The world of financial information is changing. Bloomberg is a giant, with annual revenues of $8.5 billion. But it costs $2,000 a month. Twitter is free.
At tonight’s Pando Monthly event in Los Angeles, Stocktwits founder and former CEO Howard Lindzon talked about how his company drew upon an emerging trend of social media and messaging that threatens Bloomberg’s role as the premiere source of information in finance.
In some ways Bloomberg was the original social network for Wall Street bankers. “They’re a $2,000 a month social network,” Lindzon says. “They’re a news organization and a data company and as soon as chat came around, as soon as they realised you could talk to another broker directly that become very valuable.”
Lindzon sees Bloomberg as trying to hold its place swimming against the modern current of information. Blackberry messaging hit big with bankers, he says, allowing them to communicate about the shares they were buying without people looking over their shoulder. “When I saw Twitter I said that’s the exact same thing, except public,” he says.
Stocktwits, which Lindzon founded with Soren Macbeth in 2008, was an attempt to carve out all of the people on Twitter who wanted to talked about stocks and markets online and give it context.
“Stocktwits anybody can talk to anybody. Twitter anybody can talk to anybody,” Lindzon says. But Bloomberg has walled itself off to try and hold its dominance. It’s driven by a separation that is anathema to the spirit of social sharing.
“At Bloomberg, if I pay my $2,000 a month I’m not going to have to deal with the riff-raff of the world, I can just talk to other smart people. That’s the wall that has maintained the Bloomberg throttle.”
Bloomberg has a great business, but Lindzon feels like its best case scenario is stagnation. “You can’t beat Twitter on the news. Bloomberg comes in, I don’t care how many employees they hire, how many reporters around the world, somebody sees something, tweets it,” he says. “It’s hard to charge $2,000 for news when Twitter does it for free.”
Lindzon says that behind closed doors Bloomberg, this has to be something that’s causing considerable anxiety.
“We’ll look back at what happened at Bloomberg. With Facebook, Twitter, was everybody worried at what people were doing? I got to think Bloomberg was shaking in their boots,” Lindzon says.
Bloomberg announced this week that sales were declining in China, it’s second-largest market. Lindzon thinks the abundance of information will curb demand for Bloomberg in emerging markets. “It was a nice business to get $2,000 a month from thousands of banks and thousand of bankers, but I don’t think that’s growing.”