Michael Bloomberg, the billionaire former mayor of New York, is spending millions of dollars to campaign for the presidency of the United States. The pitch helps to illuminate one of the world’s most successful media companies over the last 35 years.
Bloomberg launched his eponymous financial data and media company in 1981 with a $10m payoff from Salomon Brothers, the company he had joined 15 years earlier straight from university with an electrical engineering degree and a Harvard MBA.
His first task at Salomon had been to organise the millions of stocks and bonds in the bank’s vault, but he quickly rose through the ranks to become a general partner aged 30. Six years later, in 1972, he was effectively demoted to take charge of the company’s IT, “far removed” as his biographer noted “from the glory of the trades and the deals that made the firm money.”
When Salomon merged with commodities trading firm Phibro Corp, Bloomberg took his severance cash and launched Innovative Market Solutions. He got to work creating the Bloomberg Terminal, a software system to enable financial professionals to trade stocks electronically with real-time market data. That was almost a decade before the ubiquitous desktop computer and the internet.
Fast, reliable data
Bloomberg knew that reliable data was the lifeblood of traders everywhere and set out to give brokers better information at lightning speed. He realised they would pay for the service. His computer soon changed the way financial data was stored and used, and introduced a game-changing messaging system – years before email.
His first customer was Merrill Lynch which had invested $30m to help finance the development of The Terminal and, by 1984, was selling the machines to its clients. That was after a lot of hustling and some faked demonstrations by Michael Bloomberg who used every trick to persuade Merrill Lynch to back a system when it existed only in his head.
The Bloomberg Terminal (once a heavy piece of hardware, now an all-you-can-eat $24,000 subscription system) defied the critics and the longterm market leader Reuters to become the service that financial services professionals simply could not do without.
Becoming a news provider
Its secret sauce was the analytics, but the terminal needed a constant feed of world news to captivate users. After years of being forced to pay his rivals Dow Jones and Reuters, he launched Bloomberg News.
The company is now as much in the news business as in financial services. It employs more than 2,700 journalists worldwide under the management of John Micklethwait, the former editor-in-chief of The Economist.
Its 4m stories annually are fed directly to Bloomberg Terminal users as part of its subscription package of data and proprietary analytics. Bloomberg also sells its news feed to newspapers across the world. In addition to the venerable Terminal, Bloomberg has ‘channels’ everywhere: TV, radio, online and even in print (Bloomberg Business Week).
The success has prompted its development of increasingly powerful “vertical” information services on tax, law, healthcare, retail, transport and energy, in addition to substantial government and legislative operations. This week, Bloomberg has bought the eight-year-old CityLab from The Atlantic. It’s a news site and events covering urban technology and is the company’s first editorial acquisition for over 10 years. Insiders expect a steady stream of future deals to accelerate the diversification from financial services.
Bloomberg, which employs some 20,000 people, last year generated an estimated $10bn revenue. A rising 23% came from non-Terminal sales. By some measures, this is the world’s most versatile news and information company.
For decades, Bloomberg has been almost untouchable in finance, and the rapid expansion of its global news and high-value B2B verticals shows there is plenty of growth still to come, even as it seeks to colonise financial services in the increasingly important developing economies.
The company is as driven as its founder and both have admirers and haters. For every aggrieved ex-employee complaining about high-pressure working conditions, there are hundreds who love the company’s low bureaucracy and lack of hierarchy. Many of those at the stunning new London office building know the founder and believe he knows them. He quickly gets into the detail of their job challenges when he brushes past their desks. Investment decisions are made fast, and in the open: there are few conference rooms and no private offices (even for the founder). Bloomberg exudes competitiveness and can-do.
Michael Bloomberg still owns 88% of the business. He is a prolific and thoughtful philanthropist but nobody has ever accused him of modesty. He is, though, cool about how and why his company made it: “I think what happened with our luck is we did something that nobody else did; so the competition in the beginning wasn’t there…We had first-mover advantage…By the time they realised ‘Oh, what Bloomberg is doing is valuable and people will take the data from him’…it was late for them to catch up.”
The common link between his 12-year success as Mayor of New York and his three decades as a global entrepreneur is his appetite for innovative problem solving – and a drive to get things done. Voters, staff, and customers always like that. That forgives Bloomberg’s famous bursts of temper and impatience.
Vanity Fair has described Michael Bloomberg as “a multi-disciplinary juggernaut, and perhaps the Rockefeller or Carnegie of the 21st century: a titan of finance, a media mogul, and the man who transformed the Big Apple during his unprecedented three terms as Mayor.” Rupert Murdoch described him as “the most creative media entrepreneur of our time”.
For all the emerging competition, not least from the revived Thomson Reuters financial and risk division (now 55% owned by Blackstone private equity), the Bloomberg story has lots of lessons for media everywhere. Its role as a tech disruptor and comprehensive provider, years before the internet and Silicon Valley sprang into life, should prompt traditional news and information companies to consider the opportunities to reclaim the ‘media monogamy’ they once enjoyed
Lessons for media companies
In an era when digital consumers have been dazzled away from the very small number of news sources on which they were once happy to depend, some transformed media really could reclaim their market. It used to be so much simpler.
In the 21st century, a return to pre-internet ‘media monogamy’ could be achieved with an “everything-you-need-to-know” combination of exclusive and non-exclusive news, data, and transactional information. That’s the approach that has made Bloomberg formidable in financial services.
Readers and users increasingly want trusted, expert sources they can depend on for completeness, accuracy and safety. In its earliest days, the internet once spawned “no need to go anywhere else” ‘portals’ – which is actually what Bloomberg had launched a decade before. So, where are those portals now?
Audiences, which once had their news aggregated, filtered and verified by their single favourite daily newspaper, news magazine or TV channel are left to curate for themselves.
In an era of unverified sources, fragmented media, and digital danger, the next fortunes may be made by comprehensive services from partnerships of legacy companies more used to competing than collaborating. Safe, closed systems (like the Bloomberg Terminal) may easily become more attractive to users everywhere – and not just to high-priced publishers.
While Michael Bloomberg is pumping millions of dollars into his US presidential campaign, media owners everywhere might just reflect on the captivating strategies that gave him a $59bn fortune. Just think.
