Zack Miller's  Instablog

In spite of being one of the lone voices online who actually likes and uses Google Finance (check out my Yahoo Finance vs. Google Finance post), it’s becoming clearer and clearer that I’m really in the minority.

The NYT ran an article this weekend that looked at both Yahoo Finance and Google Finance.  A good read, the article presented a couple of salient points on why Yahoo seems to be running away with the race in terms of traffic growth.

• Psychology: Online investors appear to get psyched-out when there is too much information presented to them all at once.  James Pitaro, vice president of Yahoo’s audience group is quoted as saying, “He said Yahoo deliberately adopted what he calls “the Apple model — simplicity in design; a clean, simple look, not overburdening our users with too much information on the page.”
• Designed for speed: The layout of Yahoo Finance, with its short video embed on the right hand side, was designed for speed and multitasking.  Google’s appears jumbled.

But here’s the thing.  The article itself belies its real premise.  Scroll down a bit and see what Pitaro himself credits as a big traffic driver: Yahoo’s homepage.

“We have a great relationship with the front-page team to identify topics we should cover,” he said. An example of a “featured” story found last week on Yahoo’s front page: “Where Rich Singles Live,” accompanied by a picture of an attractive young woman smiling at the camera while pulling papers out of a briefcase. A click whisked the interested reader to Yahoo Finance.

Up until rather recently, Google didn’t even favor Google Finance links in its search results.  Yahoo uses its firehose of traffic to continuously drive traffic to Yahoo Finance.  It’s hard to compare traffic trends as a stand-alone finance property under these dynamics when Yahoo Finance received almost 2x amount of traffic from Yahoo properties than does Google Finance.

All of this boils down to a simple fact though:

Yahoo understands that a free finance site prospers by drawing less from the world of mathematics and more from the world of entertainment, informing just enough to satisfy users without setting off an anxiety attack.

Check out Barry Ritholtz’s take on the article and most interestingly, scroll down to the comments.  Most readers cite Yahoo’s API that allows them to easily pull data from Yahoo Finance as the deciding factor for favoring Yahoo.