Monday, February 12, 2007

The Web as Research: Connotate Boosts Goldman Sachs' Proprietary Research

The announcement that Connotate Technologies, Inc. has inked a deal with investment bank Goldman Sachs to supply them with content mining technologies that can create proprietary research doesn't come as a complete surprise, but it's nevertheless a telling event. Investment banks have long taken positions in promising content technologies that can give them an edge with their clients, especially when they can help to supply a proprietary edge in content services that is increasingly hard to come by in today's open market for financial information and research. What's interesting in this deal is that Connotate's technology in essence allows its clients to develop their own research channels by mining their own content from the Web and other sources supplied by Goldman Sachs to their clients via Connotate's technology. Think of it as a primary research workbench and customized delivery and filtering tools all in one convenient package.

Broker research generated by investment banks has long been bashed as being little more than sales collateral for hungry trading desks, a factor that has tended to suppress the willingness of their clients to pay for research reports of any kind. Factor in offshore research houses that are used by more and more firms to crank out custom research on investments and it's an increasingly bleak picture for the traditional stock research report. To compensate for this major investment banks are developing more sophisticated tools to feed insights and data to their trading partners that are more likely to be ingested as trade-moving information than as "when I get around to reading it" reports flooding the in-boxes of portfolio and fund managers.

Helping customers filter and interpret insights in ways that meet up with their immediate business needs is as important as the information itself, a factor that is turning both financial research and other forms of business intelligence into an extension of the real-time information marketplace. We'll continue to see stacks of printed reports pile up in the offices of buy-side analysts for some time to come, but increasingly the aggressive money is being made by those who are willing and able to turn research into immediately actionable insight. Expect the business information sector as a whole to move increasingly towards these kinds of increasingly real-time information products that find the diamonds in the rough seas of online and private information sources.
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