Brochureware Case Study of the Week: “The Bloomberg of the Internet”

If Enron hides astrophysics-driven book-cooking in an ever-expanding universe of shell corporations and no one is there to see it, do pensioners still suffer? “Monitor110 gives you unique information few have seen before it becomes news.”

London-based Fintag — “del.icio.us for ticker symbols” — notes this FT Alphaville Q&A with Roger Ehrenberg of Information Arbitrage and Monitor110 — “the Bloomberg of the Internet.”

The NMM — “information abitrage for poetry majors” does its standard postmodern tech PR analysis — “BS detection algorithms for wetware endpoints” and continues to recommend ignoring nonsense in favor of identifying people who know what they are talking about and following what they have to say.

The Information Arbitrageur, naturally, blogs himself being blogged by the FT blogger, and leverages his 15 minutes to aim a shout out, with props, at Ogilvy key influential Guy Kawasaki.

Monitor110 will help “institutional investors turn Internet information into alpha generation”. FT Alphaville translation: “we’ll help you extract lucrative, investable information from the Internet.” Ehrenberg’s company has received financing from, among others, Draper Fisher Jurvetson, the venture capital firm that backed Skype before it was sold to Ebay for $4.1bn last year. In a past life, Ehrenberg was CEO at DB Advisors, the $6 billion trading business of Deutsche Bank AG , prior to which he was an MD at Citibank, with responsibilities across the bank’s global derivatives, capital markets, M&A and capital structuring divisions.

FT Where did you get the idea for 110?

RE My partner Jeff [Stewart] was the one that had the original idea, that was really a result of speaking to potential customers and asking them, “what are the kinds of tools would you find useful? What would make your lives easier?” We spoke to executives at large corporations, different investor relations departments. A lot of the feedback we got was that finding valuable information on the Internet was very, very difficult, and that clients would pay to have a tool that helped them do that.

FT So you’re trying to be the Bloomberg of the Internet?

RE We’re not talking about replacing, we’re talking about complementing, because Bloomberg, Reuters, Thomson, do a fine job with market data and what we call Tier One news, which is the stuff of the FT and the Wall Street Journal, and the largest global publications and the wire services. But that information, at this point, has become very commoditised. It’s also very easy, just as a technical matter, to search that kind of data.

The notion that, say, Wall Street Journal investigative reporting — teams of highly trained people poring over incredibly boring and opaque information to discover new facts — is a process that the Internet has leached of value is a key assumption of the blogging-industrial complex.

It’s nonsense.

Futhermore, Dow Jones, Reuters and Thomson, at least, and many others, as I seem to recall, are also working hard on newsflow arbitrage sofware, and have been for some time.

Where are my notes on that?

Ah, here we go: Hustle & Newsflow: New Buzzmarket Machines (April 29, 2006); Terminology Sprawl Watch: ‘Newsflow Algorithm‘ (March 30, 2006); and Wall Street & Blog Street (April 5, 2006), the latter an interview with an Always On evangelist for “newsflow arbitrage” which we gisted as follows:

“Blog your hedging with the agile glitch-wiki smart mob, using attention-monetization arbitrage.”

If you want to research the prior art in this area, you need only ignore the pseudo-terminology –and the idiotic notion that this approach to churning through noise in order to find signal is revolutionary and unprecedented — and do some googling on “computer-assisted reporting.”

In its tracking of newsflow on itself, Monitor 110 cites a March 2005 milestone in its development whereby, allegedly,

The Wall Street Journal Online reports that Monitor110’s persistent search service gives Wall Street investors a competitive advantage.

But it does not link to or reproduce the story.

So how are we to confirm that that is what the WSJ reported, rather than, say, “Monitor 110 says that its persistent search service gives Wall Street investors a competitive advantage.”

I want to read detailed customer cases studies.

The site locked in its venture funding in October 2006, upon which it started getting alt.press from the likes of Tech Crunch.

Hardly a stellar recommendation.

So what does this early-adopting visionary turned late entry to the market have to add to the NMM database on postmodern viral marketing gambits in the transaction technology sector?

The internet is obviously a rapidly growing and an exponentially larger data set, but along with that is the difficulty in navigation, because you don’t have editors neatly extracting entities and labelling things and articles, and you also don’t necessarily know the reputation of the creator of the content.

Or, when you do, whether that reputation is deserved or not.

Welcome to the freaking human condition.

“We are massively extending the universe”:

What we’re doing is just massively extending the universe from which institutional investors can discover ideas and information, either for trading or for research.

When any idiot can write the Web, most of the Web will be written by idiots.

And shills.

FT You said it’s really easy to find information from the traditional sources — is that part of the reason why people find your proposition so attractive? Because of the idea of everybody’s in the market, and it’s getting harder and harder to find that one thing that nobody knows about yet?

Who says users are finding the proposition attractive?

The FT blogger does not profile the progress this startup has made or discuss its business model or subscription volume to date. It has only its $11 million funding round to show for itself so far.

Which is, of course, not chopped liver. But the press release on BusinessWire did not exactly generate oceans of newsflow.

RE There’s no question that early discovery is a key piece of the puzzle. And it’s not only early discovery though, it’s discovery at all, because there are topics that nobody but a handful of obscure blogs are talking about. Not only can we pull those sources in, but we do advanced filtering – we’ve tickerised this unstructured universe. That’s really the key. So it’s the intersection of institutional investor focus and domain expertise, where we use companies and investment teams as the algorithms that are used to filter this enormous data firehouse that’s streaming through in real time, together with very sophisticated algorithms and technology, using advanced linguistic processing to analyse that data on the fly, and to deliver it to the users in a portal that’s very intuitive for those that have used the Bloomberg, Reuters and Thomson’s.

On the wave of Web sites with this same basic idea, including fintag and stocktickr — which I enjoy playing with but have never found any actual use for — see Think Once, Implement Many (March 2006), on “Digg for stocks.”

I should try to update that growing list. It would be useful to locate this new venture in the universe of its peers, try to see who currently occupies the magic quadrant.

See also Tickerize my Podcast and Ticker-Hacking Google Finance.

FT As you say, you’ve got the star blogs, and then you’ve got chatter. Now, in the beginning, it’s going to be hard to assign a reputational value to the blogs that are chatter. Won’t it take a while of, ok, this blog has talked about this for a while, and it’s not a scam or a pump-and-dump scheme? Is it a learning process?

It’s not that easy to assign a reputational value to the star blogs, either, don’t you find?

The answer is yes.

RE The answer is, yes. One of the reasons that Monitor110 is so uniquely positioned to do what we do, it’s our intersection of people and technology. We have an activity that’s specifically devoted to source expansion, and we may well discover a new blog and say, you know what, even though this is a young blog, it’s actually written by a former executive of Sun Microsystems, so because of this person’s domain expertise, we are going to assign this blog a high reputation, even though it’s a very new blog. So there are these special lists that we’ve created, that have an impact on the weighting in our reputation algorithms. If a blog is put on that list, then that will rapidly jump its reputation score in the system.

GIGO?

We have an entire activity that’s devoted to that very issue, the issue of data quality. And the other thing that I think is important to note is, even though we leverage the power of persistent search technology and advanced linguistic processing, we think of ourselves much more in the Reuters, Bloomberg mould, of this portal with tickers and news and the ability to rapidly search and discover. It’s just we are doing that on this much, much, much larger and much more complex data set.

Bloomberg for the Internet.

Del.icio.us for ticker symbols.

Digg for stocks.

And so on and so forth.

Along the same lines, recall this item on “an E-Bay ratings system for counterparties.”

So purely from the PR point of view, what we apparently have here is simply another gizmo that takes the form:

“X is [Web or Journalism or Research or Truth 2.0 brand name] for Y.”

Unfortunately, that approach to marketing has come to be associated in my mind with the operation I profiled in Pssst, Got Dollars? 2.0, which managed to make Emily Chang’s list of Web 2.0 innovators by billing itself as

… the first service that allows individuals and small companies to exchange their foreign currency notes directly with each other without using the services of a bank. There is a unique price for each currency at which transactions happen, the same that is used by the largest financial institutions.

In other words, the black market foreign exchange economy 1.0.

It’s just when the doleiros of Copacabana start using SMS and IM, they start calling themselves “4G P2P disintermediators”.

Modesty aside, I note that I proposed “Newsflow Arbitrage for Poetry Majors” as a new branding campaign for the New Market Machines blog back in June2006.

Whereas Information Arbitrage started contributing to the commodity content wastestream in July.

And my phrase “open-source Bloomberg box” — please don’t sue me — goes back to 2005.

Why “open-source Bloomberg box,” by the way? Are we disdaining the Reuters terminal, Thomson ONE, et al., to endorse Hizzoner’s product? I explain that here. Basic answer: BB alliterates, and you hear the phrase more often in New York, probably, than in other places. I never get any time on any of those proprietary gizmos, so I really couldn’t speak meaningfully about the comparative user experiences they offer. So please don’t sue me.

The question that never gets answered is why an institutional investor would want to spend time and treasure doing what this service enables you to do:

• Watch an intuitive aggregate activity view of real-time chatter across multiple tickers, watchlists and investment themes
• Know at a glance what companies and topics are generating buzz
• Scan a scrolling news view to spot interesting posts and articles as they appear
• Discover hot topics and trends as they emerge

I suppose the answer is basically that you want to arbitrage out the lemming effect: take a short position on the nonsense that the suckers who believe what they read on Blogging Stocks are falling for.

Known colloquially as “dumping other people’s pumping.” Perfectly legitimate, so long as you are not secretly in contact or business with the pumper as you take your dumper.

On the other hand, time is money because life is short.

Which is why I stick so stubbornly to the notion that a good information service is one that refuses to publish or vouch for nonsense and uncorroborated hearsay.

24-7-365 professionals, with long, visible track records, doing the due diligence so you do not have to.

See also The Whisper Factory in Action.

On vague and glitteringly general predications of “first” and “unique” as key indicators of hackneyed tech PR, see also the strange case of InfomediaTV.

That said, I guess I will have to try to subject the thing to a Turing Test.

Because NMM Corollary No. 7 applies: Just because it is marketed witlessly does not mean that it might not have something interesting under the hood.

It seems to me that there are enough of these variations on a basic theme out there that someone ought to do up a comparative features matrix one of these days.