:: The Park Paradigm ::

Markets for the Digital Generation

As reported in the FT this week:

The London Metal Exchange, the world’s largest base metals market, is looking to turn the 129-year-old exchange from a non-profit entity into a profit-making organisation. The move could pave the way for an outright sale of the exchange or a potential initial public offering.

…The LME is the last big commodity exchange that is membership owned. Its larger peers, the IntercontinentalExchange (ICE), Chicago Board of Trade and the Chicago Mercantile Exchange, have listed in the past five years and, as a consequence, have seen their share prices soar on strong futures trading volume growth. This in turn has added billions of dollars to their market valuation.

and also:

The launch of a strategic review by the LME comes as competition between commodity exchanges becomes more intense as rival exchanges move to compete on formerly sacred turf.

…ICE Futures is owned by the Atlanta-based IntercontinentalExchange, which is understood to be looking at launching electronic base metal futures after the success of recent launches.

“If another exchange wanted to take control of LME’s business, it would be cheaper to do it by launching competing contracts rather than buying it, says John Lothian, president of electronic trading at Price Group, an electronic futures broker.

The exchange plot thickens…

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Yes, AmazonBay is fictional and speculative and is not supposed to be taken literally.

That said, I did smile when I saw this in the FT:

“Three-way exchange merger not dismissed”

If the New York Stock Exchange winds up buying Euronext one major question will remain: what will NYSE chief executive John Thain do about the London Stock Exchange?

Insiders say Mr Thain still very much wants a deal with his London counterparts. But that might be tough to swing if he is still trying to close a complex Euronext merger. Now some Wall Street analysts and exchange shareholders say there is but one logical answer: do both at once.

…Analysts say a three-way merger would make perfect sense and skip ahead one step in the inexorable advance of exchange consolidation. “It is certainly appealing in many ways,” said Joe Gawronksi, chief financial officer at Rosenblatt Securities.

“And you may end up with something like that some day anyway. But because of all the complexities regarding political issues, social issues and integration issues, it would be an extreme long shot. Which doesn’t mean it wouldn’t be a good thing.”

I wonder if they could sort out all the ‘complexities’ by say…March 2008?

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This story has got a lot of play in the blogosphere this week, so at the risk of saying something that has already be said 100 times, the Digital Generation is different: (as reported in Advertising Age)

Only one in four 12- to 34-year-olds can name all four major broadcast networks: ABC, NBC, CBS and Fox.

The finding comes via an online poll conducted by Bolt Media, a 10-year-old Web site that six weeks ago relaunched itself as a place for users to upload videos and photos. About 400 members responded to the questions, including one that asked how respondents spent their free time.

The most popular activity? That would be surfing the Internet, which 84% said they did during their idle periods. Hanging out with friends came in second at 76%, watching movies third at 71% and TV viewing fourth at 69%. The five most-watched TV networks were Fox, Comedy Central, ABC, MTV and Cartoon Network.

“There’s a massive movement going on in people under 30 and how they spend their media time,” said Bolt President Lou Kerner, who once upon a time was a cable analyst on Wall Street before leaving to run TV.com and then Bolt. “Our audience spends lots of time on net, creating their own media.”

I’m not going to dissect this finding, but I think it does underline how the world is changing quite substantially and this generation has a fundamentally different world view from their predecessors (baby boomers, generation x and y.)

Businesses of the future will have to adapt. Yes even financial services.

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