Why Merrill Lynch should keep its stake in Bloomberg

David Callaway, the editor in chief of Marketwatch, writes that Merrill Lynch should keep its 20 percent stake in Bloomberg L.P. , the parent of Bloomberg News, and sell another asset such as its stake in money manager BlackRock Inc. if it needs to raise money.

Callaway writes, “A buyer of the Bloomberg stake would likely need some sort of approval from Bloomberg himself, and would need to come with a major strategic value to add.

“But keeping the Bloomberg stake makes more sense for Thain, at least for now. Despite the panic around financial services these days, the growth of the world’s securities, banking and asset trading industries is set to boom over the next few decades as China, India and many other markets evolve, just as it has boomed in the past 20 years in the U.S. and Western Europe. Bloomberg will continue to ride that wave.

“Competitor Thomson Reuters Corp., fresh from its merger of Thomson Financial and Reuters Plc, has at least three years of painful transition ahead of it — years that Bloomberg will use to pad its lead in many markets.

“Also, anyone speculating that Pearlstine was brought in to gussy up Bloomberg’s news department for a possible sale of the company — or just fix the news side in general — clearly doesn’t understand the scope of what Bloomberg and many of my former colleagues have accomplished in building that coverage. Despite its reputation — deserved — for hostile management and off-the-wall antics, there is no more complete and coordinated global news group at the moment, no matter what some New York-focused media pundits might say.”

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