Subscribers See Bloomberg Looming as Competitor

Thursday, 16 May 2013 09:11 AM

By Dan Weil

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Part of the reason why Wall Street firms are so concerned about Bloomberg reporters spying on their user data is that Bloomberg is increasingly intruding into their business space.

The banks are worried that Bloomberg can gain a competitive advantage through its snooping, The New York Times reports.

Bloomberg is entering some of the same businesses dominated by big banks. The company offers platforms to trade stocks, bonds and more complicated financial products.

Forbes Columnist:
‘Who the Hell Cleared This?’

Bloomberg is even moving into Wall Street's bread and butter — wealth management and investment research.

“If you add all this stuff up together, they do look increasingly like a brokerage business,” Larry Tabb, founder of the consulting firm Tabb Group, told The Times.

While Bloomberg has been careful to tread lightly in these areas to avoid alienating customers, “it makes some of these brokers think, are these guys friend or foe?” Tabb said.

Bloomberg maintains its trading operations are completely separate from its data operations.

"Although we have long made limited customer relationship data available to our journalists, we realize this was a mistake," Bloomberg CEO Daniel Doctoroff wrote on Bloomberg's blog.

"To be clear, the limited customer relationship data previously available to our reporters never included access to our trading, portfolio, monitor, blotter or other related systems or our clients' messages. Moreover, reporters could not see news stories that clients read, or the securities they viewed," he wrote.

There's a danger in this for Bloomberg, David Weiss, a senior analyst at the Aite Group, told The Times. “They have to be very careful. ... You don’t want to mess with a $6 billion a year golden goose.”

One point worth keeping in mind is that the information Bloomberg reporters gathered was pretty trivial. Knowing when a subscriber last logged in to the terminal or what pages he/she looked at hardly gives the firm a significant competitive advantage.

Nonetheless, it's understandable that subscribers would be concerned about any violation of their privacy.

Forbes Columnist: ‘Who the Hell Cleared This?’

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