Nathaniel Popper of The New York Times reports about how some Wall Street firms are seeking an alternative to Bloomberg LP’s services in the wake of the data and news service company’s snooping scandal.

Popper writes, “Two competitors to Bloomberg — Thomson Reuters and Markit — have already signed an agreement to develop the technology, according to people involved in the deal who requested anonymity because the negotiations were not complete.

“Reuters and Markit are said to be working in cooperation with banks including Barclays, Citigroup and JPMorgan Chase, the people said. Deutsche Bank and Goldman Sachs have been even more involved, agreeing to use the service when it is introduced. The program would allow bank employees to talk to business partners at other firms in the way that they do now on the closed Bloomberg network. Such chat systems are vital to everyday work on Wall Street, like communicating with competitors and clients to work out prices for trades.

“One banker involved in the conversation said: ‘The chat application within the Bloomberg terminal has become a very powerful tool. If that didn’t exist, we’d have a substantially lower need for terminals than we do.’

“The effort to create a new messaging network was in motion months before Bloomberg’s customers began to complain about the confidential information available to Bloomberg journalists. Both developments underscore the frustration on Wall Street with the powerful place that Bloomberg occupies in the financial infrastructure, and the lack of alternatives to its expensive terminals.”

Read more here.

Simon Dumenco of Ad Age deconstructs the Bloomberg snooping scandal and what it means.

Dumenco writes, “Bloomberg News’ admitted misuse of its power is worth deconstructing here, in Advertising Age specifically, because we’re one of the more than 440 publications worldwide that license Bloomberg journalism. (Adage.com occasionally runs Bloomberg stories.)

“For those of us who sit outside the Bloomberg bubble, it’s easy to understand how some of its reporters felt entitled to snoop. The company, from the top down, is ego-driven — it was founded, of course, by the current mayor of New York City — and because of the absurd economics of the Bloomberg terminals, which rent for roughly $20,000 a year per subscriber, the Bloomberg empire is awash in cash that almost defies comprehension. Bloomberg LP is 88%-owned by Mike Bloomberg, which has made him the seventh-richest person in America, with an estimated net worth of $27 billion.

“Bloomberg’s monument to himself, glittering Bloomberg Tower in midtown Manhattan, has a sprawling newsroom that architecture critic Paul Goldberger once called ‘one of the most exhilarating workspaces I’ve ever seen.’ Given that vibe, it’s also a monument to that lost post-Watergate, pre-internet golden era of journalism when a lot of journalists actually felt powerful, not embattled.

“In fact, Bloomberg newsrooms are among the last remaining precincts in which journalists don’t constantly feel like members of an endangered species. Enabled by the Bloomberg-terminal lotto money, Bloomberg News functions within a sort of reality-distortion field that shields it from the harsh economic realities other media companies face these days.

“Bloomberg, the man, tends to get what he wants (he spent $108 million on his self-financed campaign to win a third term as mayor); likewise, Bloomberg, the media empire, tends to get what it wants. Though Bloomberg has had some layoffs here and there — notably in early 2009 at Bloomberg Radio and TV — it’s never really been hesitant to spend big. (One journalist I know took a job there after Bloomberg made him the proverbial offer he couldn’t refuse: a more than $50,000 raise to jump ship from a competitor.) ”

Read more here.

Neil Irwin of The Washington Post writes about how the recent Bloomberg snooping scandal illustrates what drives today’s business journalism.

Irwin writes, “The interface, while not particularly hard to learn, is not intuitive, so people who are used to it tend to want to stick with it. It is not uncommon for hedge fund types switching jobs to have in their contracts that they will have a Bloomberg terminal at their new job. And the terminals have email and chat services that only subscribers can use, and which many Wall Street types use to trade gossip and tips with each other.

“You can’t think about Bloomberg News without understanding that this is the ecosystem in which it exists. The journalists there also create some excellent work on topics that have nothing to do with financial markets, but their bread and butter, their raison d’etre is to be one more thing that makes the Bloomberg terminal something that financial professionals can’t afford not to have.

“For Bloomberg, in other words, the terminal business is so lucrative and so important, that it can spare no expense to make sure that if a plane crashes in Mozambique or Hungary appoints a new central banker or, say, a senior executive of a major investment bank has been forced out of his job, the news will pop up on a Bloomberg terminal first.

“Which brings us back to the events of the last few days. The practice of letting journalists access information about when subscribers had logged in and what broad categories of data they accessed pits the two imperatives of Bloomberg’s strategy against each other. On the one hand, it wants to do everything it can to ensure that its reporters are drumming up information that the competition isn’t. On the other, anything that discomfits the subscribers who are paying the bills could endanger the whole enterprise.”

Read more here.

CNBC senior economics correspondent Steve Liesman writes Friday about the remaining unanswered questions surrounding the Bloomberg snooping scandal.

Here are some of them:

If editors knew about the issue in 2011, why was the practice only banned in 2013 after Goldman Sachs complained?

The appearance, according to Roush, is that clients are calling the shots on journalistic ethics at Bloomberg. “That causes me to worry what’s going to happen the next time a large client of Bloomberg comes to the company and says ‘We don’t like what you’re doing,’ ” Roush said.

What changes have really been made?

Doctoroff said the company has created a new position of client data compliance officer, “who is responsible for centralizing our data security efforts.” He also said the company now prohibits access to the private information for “reporters.” But the company has said nothing about editors and news executives, such as Winkler, who could potentially tell reporters what they have gleaned from the information.

Where’s Bloomberg’s coverage of the breach?

Roush points out that the New York Times was able to put the Jayson Blair plagiarism scandal behind it a decade ago because it wrote the definitive story on the incident. Roush and others say Bloomberg’s coverage has been non-existent. There appears to be a company policy that it does not write about itself. That policy conflicts with its otherwise blanket coverage of central banks, many of which have made public statements about the breach. The company has declined requests from CNBC to interview its executives.

Read more here.

Bloomberg LP announced Friday the appointment of Samuel J. Palmisano, the former chairman and CEO of IBM, to serve as an independent adviser regarding the company’s privacy and data standards.

The financial news and data company has been criticized in the past week after it was disclosed that some of its reporters had access to information about some of its Wall Street clients through the Bloomberg terminal.

Palmisano will immediately undertake a review of the company’s current practices and policies for client data and end user information, including a review of access issues recently raised by the company’s clients.  In addition, Palmisano will make recommendations and advise on the implementation of any enhancements to these practices and policies, including the independent verification of the company’s systems and procedures.

Palmisano will report to Bloomberg’s board of directors.

To assist Palmisano and the company in the review of data and privacy issues, the formulation of recommendations, and the implementation of any recommended enhancements, the Board has hired Hogan Lovells and the Promontory Financial Group. Additional expertise will be retained as necessary.

In addition, Bloomberg announced that Clark Hoyt, editor-at-large at Bloomberg News until Friday and formerly the public editor of the New York Times, will conduct a review of Bloomberg News’ relationship with the company’s commercial operations, including privacy and data policies.  He will make recommendations stemming from that review.  All necessary resources will be made available to Hoyt, who will report to CEO Dan Doctoroff.

 ”Clark Hoyt is a great journalist and an impartial critic,” said Bloomberg chairman Peter Grauer in a statement. “His experience as the Times’ public editor and his understanding of Bloomberg will serve us well. We are going to engage with our clients and other constituents in this process to ensure we’ve incorporated their advice.”

Citigroup is stopping traders in its foreign exchange division from using internal chat groups on their Bloomberg terminals, reports Alice Ross of The Financial Times.

Ross writes, “Citi said shutting those chat groups would increase security and had the advantage that not everyone would need a terminal to access live internal information about clients’ trading activities – a sign that the bank is also seeking to reduce costs. Bloomberg charges up to $20,000 a year for the use of a terminal and almost all traders at investment banks have sole use of a terminal at their desk.

“The move is also an attempt by Citi to steer both traders and clients away from relying on news wires and towards its own internally produced market news.

“Other banks also use internal chat groups via their Bloomberg terminals. Comments made in the internal chat group can be seen by all members and are used to share information about what clients are buying and selling. Many use code words to identify clients due to security concerns.”

Read more here.