annals of communications
The New Yorker - March 10, 1997

the bloomberg threat

Why does America’s newest media mogul
scare Dow Jones?

by ken auletta

I t’s fabulous being Michael Bloomberg, as he is quick to tell you. His name is stamped on seventy-three thousand computer terminals that companies lease to receive the Bloomberg a treasure of up-to-the-minute and historical financial data. His seventy news bureaus produce Bloomberg News, which is carried by more than eight hundred newspapers around the world. His name is featured on television (Bloomberg Business News), on radio (Bloomberg News Radio), in magazines (Bloomberg Magazine and Bloomberg Personal), on the Internet (the Bloomberg Personal Website), and on books (the Bloomberg Press). His company, started fifteen years ago, earned two hundred million dollars last year, Bloomberg says, and according to friends has brought his net worth to about two billion dollars. Without attracting much public notice, Bloomberg not only has snatched away business customers from Dow Jones and threatened the future of Dow Jones’s Telerate unit but has stealthily attacked the far larger consumer market of news. Bloomberg was the keynote speaker this past January at the thirtieth annual Consumer Electronics Show, in Las Vegas, where Gary Shapiro, the president of the sponsoring organization, introduced him as “the William Randolph Hearst of the nineteen-nineties, except for the fact that he is somewhat more ethical perhaps, and kinder and gentler.” And, Shapiro added, to laughter from the audience, “Mr. Bloomberg is not only brilliant but, with the recent marriages of John Kennedy and Bill Gates, Mr. Bloomberg is, indisputably, America’s most eligible bachelor!” What Shapiro did not say was that Bloomberg, a bachelor by divorce, also fancies himself a bon vivant, who flies his own plane, dives out of helicopters to ski, and according to Bloomberg is pursued by gorgeous women. Bloomberg would not be cast as a leading man: he has pouches under his eyes, is slightly bucktoothed, and has the pleasant but unremarkable demeanor of a five-foot-nine-inch, fifty-five-year-old former Wall Street trader who hurriedly dresses in solemn gray or blue suits. His speech in Las Vegas, which was unscripted, revealed much about the way he thinks, and that in turn reveals reasons for his success. Bloomberg is a former engineer, but he cautioned his audience not to become infatuated by technology. He had just returned from skiing in Vail, where the hot product was not a consumer gadget not a new laptop, a new personal digital assistant, a new mouse, all featured at the show but bottled water. The point: specialized skills will matter less and less, and a liberal-arts education more and more. “We are making a terrible mistake in our school systems in trying to teach kids technology at the expense of reading and writing and getting along with each other,” he told a ballroom full of exhibitors. Context, that is to say, matters more than expertise. Listen to the customer, Bloomberg advised the exhibitors. As a trading-floor partner who designed and ran Salomon Brothers’ computer and informationretrieval system, Bloomberg said that his first mission was to understand the customer. He wondered whether this mission was too often neglected. His evidence: “All of you people keep producing devices where the letters and numbers are much too small for me to read, and the buttons are too small for my big fingers.” The products are designed by engineers who think too much of their own brilliance and too little about what customers need, he said. “If there’s one thing I worry about in my organization, it’s that we’re going to think that we’re smarter than these other people are.” The Bloomberg organization starts with the Bloomberg machine, a dedicated computer and color-coded keyboard, which is leased to companies for eleven hundred and ninety dollars a month. It generates real-time worldwide pricing of bonds, stocks, commodities, currencies, money markets, and mortgages, and it also breaks news and provides data, including filings of the Securities and Exchange Commission, stretching as far back as ten years. It includes “what if” scenarios that allow clients to compute the returns on alternative investments. It takes data and transforms them into a series of charts, which reveal, for example, how a company’s stock has performed versus the market over the past five years, or the pattern of a company’s dividends over, say, the past seven years. If a Wall Street trader or a prospective investor wants information on a company, Bloomberg computer’s data library analyzes sixty-five thousand corporations, using eight hundred separate categories of information. It allows clients to sell or buy stocks and bonds, or to buy airline tickets. There is an audio bank of radio news. In the upper-right-hand corner of each screen, a video report offers either Bloomberg news or access to a video vault ranging from Senate hearings, through press conferences, to interviews by Charlie Rose, whose program is produced at a studio in Bloomberg’s headquarters, on Park Avenue. All this information is punched into the computer system by an army of nine hundred employees in Princeton, New Jersey. Bloomberg “is the fox of the financial-services business,” says NBC’s president, Robert Wright, who is building a worldwide business-news service through CNBC. Wright observes that Bloomberg has a built-in advantage: “He is not a public company, so he doesn’t have to show a profit. He keeps coming and coming . . . and his box is known as the best in the information industry.”