Threat to Yahoo Finance is Opportunity for Google, Dow Jones and IACI (DJ, GOOG, IACI, YHOO)

The launch of Google Finance is now widely expected in the Internet industry. In a rather uninformative Forbes interview a few days ago, for example, Yahoo! Finance general manager Peggy White is asked "Do you think Yahoo! Finance could withstand a challenge from Google if they came out with their own finance site?".

It's not surprising that Google (GOOG) would want to enter the market for financial content. Finance and entertainment consistently top the popularity rankings for Web users. (The rankings tend not to include porn.) In January, the Forbes article claimed, Yahoo! Finance had 34.3 million worldwide users, up 21% year over year, and Microsoft's (MSFT) MSN Money had 24 million worldwide users, up 19%. The Nielsen-Net Ratings stats for the top finance sites are different, but still show huge readership and Yahoo leading.

But the threat to Yahoo (YHOO) might not come from Google launching its own finance portal. Rather, the more significant threat comes from users accessing financial content via search engines. It's far easier to type a ticker symbol into a search box than to go to the home page of a finance portal to start digging for stock-related information. And that's even truer if the search box is embedded in your browser, as it is with Firefox, Safari, and soon no doubt Internet Explorer.

The search engines understand that users want direct access to information in response to searches, rather than just algorithmically-generated links. They understand that they need to become answer engines instead of search engines. So Google started to serve up financial content such as stock charts, quotes and other data in response to search queries as early as April of last year. Yahoo! quickly followed suite.

But both search engines offer only rudimentary data that doesn't rival the richness of content on Yahoo! Finance. Yahoo's financial search efforts are handicapped by the fact that Yahoo! Finance is part of Yahoo's Media Group, which operates separately from its Search Group, and that Yahoo! Finance has built its business from hosting its own content, an anathema to a search engines' goal of providing users access to the best content, regardless of source.

Google's financial efforts haven't fared much better. Take a look at this Google search for "GOOG". The information provided directly is sparse, and the algorithmic search results are unsatisfying. If Google is smart, Google Finance will be a radical improvement to its financial search results rather than a portal.

The surprise player is IACI's (IACI) Ask.com. Ask.com now has the best search results for ticker-based search. Compare this Ask.com search for "GOOG" to the Google search above. It's aesthetically more pleasant and contains more information than the Google search. If Ask.com can entice its users (3-4% of all searches?) to access financial content via its web site rather than a portal, this could be a lucrative business.

Look carefully at the Ask.com search result above, and you'll see that it links to financial content from Dow Jones' (DJ) MarketWatch.com. Stock quotes, charts and other data are now a commodity. The missing piece is analysis and opinion, and Dow Jones can provide that from MarketWatch and, more important, The Wall Street Journal.

The real challenge to the financial portals will therefore come from search, not a Google portal. If Yahoo fails to integrate the content from Yahoo Finance! into its search results it will lose the financial search market to Google, IACI and their content partners like Dow Jones.

Related:

• Stock-ticker search plug-in for Firefox
• Will IE Be Able to Displace Firefox? (discusses search box embedded in the browser, and the community of third party search plug-ins for Firefox)