Last week, thousands of fintech developers scrambled to find a Yahoo Finance API replacement. Individual investors, startups, and even fortune 500 companies had taken advantage of this free service to obtain financial data like stock prices for their websites, intranets, and analytics applications.
Yahoo hasn't disclosed why they canceled the API but we can be confident that money had everything to do with it. Yahoo is not a stock exchange nor is it a data provider. This means that Yahoo has to buy its stock data from at least one, if not several, data providers. When Yahoo contracted with these parties to obtain this data, their agreements included "redistribution rights."
Redistribution rights give data purchasers the right to show data to other people - if you visit Yahoo Finance and see information about a stock, Yahoo is redistributing the data to you. This costs Yahoo a pretty penny - redistribution rights are expensive. Most companies can't afford redistribution rights for financial data.
The Yahoo Finance API, however, wasn't redistributing financial data. It was allowing Yahoo's users to redistribute financial data. Developers around the world could systematically query Yahoo's financial data and show it to their own end users. This "redistribution redistribution" was either against the terms of Yahoo's contracts with its data providers or it was ridiculously expensive.
Redistribution redistribution, or "white labeling," is either not allowed or is very expensive because it means customers don't have to go to the original data provider. This cuts into data provider's revenues. In order to afford the expensive licensing costs, Yahoo would have to get some sort of ROI from its finance API. Since Yahoo didn't charge for the API, either they were losing tons of money or they weren't paying for redistribution redistribution.
Either way, Yahoo had to discontinue the service because it didn't make them any money and could have cost them a ton of money.
Google also offers a free finance API but, now that data providers are aware of Yahoo's redistribution redistribution, it seems likely that Google's service will be next. Google doesn't support the API, meaning developers can't get help when a call doesn't work or historical prices are unadjusted.
Intrinio provides good options for developers looking for a Yahoo finance API replacement, especially if they need stock prices. There are many reasons to work with Intrinio - Intrinio provides free data for startups and Intrinio supports its REST API and WebSocket API. This means that service won't suddenly be cut off and users can talk to Intrinio about where the data comes from, how to access it, and how data is defined.
Just like Yahoo's Finance API, Intrinio's Financial Data Marketplace provides many kinds of data via a single API, making it easy for users to get the data they need. Finally, Intrinio's mission is to make financial data affordable and accessible. This means Intrinio has lower prices than traditional financial data providers and even offers a free developer sandbox to all users so that you're able to test the data before subscribing.
Replacing a free data source is never easy, but Intrinio is a great alternative to Yahoo. We can only wish Yahoo would have called us before shutting down their service - we would have given them redistribution redistribution rights that would have allowed them to stay in business.