Attempts to breathe life into the sagging market data company leave many skeptical of its future
When Dow Jones & Company announced a $650 million, three- to four- year program intended to expand and revitalize Dow Jones Markets, its financial information services unit formerly called Dow Jones Telerate, and hopefully recapture market share lost to arch-competitor Bloomberg News, you could almost hear groans on Wall Street.
Bloomberg has been raking in market share at a prodigious rate-some 73,000 systems were reportedly installed in 1996, a 35 percent increase over 1995-arguably becoming the leading source of information on the world's trading desks, leaving competitors like Dow Jones Markets in the dust.
Recently, members of the Bancroft family, which have a substantial interest in Dow Jones, have been pressing to cut their losses in the unit. "They can't catch up with Bloomberg I'm impressed with what he's done. He's got them running," says Standard & Poor's media analyst William Donald.
The latest attempt to resuscitate Dow Jones Markets is what Donald calls a "huge" undertaking. "In my opinion, (Dow Jones) is already behind the competition, and it's going to take them a few years to get up to speed." He says that if the revitalization goes as planned, Dow Jones Markets will likely be a smaller and tighter operation. "But they're already so far behind that I just doubt it's going to work, and I'm in agreement with some of their major shareholders that they should just sell it or get rid of it."
A spokesman for Dow Jones doesn't share Donald's opinion. "Two younger members of the Bancroft family have expressed some dissatisfaction with (Dow Jones Markets), and have suggested we sell off the Markets part of the company, but these people control less than one percent of the company stock, and it's a minor thing," he says. "We've said Telerate has probably lost a couple of points in market share (to Bloomberg) in the past year or so, (but so has everyone). We've had our problems, but we're actively addressing them." FB