Sunday, January 14, 2007

About Time: Google Moves to Introduce Real-Time NYSE Market Data

Many years ago I was involved in developing some of the first feeds of stock ticker data to crawl across the bottom of news television broadcasts. They worked well enough, but the stations that we worked with were supposed to put a message at the bottom of the screen saying that the data in the feeds was delayed fifteen minutes. The message was there...kind of. It got squeezed off the bottom of most television screens, by "accident." And most viewers were probably none the wiser.

Today most individual investors tracking their stocks know very well what "real-time" data means and they demand it whenever they can - for a price. Now Google has announced a pending deal to bring real-time market data from the New York Stock Exchange to its Google Finance online financial information service at no charge to its users. Google Finance has been maturing quite a bit since its rather spartan introductory days, providing a rich array of statistics, feeds, analytics and portfolio tracking tools to help investors sift through investment management decisions. But providing a real difference that would budge users from other long-established financial portals has proved to be elusive.

If the SEC approves the deal it could be a very compelling push to move those investors over to Google. With news sources proliferating on the Web there's much more market-moving information available to the typical online user that's available to them at the same time as financial professionals receive this information, so moving NYSE markets in line with this expanding array of news sources would seem to give them an advantage with online investors as it tries to shore up its position as a premier global marketplace for securities.

But the real reason why this seems palatable to NYSE at this point is that the "real-time" stock trading information that users will experience on Google is not the same real-time experience that professional traders in global investment banks have at their disposal. With mere sub-millisecond delays in the information from exchanges received at major financial institutions - and their ability to execute trades on that information via extremely powerful automated trading facilities - even marginal advantages in delivery speed are enough to ensure significant profits for the inside players. So moving to "real-time" information for consumer investors - at some presumed price to Google - still ensures an inside market while encouraging individual investors to feel that they're more on top of the latest market data. It's a win-win for NYSE and the major banks - and a potential coup for Google. Opening bell, here we come...
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