Bloomberg Screws Up with Spying Scandal, But the End Ain't Near

Whenever Facebook makes a change to its privacy settings, it sends ripples of consternation throughout what seems like the entire world. Yet it’s not unusual to read diatribes about the indignity of such privacy breaches on—you guessed it—Facebook newsfeeds. Invariably, in spite of the changes, everyone carries on using the social media mainstay. Why? Because it's simply the best option out there.

Similiarly, for all the fuss being made about the fact that Bloomberg News reporters were using Bloomberg LP terminals to spy on Goldman Sachs and JPMorgan traders and brass—and untold others—not much is likely to change.

If they've already made the switch to—or have been long-time users of—Bloomberg terminals, will hedge fund and investment bank traders run back to Thomson Reuters or try and cobble together a Bloomberg-like terminal with data feeds and messaging? Maybe a few will—and they will be roundly jeered by their peers much like your friend who chose to get off the grid of Facebook because they were worried about Big Brother. “Oh, got it,” the trader’s colleagues will say. “Bloomberg reporters really care about whether you've logged on recently!”

As one contact of mine put it: "Doing the mail is hard."

There is heft to the claim that Bloomberg dominates Wall Street. Its terminals are ubiquitous and occupy a massive portion of trading desktop real estate. Its apps are sticky. And perhaps most importantly: Traders hate change.

So could Goldman Sachs get into the terminal business, as the New York Post reported? If anyone could, it's Goldman. But even so, that wouldn’t help the other 99.9 percent of firms out there.

To me, this is more a of a media/corporate ethics story. But will CEOs tell their IT teams to find a substitute for the Bloomberg terminal? I highly doubt it. After talking to several contacts this week, this is simply a juicy story that makes for good barroom talk.

The most likely outcome is that firms will require Bloomberg to alter their contracts to address privacy concerns.

There may come a day when Bloomberg loses its footing in the terminal space, but that day is not coming soon, and it certainly won’t happen because of an—admittedly boneheaded—blunder by Bloomberg’s news division.

Think I'm wrong? Is that a death knell off in the distance? Send an e-mail to me at anthony.malakian@incisivemedia.com or give me a call at +1 646-490-3973.