The Fall of Bloomberg?

This week Google is expected to close a deal for an investment in the messaging startup Symphony, valuing the company at $650 million. Symphony is backed by a coalition of investment banks, including Goldman Sachs, Morgan Stanley, JP Morgan Chase, BlackRock, and Wells Fargo. This coalition formed after Bloomberg journalists were accused of using their access to Bloomberg terminal data to spy on customers’ activities, including when and how they used terminals, as well as transcripts of their chats with customer service representatives, in order to aid in their reporting. Any Bloomberg employee could, with the stroke of a key, see how many times a customer used a particular function or the last time they had logged in. Shortly after complaints from Goldman Sachs and JP Morgan were aired, Bloomberg CEO Dan Doctoroff announced a change in the privacy policy so that journalists could no longer see such information, but the damage had already been done.

That’s where Symphony comes in—where Bloomberg customers often use their terminals primarily for its chat functions, Symphony offers an open-source cloud messaging service that developers can customize. In regard to security and regulatory compliance concerns, Symphony uses a combination of data encryption, information barrier controls, and content retention interfaces; the startup has also come to an agreement with the New York Department of Financial Services to preserve chat transcripts of major banks in order to meet record-keeping regulations. The service is free for individual users and $15 per user per month for businesses, drastically lower than the premium of $1800 per user per month charged by Bloomberg. And although Symphony cannot yet measure up to its rival’s enormous financial data capabilities, given the eagerness of major investment banks to move away from the incumbent, Symphony may yet be the company to finally overtake Bloomberg.

-Wendy Chao