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Finance sites walk fine line

Yahoo Finance removes bulletin boards that cover over-the-counter stocks, while Schwab plans third-party research.

Financial sites are continuing their struggle today to seek a balance between offering enough information to attract a wide audience and meeting the requirements of regulators and others.

Net giant Yahoo announced it has removed about 100 bulletin boards from its Yahoo Finance area that dealt with so-called over-the-counter bulletin-board (OTC) or penny stocks.

OTC stocks are "smaller stocks that are not listed on any of the three major exchanges": Amex, the New York Stock Exchange, and Nasdaq, said Mike Riley, producer of Yahoo Finance.

He said the OTC stocks are "less liquid, and because they're less liquid, there is a lot less user interest."

Bulletin boards can be a labor-intensive undertaking, in that producers index them so they can be searched, answer user inquiries about them, and deal with complaints that arise from postings, Riley said. He said Yahoo Finance removed the boards to concentrate better on the other 8,500 or so financial boards it operates.

Last month, E*Trade announced it would add chat to its site. The online brokerage said at the time it would not allow chat about penny stocks on its site because those stocks are more likely to be manipulated by chat.

But Riley said the risk involved with the content itself did not play into Yahoo Finance's decision.

"We offer unmoderated public forums," he said. "With the size of our user base, [moderating] wouldn't be possible. But also, we really believe in the marketplace of ideas. If there's a dispute over what someone says, we think the best way to handle it is with more discussion."

Also on the Net financial front today, brokerage Charles Schwab announced it would add third-party research reports to its site. The firm announced it would do so earlier this year, but had to postpone its plans after financial giants such as Paine Webber and Merrill Lynch protested, saying Schwab would be giving away proprietary research for which their clients pay huge sums.

But Schwab is now going forward with the plan, according to spokesman Tom Taggart.

"We've always said the purpose of the Internet is to provide people with as many different sources of information as possible," Taggart said. "We're going to offer broad access to research from many different sources."

Taggart declined to name the research firms that would provide content as well as the financial terms of the deals. He said users can expect the information "as early as September."

Other features coming up on the Schwab site include "more customization and personalization," Taggart said, though he declined to give specifics.

He said 40 percent to 50 percent of the firm's trades are conducted online, up from "somewhere in the low thirties" last year. He said the company signed on 500,000 new active accounts in the first five months of 1998.