Mike Bloomberg, Social Networking Mogul

David Carr, bringing bylines to DealBook, notes that Michael Bloomberg is going to be hanging out with the MySpace and Facebook honchos (that's Rupert Murdoch and Mark Zuckerberg, for those of you following along at home) at Herb Allen's Sun Valley power klatsch this week. Carr tells us that Bloomberg "has proven to be one of the most durable and consistently innovative media barons of our time". What he doesn't tell us is that Bloomberg was arguably the world's first social-networking billionaire. What can Murdoch and Zuckerberg learn from him?

Bloomberg (the product, not the man) got its start in the financial world by providing real-time bond-analysis tools which were simply unavailable elsewhere. If you were working in fixed income and you didn't have a Bloomberg – well, let's just say you wouldn't continue to work in fixed income for long. But Bloomberg today is much, much bigger than a bond-analysis tool. People who don't know their convexity from their modified duration are glued to their Bloombergs more or less all day, at work and often at home as well.

And a lot of the reason is that Bloomberg invented social networking before Mark Zuckerberg was even born. Bloomberg LP was founded in 1981, and Bloomberg saw very early on the huge potential of two-way information flows. Rather than just sending information to his clients, he would allow them to ask specific questions and get immediate answers. Once that was possible, it was relatively easy to allow them to message each other. Long before email really took off, Bloomberg messages were regularly flying all over Wall Street, both within firms and between them.

At the center of it all was an open directory of pretty much everybody on the Street. Everybody had his own page on Bloomberg, could be found very easily, and could communicate equally easily with anybody else on the system, bypassing the phone calls and layers of secretaries which had previously intermediated the conversation. It wasn't long until a Bloomberg became as necessary as a telephone as a tool for keeping in touch. And even today, long after every firm has opened its systems up to the internet and email, many research notes and messages continue to be sent out on Bloombergs instead.

Bloomberg's success mirrored that of Facebook more than that of MySpace, because it was exclusive. People were happy putting all their contact details out in the open on Bloomberg, because the only people who could read it were other people with Bloombergs, and a Bloomberg cost $20,000 per year. The system was closed and proprietary, and policed in a draconian manner, to the point of automatically banning messages containing profanity.

Interestingly, Bloomberg to this day has never really embraced the internet. He saw very early on the value of remaining exclusive, and stayed that way. Meanwhile, Facebook, looking for crazy-high growth rates, is becoming increasingly open – something which hasn't always gone down well with its Ivy League early adopters.

Bloomberg made his billions, in many ways, by shunning the openness of the internet – something no one else at Sun Valley has the nerve to attempt. But even the internet moguls could learn a lot from him in terms of how to build and maintain a loyal community of users.