How Got It Wrong And Three Blog Innovators Got It Right (TSCM)

| About: TheStreet, Inc. (TST)
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The Microcap Speculator submits: On his hit show Mad Money, Jim Cramer likes to say "Other people like to make friends, I like to make money." Does that hold true for his company, microcap Internet content provider (TSCM)?

The stock has been on a tear lately, up almost 200% from a low of $2.59 in May 2005. No doubt, this company has improved. After years of losses, TSCM has returned to profitability. The company posted earnings of $.06/share in Q3 2005. Adding fuel to the fire is speculation that the company will be bought out. The takeout rumors could come true. After all, Dow Jones paid a hefty sum for TSCM rival, and even got bought. Internet content is hot, and old media is desperate.

However, if doesn't get bought, I think the stock goes down.

Where will the growth come from? The company relies in large part on Jim Cramer's popularity, and its difficult to see how Cramer will get more exposure than he gets today. His Mad Money show is on 3-4 times a day on CNBC, and he has a best-selling book, Real Money, named after the pay site run by If the company can only do 6 cents with all that exposure, what will it take to grow earnings?

More importantly, I think the RealMoney pay site, the key property of TSCM, is slipping. I have been a paid subscriber for about six years. But when my subscription runs out, I am not going to renew. The company has lost most of its best columnists, and is pursuing a business strategy that is disrespectful to its readers.

When I first subscribed, the site offered a tremendous slate of columnists that you couldn't find anywhere else. Now they are gone -- and the site costs three times as much. Herb Greenberg left for MarketWatch. Bill Fleckenstein now writes for MSNBC and his own service. Gary Smith manages money (between appearances on the Fox TV Saturday morning lineup). Todd Harrison left to start his own service, Minyanville. Bill Meehan was tragically killed on 9/11 and is still missed by all who read and knew him.

Some decent writers remain, most notably James DePorre, Barry Ritholz and Tony Crescenzi. The larger problem is the company's attitude. Instead of treating readers who pony up $279 annually as clients, RealMoney treats them as sales prospects. The site devotes a large part of the homepage to teasers for costly premium products, and spams users on behalf of third parties like Tobin Smith's ChangeWave service.'s redesign this week underscores its problems. It added columns called "blogs," which are really just content that would have showed up in other places in the previous design (like RevShark's trading diary or Tony Crescenzi's comments in the Columnist Conversation). misses the point. Blogs are not about repackaging or upselling--they area about creating and aggregating unique content. should take a cue from these three blog innovators:

  • Barrons used to be my Saturday reading of choice. Now its Bill Cara's Week In Review. This site is the first place I go for original market commentary. Like former TSCM columnist Todd Harrison, Bill Cara has a sixth sense for market turns.
  • Seeking Alpha: Seeking Alpha used to be a set of good, sometimes very good, financial blogs like Internet Stock Blog and China Stock Blog. Owner David Jackson raised the bar with two phenomenal ideas. First, he has obtained permission to repost articles from a few dozen financial blogs (including this one). Some of these are specialists in ETFs, others in gold stocks, still others in tech. The end result is a collection of content that, in my opinion, rivals any paid website. Second, he posts free transcripts of hundreds of conference calls. Why doesn't TSCM, or do this?
  • Phat Investor: The single best tool for searching financial blogs. Other blog search engines and directories like Technorati, Google Blog Search and Ice Rocket turn up too many spam blogs, or "splogs." Phat Investor hand picks its search universe, so only real blogs make the cut and the results are usually spot on.

DISCLOSURE: (1) The author of this article has no position in TSCM or interest in any of the blogs mentioned here. Content here is sometimes posted on Seeking Alpha blogs, and this blog is searchable on Phat Investor. As a result, I receive referrals from those sites (which are appreciated!). Not a recommendation to buy or sell any security. For informational and educational purposes only. (2) The founder of Seeking Alpha, David Jackson, is short TSCM at the time of publication.

TSCM 1-yr chart: