If you take the free-for-all financial advice of a public message board and apply the anyone-can-edit approach of a wiki, does it add up to a reliable source of investment data? That's what the founders of Wikinvest are hoping. On Monday, the financial information wiki will announce VC funding and formally launch. In the calm before the storm, we spoke to founders Parker Conrad and Michael Sha about the elephant in the room: reliability.
Conrad and Sha want to give day traders solid information in a form more digestible than sites such as Yahoo Finance. After all, if Wikinvest is riddled with wrong information, there goes the site's whole raison d'être. Having seen the flaming chaos of most Yahoo stock chat rooms, we're skeptical, but here's how Wikinvest plans to hedge their bets
- Set a precedent of quality: Prior to launch Conrad and Sha paid writers to seed the site with initial content, focusing on the top half of the S&P 500. They decline to say how many users the site has—which probably means not many—but what's there gives the perception of a decent number of quality visitors.
- Honor the best: An algorithm determines which users contributed the most to an entry and displays their names and photos prominently. That simultaneously flatters their ego and--assuming the person fills out a profile and seems professional--gives the greater community confidence in the information. Stocks without any information carry this message: "The article about this company has not been written yet. You could be the first person to write about this company -- it's a sure thing that you'll be credited as a Top Contributor."
- Create a magnet for bias: Each stock profile has three tabbed text blocks: neutral, bulls, and bears. Rather than wage arguments based on people changing each other's text, there's a forum for everyone.
Conrad and Sha admit they'll never achieve absolute reliability. Says Sha, "We don’t need to be an authoritative source as long as we can be helpful and useful."
__Update: __Wikinvest did indeed announce its funding—$2.5 million from venture firm DCM.
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