TIME: Almanac 1995

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<text id=92TT2167> <title> Oct. 05, 1992: Street Fighter </title> <history> TIME--The Weekly Newsmagazine--1992 Oct. 05, 1992 LYING:Everybody's Doin' It (Honest) </history> <article> <source>Time Magazine</source> <hdr> BUSINESS, Page 73 Street Fighter </hdr><body> Michael Bloomberg pushed his way into financial communications. Now the big boys are striking back. By THOMAS MCCARROLL Michael Bloomberg is a marked man. Dow Jones, the 110-year-old publisher of business news, has threatened to "get" him. British media conglomerate Reuters recently launched a new product it informally dubbed the "Bloomberg Killer." Bloomberg also ranks No. 1 on the hit list of a powerful new joint venture formed by Salomon Brothers, Morgan Stanley, First Boston, Citibank, Lehman Brothers and Goldman Sachs. At 5 ft. 10 in., balding and a little paunchy, Bloomberg, 50, is no Arnold Schwarzenegger. But to his competitors, he has seemed like the Wall Street version of the Terminator. With fewer resources and less experience than its bigger rivals, his upstart firm, Bloomberg Financial Markets, has managed to overpower the competition in one market after another. Relying on in-house technology and a shrewd low-cost pricing strategy, Bloomberg broke industry leader Telerate's monopoly on the market to supply prices of government bonds. He stunned global giant Reuters in its own backyard by stealing the Bank of England as a customer. His stock-quote service is beating the pants off Quotron, whose name had been virtually synonymous with electronic stock-price quotations. And though they are outnumbered 7 to 1, his business news-wire reporters are giving Dow Jones a run for its money. "Do we take Bloomberg seriously?" asks Carl Valenti, president and publisher of Dow Jones Information Services. "You're darn right!" Bloomberg may be the new kid on the block, but he is the fastest-growing vendor in the $4 billion market for electronic financial information. His firm distributes quotes on stocks, bonds, currencies and other securities, plus up-to-the-minute business news, to 20,000 desktop terminals worldwide. Although his service ranks sixth in customers -- behind Reuters, Dow Jones (including its Telerate division), Automatic Data Processing, Quotron and Knight-Ridder -- Bloomberg is adding 625 new terminals each month. The firm is launching assaults on other markets as well. In July it started a monthly financial magazine, appropriately called Bloomberg. And last month it paid $14 million for New York City radio station WNEW-AM, which it plans to convert to an all-business news format. "The future belongs to multimedia, not one-product companies," says Bloomberg. "I'm going to make sure that we're one of those New Age companies." Though it is 10 years old, Bloomberg Financial Markets still operates on a no-frills basis out of its Manhattan headquarters -- no secretaries, no job titles and no private offices. Bloomberg, a hands-on manager who insists on signing every invoice and nonpayroll check, relies heavily on hungry college recruits to staff his 850-person firm. He pays straight salary, no sales commission. But his real strength has been the Bloomberg, his own terminal-and-software system that looks more like a Nintendo game than a serious number cruncher. Unlike most computer systems, which largely supply users with rigid rows of numbers, the Bloomberg lets traders sort and manipulate incoming data. It calculates the future value of bonds, for instance, displays the price history of stocks, evaluates portfolios under various interest rates, and more. Whereas competitors generally charge $2,000 to $4,000 a month, Bloomberg sells his service for $995 a month. While he has so far seemed unstoppable, Bloomberg may be coming into a vulnerable period. The financial-data industry, which grew at the breathtaking rate of 20% a year during the bullish 1980s, has slowed down. Since the stock-market minicrash in October 1989, demand for computerized business data has grown a tame 5%. A subsequent shakeout has already claimed some weaker firms, such as Bunker Ramo, GTE Financial and Pont Systems, through mergers and failures. To remain viable, survivors must invest heavily in the next generation of information technology. That could spell trouble for small outfits like Bloomberg, says Margaret Fischer, head of electronic-information practices at the market-research firm Link Resources. "The survivors will be those with deep pockets, critical mass and strong stomachs." Bloomberg may need all three to prevail. Customers are starting to move away from specialized terminals, like the Bloomberg, that cannot be linked to standard PCs or run off-the-shelf software. Some large vendors have already made the investment to switch to "open" systems. Knight-Ridder has developed a PC-based service using Microsoft's popular Windows program. Reuters is teaming up with PC-maker Intel. And EJV Partners, the joint venture of six Wall Street firms, is building a system designed to run on personal computers. But Bloomberg stubbornly rejects this approach. He fears that he would lose his unique edge if he abandoned the Bloomberg. However, says Robert Russel, senior vice president of marketing at Reuters, "unless Bloomberg opens up, he'll be an island alone against the rest of the industry." Still, the man for whom the machine is named isn't worried about EJV, Dow Jones or Reuters. They can be outfoxed, he insists. While they are spending heavily to develop futuristic products that incorporate audio with full-motion video, for instance, he plans to introduce this year a lower-cost system using sound and still images. "What frightens me," he says, "is the little guy in the garage I don't even know about right now." In other words, the only thing that scares Bloomberg is the next Michael Bloomberg. </body></article> </text>