Anyone who has spent much time using Twitter knows that it is a little like a giant bar or party, with hundreds or even thousands of different overlapping conversations and comments — some interesting and some, well… not. And that’s great if you just want to be social and wander around popping in on the chatter. But what if you want to talk about something specific without the noise? Then you need a private room. That’s more or less what StockTwits is, says co-founder and CEO Howard Lindzon: a social network for those who just want to talk about stocks and the market.
“I used to call it the social Bloomberg,” Lindzon said during a recent interview in Toronto (video of which is embedded below), referring to the trading and news terminals that are ubiquitous in the offices of stockbrokers and bankers. “But now I like to call it Facebook for finance.” Not surprisingly, given the company’s name, it is also a little like Twitter but more focused. Users of StockTwits choose who they want to pay attention to, and can share their thoughts and stocks they like with only a small group, and there is even a Twitpic-style service for posting stock charts for discussion.
Interestingly, although the “twits” in StockTwits comes from the fact that the service was originally built on Twitter, it is completely separate the social network now — although messages can be sent to Twitter and comments can be pulled from it as well, provided the person posting the tweet uses a dollar sign and the stock symbol of the company they are talking about. Lindzon said the reliability and uptime issues Twitter had last year convinced StockTwits that it had to build its own network, which it spent months doing and relaunched in May 2009, after originally launching in February.
“We were trying to be a real-time conversation about stocks, but the information wasn’t real-time” because of the repeated problems and outages, the StockTwits co-founder said. “You can’t make a business out of selling someone else’s product if it doesn’t work.” Because StockTwits is trying to be a more exclusive, niche-oriented social network, it doesn’t have the scaling issues that Twitter does — the network has about 50,000 core users, Lindzon said, while Twitter has several times as many. And StockTwits spends a lot of time trying to cultivate its community, he said: “We kick about 50 percent of the people who join.”
In most cases, that’s because users try to post about “penny” stocks (i.e. those that trade for less than $1 — Lindzon said they are too speculative and attract scam artists, so StockTwits doesn’t cover them), or use offensive language. “We want to be like Quora, but for a very specific vertical” or topic interest, the StockTwits CEO said, referring to the Q&A site that has gotten a reputation for having a very high-quality community. And the service is using every social-media tool in the book to do it: for example, it recently launched the ability to follow not just other users but specific stock symbols. “We’re giving each stock symbol its own social graph!” said Lindzon.
Public companies have the ability to “claim” their ticker symbol, which creates a verified account for them and their stock, so investors know when information is being posted that it is from a reliable source, and private companies can create their own virtual ticker symbols, and then follow what investors or interested users are saying about them. For the future, StockTwits has some interesting developments coming around stock portfolios and the sharing by users of their stock trades, as well as potentially aligning with various e-trading services to facilitate actual trades, said Lindzon.
Disclosure: StockTwits is backed by True Ventures, a venture capital firm that is an investor in the parent company of this blog, Giga Omni Media. Om Malik, founder of Giga Omni Media, is also a venture partner at True.