24/7 Wall St.

When MySpace "founder" Brad Greenspan tried to buy Dow Jones (DJ) he suggested that the company could start a competitor to Yahoo! (YHOO) Finance. In his letter to the DJ board, he said Yahoo! Finance would have revenue of $300 million in 2007 and $500 million in 2008. The growth seems improbable, but his assertion that "with the addition of Yahoo’s personal finance initiatives in 2007, it (Finance) is also one of the fastest growing Yahoo segments" is almost certainly correct.

YHOO will have revenue of about $6.5 billion this year. According to comScore, the Yahoo! Sites had unique visitors of 133.4 million in the US during July. Figures obtained by 24/7 Wall St. put Yahoo! Finance unique visitors at 12.4 million in last month. The idea that Finance could be a big portion of Yahoo!’s revenue is not far fetched. The New York Times (NYT) Digital properties had unique visitors of 42.7 million in July, and internet properties at the company will bring in about $350 million this year. So, Greenspan’s revenue number could be a stretch, but not a huge one.

Yahoo! Finance has lost a lot of its key people recently. Some have gone to Conde Nast Portfolio, and others to Dow Jones (DJ). Peggy White, the unit’s general manager, made a mysterious departure in June.

The reason that people are leaving may not just be that Yahoo! is doing poorly. Its stock is near a 52-week low as its display advertising revenue growth has all but disappeared. A lot of the employee stock options have to be under water.

At the Finance unit, it appears that pageviews are disappearing at an alarming rate. comScore figures for July show a nice increase in the Finance unique visitors, which hit 12.396 million, their highest level in over a year. The figure was a 14% increase over June.

But, pageviews, which is what display advertisers pay for, have been falling sharply for a year. In May 2006, Yahoo! Finance had 671 million page views. In the fourth quarter of 2006, pagesviews dropped to an average of 413 million per month. In June 2007, the number was 290 million. Last month, the figure was 299 million.

Why? One explanation is that Yahoo! now uses a quote platform that automatically refreshes quote pages. This means that the users does not have to reload the browser, and therefore the page, to get an updated stock quote. Also, Yahoo! Finance reorganized its message boards so that they are organized by topic and do not handle message posts in chronological order. This probably allows people to get to topics they want to read about more quickly than if they had to sort through individual messages and read each post.

It could be argued that the changes to Yahoo! Finance have made the experience better for visitors, but, watching page views cut by more than 50% over just a little more than a year is nasty business.

The arena of online financial content is becoming more competitive. MSN and AOL each have large financial sites that trail Yahoo! Finance, but not by much. Dow Jones, Forbes, and Reuters have all been aggressive in the segment. And there has been some disappointing competition, especially Google (GOOG) Finance. If Rupert Murdoch does indeed make more Dow Jones content available for free, it is likely to suck some of the audience and ad revenue away from the current leaders.

If Yahoo! Finance is a big part of the parent’s revenue, the new management needs to fix it.

Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.