Bloomberg, which just plopped down $5 million in cash for BusinessWeek wants to be the world’s most influential news organization, according to The New York Times.
It might seem like an odd ambition for a media company that has little exposure outside the financial services industry, but I’m not one to frown on someone’s dreams, or plans, as the case may be.
Although Bloomberg, which is privately held, draws attention for its media ambitions, a vast majority of the company’s projected $6.3 billion in revenue — and nearly all of its profit — derives from financial information systems. These software packages, still known as “terminals” from when Bloomberg made the hardware, can be found on virtually all Wall Street trading desks, housing huge amounts of data and analytics, from price quotations for fixed-income and derivative products to complex risk analysis — making Bloomberg a live-on-Wall-Street, die-on-Wall-Street enterprise.
This operation accounts for 85 percent of Bloomberg’s revenue, and the focus is helping roughly 280,000 customers who each pay about $20,000 annually to get millisecond head starts on pricing or market-moving headlines, as well as in-depth financial analysis.
BusinessWeek, with a circulation of more than 900,000, and about 11 million Web site visitors a month, could help expand Bloomberg’s readership well beyond its trading-floor customers. But time will tell if Bloomberg’s management model will work in the open information market. Their reporting is formulaic and they don’t make stars of their writers, a practice traditional print pubs consider important, if not sacred.