly, although the “twits” in StockTwits comes from the fact that the service was originally built on Twitter, it is completely separate from the social network now — although messages can be sent to Twitter and comments can also be pulled from it, provided the person posting the tweet uses a dollar sign and the stock symbol of the company they are talking about. Lindzon said the reliability and uptime issues Twitter had last year convinced StockTwits that it had to build its own network. The service relaunched in May 2009, after originally launching in February.
“We were trying to be a real-time conversation about stocks, but the information wasn’t real-time” because of the repeated problems and outages, the StockTwits co-founder said. “You can’t make a business out of selling someone else’s product if it doesn’t work.” Because StockTwits is trying to be a more exclusive, niche-oriented social network, it doesn’t have the scaling issues that Twitter does — the network has about 50,000 core users, Lindzon said, while Twitter has several times as many.
StockTwits recently launched a new feature where users can follow not only other users, but also stock symbols. “We’re giving each symbol its own social graph!” said Lindzon. Public companies have the ability to claim their symbol, which creates a verified account for them and their stock, so investors know when information is being posted that it is from a reliable source, and private companies can create their own virtual ticker symbols. For the future, Lindzon said the company is working on allowing users to share their portfolios and other related features.
Disclosure: StockTwits is backed by True Ventures, a venture capital firm that is an investor in the parent company of this blog, Giga Omni Media. Om Malik, founder of Giga Omni Media, is also a venture partner at True.
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