Oil traders who do Ya­hoo! fret over its fu­ture

Many rely on the Mes­sen­ger ser­vice to stay in touch “Ev­ery­body uses it, and you keep your Ya­hoo wher­ever you go”

Bloomberg Businessweek (Europe) - - CONTENTS - The bot­tom line Oil traders adopted Ya­hoo’s free chat ser­vice back in the 2000s. They may not be able to keep it for much longer.

Oil traders take price slumps, sanc­tions, and nat­u­ral dis­as­ters in stride. The de­cline of a vin­tage in­ter­net com­pany has them scram­bling.

Ya­hoo!’s chat ser­vice, Mes­sen­ger, has for al­most 18 years been the de­fault com­mu­ni­ca­tion tool for the men and women who each day trade bil­lions of dol­lars’ worth of crude and petroleum prod­ucts around the planet. From Sin­ga­pore to Rot­ter­dam, deals are pitched, con­tracts are ne­go­ti­ated, and lunch dates are made on Mes­sen­ger.

Now the com­pany’s in­ter­net as­sets, in­clud­ing its chat ser­vice, are up for sale, and the fu­ture of Mes­sen­ger is un­cer­tain. Ya­hoo, mean­while, is forc­ing new users to con­nect via an up­dated ver­sion that com­pli­ance of­fi­cers at some trad­ing houses have de­clared of­flim­its be­cause chats can’t be recorded and logged in­ter­nally—some­thing the old ver­sion al­lows.

So­car Trad­ing, a Geneva-based arm of Azer­bai­jan’s na­tional oil com­pany, has al­ready set up a work­ing group to find a so­lu­tion for its em­ploy­ees. While it’s iden­ti­fied po­ten­tial al­ter­na­tives, the main is­sue is whether the peo­ple they want to talk to will join in. “There is not much sense in pro­vid­ing a prod­uct with great com­pli­ance func­tion­al­ity if none of the in­dus­try are us­ing it,” says Azru Az­i­mov, the trad­ing group’s chief ex­ec­u­tive of­fi­cer.

Other com­pa­nies look­ing for al­ter­na­tives in­clude Trafigura and Mer­cu­ria En­ergy, ac­cord­ing to ex­ec­u­tives who asked not to be iden­ti­fied be­cause they aren’t per­mit­ted to speak pub­licly on com­pli­ance is­sues.

It’s a tall order. Ya­hoo Mes­sen­ger is free and con­nects a huge user base within the oil world—from traders to re­fin­ery man­agers, pipe­line op­er­a­tors to har­bor masters. Many in the in­dus­try even have their Ya­hoo IDs printed on their busi­ness cards.

“Ev­ery­body uses it, and you keep your Ya­hoo wher­ever you go,” says Olivier Jakob, man­ag­ing di­rec­tor at con­sul­tant PetroMa­trix in Zug, Switzer­land. A for­mer oil prod­ucts trader at Cargill, he says he’s had his Ya­hoo ID for “many, many years.”

While there are no of­fi­cial mar­ket share fig­ures, oil traders say Mes­sen­ger is by far the dom­i­nant plat­form and has been since the 2000s, be­fore tools such as Snapchat and What­sApp had taken off. Bloomberg LP, which owns Bloomberg Busi­ness­week, in­cludes an in­stantmes­sag­ing func­tion as part of its paid Bloomberg Pro­fes­sional Ser­vice.

Ya­hoo is mak­ing clear that it wants ev­ery­one to move to the newer ver­sion, which was in­tro­duced in De­cem­ber. “We en­cour­age all of our users to com­plete their tran­si­tion to the new Ya­hoo Mes­sen­ger as soon as pos­si­ble,” says Ana Braskamp, a spokes­woman. She also says, “It’s great to hear pos­i­tive feed­back around Ya­hoo’s legacy mes­sen­ger prod­uct.”

The situation could cre­ate op­por­tu­ni­ties for ri­val ser­vices or for some­one to cre­ate a plat­form spe­cific to the oil-trad­ing sec­tor. “The things that Ya­hoo chat of­fers are so im­por­tant to traders,” says Craig Pir­rong, a fi­nance pro­fes­sor at the Uni­ver­sity of Hous­ton. “The tech­nol­ogy is not that dif­fi­cult to deal with; it is just a mat­ter of co­or­di­nat­ing the tran­si­tion.” One se­nior ex­ec­u­tive at Gun­vor Group says he’s con­fi­dent a so­lu­tion will emerge. If not, he adds, traders will just have to pick up the tele­phone.

Andy Hoffman

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