From: Adam Rifkin (Adam@KnowNow.Com)
Date: Tue Oct 24 2000 - 14:40:05 PDT
It's down to Bloomberg vs Reuters for control of the flow of financial data.
(Dow Jones? Who's that?)
And what's with Tibco pushing b2e? Can I buy a vowel, please?
Reuters getting the Job done
CEO calls the shots on media company's future
By Thom Calandra, FT MarketWatch.com
Last Update: 9:44 AM ET Oct 20, 2000
LONDON (FTMW) -- Give the guy a cigar.
Reuters chief executive Peter Job in an open call Friday to investors
confronted issues of competition among financial services providers and
rocky stock market activity. His comments have global significance.
To be sure, nervous Job and his fellow London media executives did not
permit questions from mere journalists, only fat-cat bankers and analysts.
But that's a quibble.
Reuters (RTRSY: news, msgs) is rapidly moving its financial information
businesses onto the Internet in a bid to reach as many as 65 million
individuals. Reuters Group also is poised to take a piece of its Instinet
electronic broker unit public.
Of most interest to those who follow the global flow of financial data and
news are Job's comments about competitors. Essentially, it is a two-horse
race. "The number of players on the global scale in the (financial)
information business are dwindling," said Job, after unveiling quarterly
sales growth that exceeded even the most bullish Wall Street and
Square-Mile forecasts. "Bloomberg is a strong competitor." Alas, Job did
not even mention Dow Jones (DJ: news, msgs), owner of The Wall Street
Journal and Dow Jones News Service.
Job says the tech tumble in stock markets this year is benefiting Reuters'
Greenhouse Fund, a collection of 73 investments whose businesses, such as
privately held Entition and publicly held Tibco Software (TIBX: news,
msgs), fit into a corporate strategy of blanketing the world with Reuters
words, pictures, data and trading solutions. His team of venture
capitalists in London, Paris and San Francisco will more easily find
technology gems at bargain valuations, he said.
These are very decent times for one of the most watched CEOs in the world.
Reuters' just-released quarterly revenue growth of 16 percent was so good,
most of the bankers and analysts who listened to Job on Friday are likely
to raise their profit and sales estimates for next year.
The spectacled CEO said volatile currency markets just might help part of
the company's trading business, "what with the euro." The collapse of the
euro has been a field day for currency traders who use Reuters platforms to
buy and sell in a market estimated at $1 trillion a day and more.
No Job is an island
As for the volatile Nasdaq Stock Market, on which Reuters depends for much
of the business its trading and Instinet businesses receive, Job was
pragmatic. Trading volumes surged in this year's first quarter, then
dwindled as technology stocks wasted away. Job estimated trading activity
on Nasdaq had declined about 12 percent from the first quarter.
Only recently have the number of Nasdaq shares changing hands risen again
to heady levels. He acknowledged that first-quarter comparisons next year
might be a hurdle. "Who knows where volumes will be in the first quarter of
next year?" he said.
Job, who garbles his words in a kind of Fleet Street slur, is criticized
for promising much and delivering little. Yet clearly, Job is nearing the
top of his game. If Reuters successfully floats Instinet next year, the CEO
will have the cash he needs to fend off electronic rivals such as Island.
"A quotation for Instinet would make (Instinet's value) more transparent to
our investors," Job said in a cheerful snort. "They'll be free to acquire
with their own currency." Employees "will want to make that ship go faster."
No date, folks
Job, in his conference call, said he would not set a date for an Instinet
IPO. Job has unfairly been barbecued for forecasting a flotation of the
company's Greenhouse Fund, which now will seek private equity to build its
portfolio of investments. "We never gave a time (for Greenhouse)," he said.
"I don't want to be a hostage to fortune by giving a time for this one.
Markets conditions can literally be anything when you reach the end of the
Job pointed to the company's Internet ventures, including one with investor
portal Multex.com (MLTX: news, msgs), a Manhattan company that this week
reported a profit for the first time. Multex Europe has about 10,000
members and growing, Job said. "We would like to deepen and expand it."
Tibco, a Silicon Valley, Calif., developer of data solutions, will help
Reuters coin what Job said is a new Internet mantra: business-to-employee.
The B-2-E model delivers company information to workers via mobile devices.
"We are backing these ventures heavily," he said.
As for the much-ballyhooed Reuters.com portal for individuals, Job
acknowledged, "It's a great departure for us. It contains an awful lot of
information. The audience is growing. This is a case where... as in the
case of Yahoo...you can make changes quite easily."
Job said Reuters is pulling out all the stops in a race to enter the German
market with Internet-ready financial news and information. "We look at
countries like Germany and realize we need local content," he said. A
venture Reuters has with German publisher Handelsblatt Group "should
produce useful revenue," he said.
Bottom of the barrel
Job said Reuters' decision to create low-priced information feeds, in a
radical departure to what Bloomberg is doing with its proprietary databases
and trading systems, has created "a favorable wind blowing here."
Such Internet-driven news and data feeds for individuals and small
businesses allow Reuters' customers in turn to pass the booty onto their
Across Europe, companies are moving quickly to an American model of 401(k)
retirement plans and other employee-directed set-ups that replace
traditional pensions. This will boost individuals' desire for Reuters'
financial news, he predicted.
If Job is to go down in the Fleet Street history of his company as an
Internet pioneer, such a shift will have to happen -- in Europe and around
the world. The white-collared CEO easily could blow more than just wind
down the world's growing Internet pipelines.
Tank: So what do you need? Besides a miracle. Neo: Guns. Lots of guns. -- The Matrix
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