Paul Farrelly
It is not every day that Reuters is accused of being nimble. Indeed, to many of the more enterprising folk working there, the firm still resembles the civil service for sheer pen-pushing, buck-passing ability.
How do you make a Reuters manager jump, the old joke goes. Creep up behind him and whisper “Bloomberg”, the fast-growing, fast- talking United States online information rival that appeared from nowhere to threaten Reuters’s dominance of real-time financial news.
But Reuters has been doing some interesting things of late. Earlier this year, it took another step towards creeping control of Dow Jones, historically its biggest rival, by creating joint newswire and database services.
In May, it snapped up Tradepoint, the electronic stock exchange, and a stake in WR Hambrecht, a US investment bank which has pioneered an auction-based system for floating companies on the Internet. Farsightedly, it is also floating off Tibco, its software subsidiary, to allow the firm to exploit its technology outside of the financial sector. Tibco’s products allow computers to communicate efficiently across the Internet and only last week two leading US names, Yahoo! and Sun Microsystems, announced they would take a stake.
Crack open either of these initiatives and you find that ubiquitous word – the Internet – running through the middle. As early as 1996, Reuters went one step further: it set up a “greenhouse fund” to invest in start-up Internet businesses. It was – and not many people know this – a founder shareholder of both Yahoo! and Infoseek, the popular Net search engines.
Last week, the group’s four-year waltz with the Web culminated in the formation of Reuter Ventures, a new division focused on the Internet. With David Ure it becomes one of the first major companies to have a main board director responsible for Web strategy. It is not just the greenhouse fund and fresh ventures that go into the division, but all of Reuters traditional news and TV businesses, too.
The strategy has already started to pay off. The Internet has enhanced Reuters’s products and delivery and cut the investment needed in technology.
The Net has also allowed the launch of cheaper news products outside the financial markets. It is already the largest supplier of content and data to more than 200 Internet service providers. The next steps will be in “e-commerce”, where it already has Internet dealing services through Tibco in the US and now Tradepoint in the United Kingdom.
Will it be successful? Well, Reuters makes most of its money already from dealing systems for the money and equities markets and has been good at protecting and expanding its niche. So the firm seems a far safer wager than some of the wilder Internet bets out there.