Bloomberg facing new competitors

Nathaniel Popper of The New York Times writes about new competitors facing Bloomberg and its terminal business.

Popper writes, “Bloomberg’s news offerings — including BusinessWeek and the company’s website — generate less than 4 percent of the company’s revenue and cost more than they earn, according to Burton-Taylor Consulting. The terminals generate 75 percent of Bloomberg’s revenue.

“All service providers for Wall Street, not just Bloomberg, are unusually vulnerable at the moment. The financial industry is in the middle of an aggressive run of cost-cutting as it grapples with new regulations and changes in the markets. A Bloomberg contract, which can be upward of $100 million at larger institutions, is a tempting target to whittle down.

“he number of Bloomberg terminals grew only 1.9 percent, to 325,000, last year. In the 10 years before the financial crisis, the number of terminals grew at an average rate of 12 percent each year, with most companies signing on for multiyear contracts.

“Bloomberg has sustained several challenges to its dominant market position, fending off smaller competitors hoping to bite off a corner of its business. And it has the cash reservoirs to wage a vigorous defense this time around.”

Read more here.