Goldman’s Symphony of Babble
… And they said, Go to, let us build us a city and a tower, whose top may reach unto heaven; and let us make us a name, lest we be scattered abroad upon the face of the whole earth.
And the Lord came down to see the city and the tower, which the children of men builded.
And the Lord said, Behold, the people is one, and they have all one language; and this they begin to do: and now nothing will be restrained from them, which they have imagined to do.
Go to, let us go down, and there confound their language, that they may not understand one another’s speech.
So the Lord scattered them abroad from thence upon the face of all the earth: and they left off to build the city.
...MUCH MORETherefore is the name of it called Babel; because the Lord did there confound the language of all the earth: and from thence did the Lord scatter them abroad upon the face of all the earth.Sources at Goldman tell us that Biblical reference was not the inspiration behind “Babel” – the bank’s top secret project to develop a new chat function that could take on the unrivaled dominance of the instant messaging platform found on Bloomberg terminals.*
—Genesis 11:4–9
It may, however, be a fitting one.
Since plans for the Wall Street chat project were reported by the Financial Times, many have been scratching their heads as to why Goldman feels the need to develop a new messaging service. There are some obvious reasons, but some not so obvious ones too. Here, we discuss various theories that we have picked up in our reporting on this issue.
First though, some quick background.
Goldman recently approached several other banks and financial companies with a view towards creating its new chat platform. The culmination of a more than year-long project, the plan involves uniting technology created by Perzo, a California-based start-up, with an internal system developed at Goldman. That system is “Live Current,” a messaging or Twitter-like application, rolled out to Goldman people last year. Once Perzo is combined with Live Current, the new chat function could launch as early as the second quarter of next year. Companies including JPMorgan, BlackRock and Morgan Stanley have been approached to join the project, which has been nicknamed “Babble” by the Street.
As an aside, we can reveal – exclusively on FT Alphaville – that the real name of the new chat function will be “Symphony.”
Why is Goldman devoting a significant amount of time and money to this undertaking? Here are some thoughts.
1. Bloomberg is expensive. It’s true a subscription to a Bloomberg terminal comes with a hefty price tag of around $20,000 a year. That’s a painfully high amount to pay if you are not using the terminal for much other than its messaging function, known as Instant Bloomberg. At a time when banks are under intense pressure to cut costs, the ability to develop a chat function that could cost peanuts to plug in compared to a Bloomberg is an attractive alternative.
2. Bloomberg is eating Wall Street’s lunch. Did you know Bloomberg is now the proud owner of a very successful trade execution business? With your $20,000-a-year you also get the ability to execute trades over Bloomberg’s swap execution facility (SEF) or bond trading platform – often for zero or very low commissions. Banks quite obviously do not like this, and developing Symphony might be a quick and easy way of inflicting pain on what is proving to be a growing competitor....
