steve baker: Ben, you make good points. My only response would be that Bloomberg's competitors in the information markets of the future are less likely to be legacy players like Reuters than folks like Google. Oct. 19, 2009, 10:47am
steve baker: thanks for the comments. Carsten, I agree (tho not as a user) that Bloomberg excels in its niche. The question is how they can expand their audience. I don't look at social media and all that open source stuff as a panacea. But it's an opportunity. The problem boils down to this: There's a tiny minority of information that goes for a big price. Bloomberg has a good foothold in this market. There's a much vaster realm of information that is rapidly becoming free. That's why mainstream media is in such a fix. How can Bloomberg make money in that world? Does the box, or the revenue from the box, help? Oct. 17, 2009, 8:36am
Ben Weiss: I think a quick review of Bloomberg's strategies over the years might further prove their general shrewdness and ability to adapt to the web and new business realities around them. Bloomberg is the best, and have been since their foundation, primarily due to the ineptitude of Reuters and Thomson, who are now married in what can only be described as a marriage of incompetence. When comparing Bloomberg to say the Reuters 3000Xtra, one can immediately see a difference in UI, experience, and available content. Bloomberg has always been a one-product house, whereas Reuters/Thomson have always tried to build tools for every individual player. As a result, you can always find what you want on Bloomberg (and it always seems to be in the right place), whereas competitor offerings are just not very good in comparison. The decision to include proprietary messaging in the 90s was brilliant, coupled with a very strong focus on supporting the buy-side, created a killer app for all serious players - if you wanted to talk with the buy-side, you needed a Bloomberg. The decision to stay in terminals until the last minute was a conscious and shrewd move. Reuters and Thomson had 'hosted offerings' earlier, but they were slow, and caused traders to go nuts. When consultants came into the big banks and suggested Bloomberg sharing, particularly outside trading, they met Bloomberg's next brilliant move - Bloomberg Anywhere, and the subsequent fingerprint scanner. This ensured that only one user could use the 'terminal' at one time, even if it was a 'hosted terminal' accessible via the web. All in all, it takes a ton of genius and ingenuity to keep users paying upwards of $1600 per month per user, when a comparable tool can be gotten for roughly half (remember, Market Data was the #2 cost center outside of salaries for large investment houses). Bloomberg definitely gets the web, and like Craigslist and other companies generating ridiculous revenues via the web while baffling 'web analysts', they know how to grow and retain customers (and their subsequent market leadership) on the web. Will Bloomberg control in the future? Depends on their leadership and ability to sustain this great story. I wouldn't be the one betting against them either, though. Oct. 17, 2009, 8:32am
Joe Weber: My question: if BW is a promotional vehicle for selling boxes beyond Wall Street, who will buy those boxes? Are CEOs going to order them up because they'll be advertised in BW? Seems unlikely. If, on the other hand, BW's longstanding access to honchos of all sorts improves content on the Bloomberg site, that would could make that site more popular. Bringing in BW.com's audience by integrating the Bloomberg and BW sites wouldn't hurt either, of course. The boxes then become irrelevant to the rationale for the BW purchase, except as the funding source that makes the company strong. Remember that BW's cachet, 80 years in the making, is the kind of thing that yields access to the Obamas and Immelts of the world. Oct. 16, 2009, 12:12pm
bruce nussbaum: Perfect analysis. I interview the head of Intuit at BIF5 last week and he explained why Intuit bought Mint. Intuit is a PC-based, software product business in a world of social media. Mint lives on the web in that world of social media. If Bloomberg does not migrate to this growing culture of collaboration and participation, it will lose Gen Y and, increasingly, it's entire audience. That requires a huge culture change at Bloomberg and a major change of organization to a social business model. Right now it is a monopoly, much as Microsoft was and is a monopoly, with monopoly profits to play in other fields. Bloomberg is playing in media and it is this media that can help change its core culture--if it is open and able enough. If.... Oct. 16, 2009, 11:16am
notorious: I'm a quant finance guy who uses a bloomberg terminal every day. True, the interface is clunky (but it's also WAY faster than anything I've seen on the web). And the software feels a bit archaic. I wish bloomberg would provide a better API to their data (yes, I've used the excel API, it sucks, and i hate excel). All told though, well worth the $20k/year to my firm. There is absolutely space for a competitor, but I haven't seen one that compares on speed, timeliness, and breadth of functionality/data, particularly on the web. Oct. 16, 2009, 10:25am
anonymous coward: wow, you work for a business magazine and you don't understand the bloomberg business model and how protected it is? the mayor should fire your ass personally, and burn all the copies of your book. Oct. 16, 2009, 8:44am
Carsten Schmidt: Stephen, yes the Internet is everywhere, yes social media is huge, but you treat them as a panacea which neither is. Bloomberg is a single, highly customized and focused product that fills a niche. You say it is data, but if you talk to traders they will tell you it is real time analytics that set Bloomberg apart from news and pure data services like Reuters (and that is much harder to copy). Also, Bloomberg operates in a market which can't allow a 5 minute network outage (just look at the recent Google email outage), they operate in a market where security is highly important (the military doesn't use the public internet either). So the terminal market is not under threat by the Internet but by better analytics -- chances that they will be delivered via the Internet are slim but if they will those companies will have to prove reliability. The learning is also a non-issue because just like Photoshop pros who do go to training classes Bloomberg users need to know shortcuts in their sleep, they need to execute commands in fractions of seconds. In you thinking and writing it might be good to sometimes think outside the box ... and that can mean that the open Internet and social media are not the answers for all of our problems. Oct. 16, 2009, 8:18am