Reuters Grows Up, Again

Reuters appears to be on the verge of merging with Thomson, a deal that would create a financial news and information powerhouse to rival Bloomberg by reducing the field to two major players. It should also enhance the profile of Reuters editorial, which for all the time I was part of it looked over its shoulder to protect itself not so much from external threats but powerful insiders who questioned its relevance far too often for comfort.

The proposed deal as outlined by Reuters CEO Tom Glocer would be a bit complicated; the companies would tie up as a "Dual Listed Company" with two identical boards, and each would remain separately listed on exchanges. The company would be called "Thomson-Reuters" but the combined news gathering and publication divisions would be called "Reuters." The Trust Principles and the Reuters Founders Share Company, which aim to ensure editorial independence, would be retained.

Glocer said he would become the CEO of the merged companies and David Schlesinger would continue to be global Editor in Chief. Nobody else gets an early vote of confidence: "... other Reuters senior management will have prominent positions

One boldface Reuters name in the mid-90s, answering the persistent "What about Bloomberg?" question during one of those rare meetings with journalists, answered: "Oh, he's just a meglomanic." As if that is a bad thing.

alongside their new colleagues from Thomson," Glocer says.

News Gets The Nod

What's the signal in singling out Schlesinger for life in the hereafter? It can only be that while perhaps not driving the deal Reuters Editorial is an important part of the deal. It is great to learn that Reuters Media will not be spun off, as was often rumored (though who knows how seriously) during the dot com heyday.

Reuters has had a remarkable trajectory. A 156-year-old company that went public only 23 years ago, its full appreciation of the promise of the Internet did not occur overnight. Now above $70, a few short years ago its NASDAQ ADRs were trading for under $10 -- delisting territory -- raising fears (or hopes, as the case might have been) that it could be a takeover target. In those dark days any deal would have almost certainly been done on someone else's terms, perhaps even by a paper-rich new media newcomer eager to buy credibility. The directors of Reuters Founders Share Company were not necessarily averse to selling, though one said at a small lunch I attended in that era that someone like Rupert Murdoch would likely have been rebuffed.

It is more than a little amusing now to recall the smug dismissal of Bloomberg by senior management before Glocer's tenure. One boldface name in the mid-90s, answering the persistent "What about Bloomberg?" question during one of those rare meetings with journalists, answered: "Oh, he's just a meglomanic." As if that is a bad thing, I thought.

Bloomberg? What -- Me Worry?

So through the 90s upstart Bloomberg (formed two years after I joined Reuters) increasingly ate Reuters' lunch in the marketplace while my old company played sleeping giant and pretended to be things it wasn't and couldn't be. And now, only through combining with the only other major player in the field, can it hope to eclipse Bloomberg -- and barely at that. According to Bloomberg:

Reuters would lift Thomson's share of the financial data market to 34 percent from 11 percent, compared with Bloomberg's 33 percent, based on 2006 figures compiled by Inside Market Data.

While this deal is primarily about market share it also says a lot about content being king. On the same day the Thomson-Reuters news broke it was reported that Rupert Murdoch was trying to acquire Dow Jones. We see billionaires fighting over the Los Angeles Times. Fox has already bought MySpace and is now after PhotoBucket. And who can forget the $1.6 billion Google recently paid for YouTube?

Whether old or new media, there is a scramble on to own the content stream. This is a good thing. As I see it a buyers' market will help one of the greatest news-gathering operations in the world breathe a little easier.