Feeling A New Pulse for Companies

Alacra’s new Pulse Platform (http://pulse.alacra.com) reflects the reality of where people now look for corporate news, information, and analysis. It’s no longer sufficient to rely upon investment house research reports, whether those reports come from the buy side or the sell side. In the current economic climate, investment analyst jobs are disappearing, resulting in fewer reports. Additionally, the trustworthiness of recommendations from investment banking firms has been called into question now that we know companies can influence their coverage by analysts. Bloggers and analysts from outside the traditional investment community have taken up the slack. Goldstein calls this a "decentralized research model" and identifies it as today’s research challenge.

An increase in available information, however, raises a different type of trustworthiness issue: how to separate the wheat from the chaff. Using engineering/information science terminology, Goldstein phrases it as the "signal to noise ratio." The amount of useful, actionable information (the signal) can be drowned out by false, irrelevant information (the noise). Alacra Pulse is designed to increase the signal and eliminate the noise. It combines web content from traditional news sources with blogs that its editors hand select as reliable. The latter is what makes the platform so valuable. Alacra’s definition of "alternative information sources" includes both independent research analysts and professional bloggers. Alacra claims it is the only source to aggregate traditional investment analysis with alternative media in a single view.

The Alacra Pulse Platform is built on a proprietary technology called Applied Knowledge Extraction that uses a combination of semantic analysis and information already existing in Alacra’s knowledgebase to identify companies and analysts, "entities" in Alacra-speak, and to recognize certain business events. The latter include mergers, acquisitions, divestitures, layoffs, bankruptcies, personnel changes, earnings, market conditions, CEO quotes, rumors, and other business events that would interest investors. The process takes RSS feeds from newspapers, magazines, blogs, and the trade press. It runs these through the Alacra text extraction engine. Proprietary tags are assigned for entities and events. The items then join individual Pulse products.

Tracking the Pulse of the Street Machine

The first product on the Pulse Platform, Street Pulse, tracks recent news, commentary, and opinions on companies. The left side of the initial screen features the latest comments from analysts on particular companies followed by an analyst comment ticker. On the right is "What’s Hot? The Most Talked-About Companies Today." Each item is carefully labeled as B for blog, S for sell side, C for credit analyst, and I for industry analyst.

There is a search box for company and analyst name, but I found it easier to use the pull-down lists. There are three: company, analyst, and firm. There is no list for "event"; you can’t search for Circuit City and bankruptcy. Although Alacra focuses upon publicly-traded companies, in which you can invest, you will find some information on privately-held companies, particularly those that loom large within their industries. Think Cargill in agriculture or Bechtel in construction. Additionally, in the company pull-down list, you’ll find major associations, such as the American Bankers Association and the American Dental Association. Street Pulse also lists Federal Reserve Banks and the International Monetary Fund as companies. It has both IBM Corp. and International Business Machines Corp. listed, although the company has been officially IBM for years.

Using the same Pulse Platform, Alacra plans to launch additional products to focus on specific events. Deal Pulse will identify companies involved in merger and acquisition transactions, Weak Pulse will spot distressed companies and restructuring activities, and Legal Pulse will pick up mentions of law firms as they relate to investment activities. Alacra Pulse products obviously pose research advantages for the investing and trading communities, but they will also be valuable for competitive intelligence and general company research.

Freemium Pulsing

Alacra has typically put its high-end business information behind a pay wall. Pulse is different. What I’ve described above is free. It is ad-supported, but there is only one ad on the page. However, Alacra also offers an upgrade to its premium product. This hybrid pricing model, dubbed "freemium" by Alacra, is not unique, but it offers insight into what the company believes people will pay for.

The free version is fine for a one-off search, but if you’re tracking companies, you’ll need the premium version. My guess is that alerting capabilities will be a big draw. Alacra’s Pulse customers will be able to set up watch lists for companies they follow. When Street Pulse posts an item about a company being watched, the premium customers will get email and mobile updates of events. These updates can, in turn, be shared with colleagues and clients. Premium users of Pulse will also have advanced search functionality.

In a blog post at the Buying & Selling eContent Blog (www.bsecblog.com), EContent editor Michelle Manafy comments, "Alacra wants people to come back (and spend money). They believe that freemium approach will reveal potential new customers—which can be difficult and costly to pin down—and should help with incremental sales through the Alacra store." That’s true, but from the customer perspective, Alacra is creating a valuable new service, one that combines traditional sources of company information with newer, alternative, but carefully reviewed and sanctioned information. This blend of bloggers and analysts, like the blend of free and fee, presages a new business model and a new means of information acquisition.

In the Web 2.0 spirit, there’s a Twitter feed for Alacra Pulse (www.twitter.com/alacrapulse) and an email address for you to suggest news and commentary sites that Alacra Pulse should add to the product (mydata@alacra.com).

And now I see with eye serene
The very pulse of the machine
—William Wordsworth
"She Was a Phantom of Delight"