Max Bowie: Is ‘Social’ Data Tweety Pie in the Sky?

Max Bowie, editor, Inside Market Data

Before setting the Twittersphere abuzz with news of its merger with Deutsche Börse, NYSE Euronext held, appropriately enough, a panel discussion on the role of social media in news, chaired by StockTwits CEO Howard Lindzon.

As news feeds go, Facebook’s may never replace those from Dow Jones, but firms and vendors are increasingly using social media to disseminate content—from those who use it for marketing, to those sending out stock alerts or breaking news via Twitter.

Take the Chicago Board Options Exchange, which unveiled a Facebook page to attract a wider audience for its news and its training programs, while ratings agency Fitch “tweets” short messages about credit spreads and market information.

This isn’t all new: The Commodity Futures Trading Commission (CFTC) only recently launched a Twitter feed to inform the public about its meetings and activities, but already had presences on YouTube, Flickr and Facebook. The Securities and Exchange Commission and the Department of the Treasury are among other government agencies that use Twitter to promote transparency.

But—as staff fired for careless postings about their boss will attest—there are risks associated with any “social” or “community” application. The UK Financial Services Authority recently fined a former MF Global analyst £50,000 ($81,000) for sending misleading information that impacted Enterprise Inns’ stock price to clients over Bloomberg’s messaging application. And if you don’t consider IM a form of social media, ask Bloomberg’s own global head of social media, Rob Harles, who calls the vendor’s terminal “a social network in itself—it’s a Who’s Who of anyone in finance.” Meanwhile, the multimedia aspects of rival Thomson Reuters’ Insider news tool also give a hefty nod to social media—something the vendor deliberately took into account when designing it.

Another issue is compliance with data licenses. What if someone tweets a price movement or a trade ahead of the standard 15-minute delay required before data is deemed free of charge?

Hence, one of the important issues raised by participants on the NYSE/StockTwits panel was the value of curation—not just filtering the white noise of blogs to find relevant information, but also assessing the credibility of information from online sources.

Ultimately, people want to consume information in different ways, and social networks like Facebook have supplanted many traditional forms of communication, and made social media more sticky. So building a professional information flow into the channels that people use as part of their everyday lives can get information to consumers faster.

And it works: NYSE/StockTwits panelist Herb Greenberg, a senior stock commentator for CNBC, described checking Twitter one morning before his usual news sources, which alerted him to a company that he otherwise wouldn’t have spotted until much later.

Blurring the Lines
As consumption habits shift to new data sources, consumers are also looking to new delivery mechanisms, which allow these to gain a foothold in people’s social lives, blurring the lines between work and play.

For example, mobile data vendor CarryQuote’s recent email campaign for its iPad and smartphone software contained the subject line, “Can you compete with Angry Birds?”—a reference to the popular iPad game. And Nordic bank SEB developed an iPad app that provides market data and research to its institutional clients, while data giant Bloomberg launched an iPad app that gives Bloomberg Anywhere subscribers access the full content and functionality of their Bloomberg terminal from anywhere via their iPad.

And the notion of Apple-like “app stores” is beginning to take hold—from the online marketplace of data and tools available via broker UNX’s Catalyst EMS to on-demand data providers such as Xignite. Some technologists believe app stores for financial markets—where professionals can assemble their own collections of applications—are the next logical step up from cloud computing.

Who knows, perhaps in future, subscribing to a datafeed will be as easy as following someone on Twitter?

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