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Funds Begin Testing RSS Extensible Markup Language

It's not on most fund advisors' radar screens just yet, but really simple syndication (RSS) technology, a form of XBRL (extensible markup language) that is still in its infancy, is beginning to make its way into the financial services realm.

Fidelity Investments of Boston now makes several of its fund commentaries and newsletters available for those tech-savvy investors who have signed up for RSS feeds. The NorthTrack Funds, the proprietary fund family of B.C. Ziegler & Co. of Milwaukee, has similarly been making its prospectuses, performance summaries, fund manager commentaries, white papers and other documents available for distribution through RSS feeds.

Others, including Dreyfus of New York, are assessing the viability of RSS. "We are looking at this as a 2006 project," said Prasanna Dhore, executive vice president of Dreyfus. "The question is, will it bring value to the customer?"

Currently, there are a number of publicly available RSS "feeders," which are software programs that online users can download to their PCs. These feeders then allow Web users to search across the Internet for very specific information or content they desire, which is then syndicated and fed back to a user's designated and customized Web site home page, such as My Yahoo!, My MSN or Google.

The benefit is that RSS users can have exactly the news, updates or other information they desire fed to them on a timely basis instead of having to manually and repeatedly search out individual Web sites. RSS readers will typically force feed headlines and summaries to users, with a link back to the origination site if a fuller article is desired.

The technology can also bring in relevant material from the thousands of weblogs (also known as "blogs") that Internet fans use as fluid and dynamic personal journals for sharing ideas, and making comments and spouting criticism.

The main concept behind the technology lies in consumer control, said Bill Flitter, chief marketing officer of Pheedo, an Emoryville, Calif., RSS advertising firm. "The consumer wants control over the content he or she is receiving," he said. "RSS is like United Parcel Service; it's the trucks that deliver the goods."

Because Web users must opt-in to receive their chosen news or information feeds, it's newshounds, information junkies or serious fund investors who tend to subscribe to the various feeds companies are increasingly making available.

RSS Demographics

Right now, only the younger, tech-savvy online denizens know of and utilize RSS technology. According to the July 2005 results of a survey of 1,300 online users by the Pew Internet & American Life Project of Washington, a modest 9% of Americans have a good idea of what RSS feeds are, while 65% aren't really sure, and 26% have never heard of the technology.

Industry research shows that early RSS adopters tend to be male, between 20 and 35 with higher than average salaries and who live in Silicon Valley, or work in the tech industry and therefore embrace new technology. A recent study from Nielsen/Net Ratings of New York showed that 78% of RSS users were male, and that their overriding reason for using RSS feeders was convenience.

"But that landscape is changing," said Fergus Burns, chief executive officer of Nooked, a Boston-based RSS marketing firm. "If they're an online user, whether it's your grandmother or your eight-year-old child, chances are they'll come across RSS," he added,

It's a good bet that RSS technology won't exist in virtual obscurity much longer. That's because Microsoft's new PC operating system, Microsoft Vista, will be preloaded with the new Microsoft Internet Explorer 7.0, with RSS technology embedded, explained David Michael, chief information officer of PRNewswire of New York, which distributes news and information worldwide. His firm began using RSS technology a couple of years ago. "We said this may or may not develop into something big," Michael noted.

Since then, Michael has seen interest in obtaining RSS feeds grow from just the tech savvy and media covering the tech industry to the general media. Last month, PRNewswire began slicing its usual full RSS news feed into 600 separate feeds that are industry- or language-specific.

While RSS technology may have its roots in news organizations, publishers and blogs, others are looking for ways to leverage the technology.

"The increasing popularity of RSS has created a new way for fund investors to gain information about investments, and a new way for fund marketers to distribute information to investors," said Ed O'Farrell, a media and advertising sales consultant with Lipper of New York. The technology helps investors get through an incredible amount of information and "cut through the noise," he said. In addition, "by adding RSS feeds, fund companies can find out how many people are using their feeds."