Nasdaq in deals to sell real-time market data
NEW YORK (Reuters) - Nasdaq OMX Group Inc <NDAQ.O> said on Monday it has begun selling real-time share data to the websites of Google Inc's <GOOG.O> Google Finance, cable television network CNBC and News Corp's Wall Street Journal <NWSa.N>.
Until now, Nasdaq has been providing quotes on a 15-minute delay.
Under the terms of the initiative, dubbed "Nasdaq Last Sale," the three websites will pay Nasdaq up to $100,000 a month to provide Nasdaq stock quotes to their users. The sites would have to pay up to $50,000 more to quote New York Stock Exchange and American Stock Exchange listed stocks.
The agreement comes a week after BATS Trading, a fast-growing trading venue that handles 9 percent of U.S. equities, said it would provide its market data free of charge to Yahoo Inc's <YHOO.O> Yahoo Finance.
The Nasdaq arrangements will begin as a six-month pilot project, while Nasdaq waits for definitive approval from the U.S. Securities and Exchange Commission for the right to sell market data to the sites for a fee. It hopes to get the approval within a year.
The move comes at a time when the major exchanges are trying to squeeze as much revenue as possible from market data, which now makes up a larger share of revenue than equities trading. At Nasdaq, market data generates 20 percent of revenue, while at the NYSE, the figure is 14 percent.
Nasdaq says the exchange's high trading volumes make its data more accurate, allowing it to charge a fee for a service that BATS is providing free to Yahoo. Nasdaq handles about four times the equity trading volumes that BATS does.
A NYSE spokesman declined to say whether the exchange had similar projects in the pipeline.
The project will generate only modest revenues, said Adena Friedman, an executive vice president at Nasdaq OMX.
But Friedman expects it will strengthen Nasdaq's brand and will indirectly lead to more trading on Nasdaq as retail investors are able to react more quickly to market price changes.
Google Finance, launched two years ago and still far behind Yahoo Finance in traffic, says its service targets retail investors. According to comScore, a data tracking company, Yahoo Finance drew 19.5 million unique U.S. visitors in April 2008, while Google Finance attracted 1.3 million visits.
The deal is not exclusive to the three websites, Nasdaq said.
(Reporting by Phil Wahba; Editing by Andre Grenon/Jeffrey Benkoe)