“What is so special about the Bloomberg chat function that everyone talks about?” someone wrote on LinkedIn this week. “Sounds like they use it for insider trading.”
It is insider trading, but not the illegal kind.
The question came up because Bloomberg announced a 10% price increase and a number of news articles suggested the company might lose business as a result.
The chat application is a key reason that won’t happen.
Most people associate Bloomberg LP with its media arm, Bloomberg News or its cousin, Bloomberg Television. But the company makes its money selling data to financial professionals. As of January, the service will cost $30,000 a year. There are 330,000 clients.
You can think of those people as “insiders” in a gated community. In addition to access to stock prices and news, they are included in an email and instant message network.
If you have a Bloomberg terminal you can look up and immediately email or send an instant message to anyone else. The system indicates if the recipient is online and whether or not they read the message.
Only recently have those features been available on communication platforms such as Facebook Messenger or LinkedIn. Bloomberg has had them for almost three decades.
Imagine there is a private club that everyone in town has belonged to for 30 years. And then two new clubs open up. Even if the new facilities are comparable, it’s not where people go.
Morever, it would take eons to map and rebuild a comparable directory. Imagine you need the email for a guy named Dan Smith who works at Citibank. It’s going to be hard to find.
Bloomberg clients appreciate the irony that the most valuable feature on the world’s most expensive data, news and information platform is actually a communication system.
A deeper irony is that this system was built by an engineer to communicate with other engineers. It wasn’t conceived or rolled out as part of any particular business strategy.
But that story is for another day.
(Part of a series about lessons from three decades at Bloomberg LP. Follow me on LinkedIn for more stories about Bloomberg, fintech product innovation and life lessons from my parents.)