Tuesday, March 27, 2007

VC Forum - Web 2.0 and Wall Street

Panel with Tim O"Reilly and William H. Janeway, Vice Chairman, Warburg Pincus and
Peter Bloom, Managing Director, General Atlantic LLC
. What can Web 2.0 learn from the financial markets and visa versa? Attributes of Web 2.0 demonstrated on Wall Street. Speed matters. e-Trade strived for a 9 second trade. Average trade on NYSE is now 30 milliseconds. A thousand transaction a second have become the norm. How does this compare with travel transactions which is measured by 2-3 second response time? Web 2.0 economy - network intelligence phenomenon. Focus on transactional efficiency. The pressure of Wall Street to push down the cost of transaction cost down to zero. Profits as "agents" was no longer possible (sound familiar?). Those who had been agents became traders. This is just like a GDS becoming a travel agent (e.g. Travelocity). Now promoting marketplace based on automated trading systems. Technology turning agents into principles. The interaction of computers and human beings. Now computers trade with each other but are shut off switching to human trading during a major drop.

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