Name: Thomson Reuters
Has proved very willing to experiment with new technologies that will allow it to syndicate its news content online. Its financial-analytics services are facing new competition from Google and Yahoo, which are offering similar services at low or no cost.
Stock Symbol: TRI
Location: New York City
Telephone: (646) 223 4000
Year Founded: Antecedents date back to 1851
Number of Employees: 53,700 (as of Dec. 31, 2008)
CEO: Thomas H. Glocer
Bio: Bachelors in political science from Columbia University and a J.D. from Yale Law School. Glocer joined Reuters Group as vice president and deputy counsel, Reuters America. He is also a director of Merck &Co., Inc.
CTO: James Powell
Bio: Bachelors in mathematics and a Masters in Industrial Robotics from Imperial College London. A 14-year veteran of Reuters, Powell has also been an executive at Solace Systems, Citadel Investment Group and TIBCO Finance Company.
Board Members and Advisors:
W. Geoffrey Beattie, Deputy Chairman
Steven A. Denning
John A. Tory
Sir Deryck Maugha
Niall FitzGerald, Deputy Chairman
Thomas H. Glocer
Peter J. Thomson
Vance K. Opperman
Roger L. Martin
John M. Thompson
David Thomson, Chairman
Total R&D Spending: Not available
R&D as a percentage of revenue: Not available
Ratio of employees engaged in R&D: Not available
In addition to a news gathering and distribution agency, Thomson Reuters operates a financial analytics service. Thomson is using automated machine learning techniques to develop its service in the hopes of providing robust solutions to their customers, in a quicker and more efficient way. For instance, instead of having to release new versions of the same software suite again and again based on feedback from users, Thomson Reuters software should be able to correct and update automatically and in real-time.
Thomson Reuters competes in four main markets within the analytics and information-based technology product and service space: sales and trading, investment advisory, enterprise, and media. Thomson’s main competitor in the financial market is Bloomberg LP, followed by Dow Jones and Pearson (who owns Financial Times.) Thomson’s WestLaw and FindLaw products compete directly with Lexis Nexis’s QuickLaw products.
These players have all been around for quite a while now. More interesting, however, is the recent emergence of Google and Yahoo within the financial analytics space. When the initial merger between Thomson and Reuters happened in 2005, there were concerns that Bloomberg and Thomson Reuters would form an anticompetitive duopoly. Regulators were worried about price fixing and other economic consequences of having a large market with minimal players; ultimately, however the investigations were quietly closed. Why? One of the main reasons was because of newcomers like Google and Yahoo, who are starting to provide many of the same financial analytics services (albeit lightweight versions) for free or at a very low cost in comparison. The entrance of these newcomers put an end to Thomson Reuters regulatory headaches, but has brought about a new set of challenges. Should Thomson Reuters compete against free versions of the analytics product? And if so, how? Luckily for Thomson Reuters, there is still a major market for premium corporate information and service-based information and analysis. Google and Yahoo have stayed out of this market for now.
Thomson Reuters has spent the past few years dealing with the strategic, financial, and cultural challenges of merging two giant corporations. They have therefore had limited time and resources devoted to growing the actual business. With much of the transitional phase behind them, Thomson Reuters is now focused on growing into new markets, particularly developing international markets. According to their year-end report, growing a global brand to drive international growth is one of their top 3 priorities. Areas they are targeting include China and Japan, where they recently launched WestLaw, and the Middle East for financial analytics.
The company’s second major initiative throughout the next eighteen months is to continue with an aggressive acquisition strategy, both to enter new regional markets but also new industry markets. For instance, a few months ago they acquired Abacus Software, a tax planning and analysis software suite, in an attempt to grow their audit and tax business. They also have been making moves in healthcare; two of their products, MercuryMD and Clinical XPert Navigator were ranked best in KLAS in 2007 and 2008. It is obvious that Thomson Reuters realizes the need to expand their core competencies out of the financial markets if they are going to have any chance of sustainable long-term growth.
Challenges and Next Steps:
Thomson Reuters still faces dilemmas stemming from the merger which created it. The company faces a variety of technological challenges including integrating all divisions on the same common platform. Yet, at the same time, Thomson Reuters has an aggressive plan to acquire other new businesses throughout 2010. Each of these new businesses will bring their own integration challenges as well. The question is whether Thomson Reuters is taking on more than they can handle at once.
Compiled by Jen Novak