Everyone is out to get Michael Bloomberg. Dow Jones the 110 year old publisher of business news had marked him. Reuters the British based international news service, has released a product. And EJV a consortium of Wall Street’s heaviest hitters has singled him out as their No 1 competitor.
So why is Michael “most wanted” Bloomberg smiling? Perhaps because his company, Bloomberg Limited Partners, parent company to Bloomberg business News (BBN) the fastest growing provider of financial data, analysis and news. The competition focuses on Bloomberg while they focus on our customers.
For Bloomberg drawing attention to himself has become a way of doing business. Fresh out of Harvard Business School he took a modest position with salmon Brothers as clerk processing trades. But he didn’t plan to stay low on the totem pole for long. He used to get in at 7 am he called. He was the only one in the trading room other than Billy salmon, and so we chitchatted. Then he would stay till 7 at night and after 6 the only other person in the room was John Gutfreund and he would give him a ride up town. So the managing partner and the heir apparent became friends when he was just starting as a clerk. Through initiative and what many would call an unhealthy obsession for work, Bloomberg quickly climbed the ranks to the position of head of equity and sales.
But Bloomberg had greater ambition: He wanted to run salmon. He kept telling Gutfreund he could run the goddamn company better, Bloomberg asserted. But such abrasive cockiness eventually led is instead to a demotion. Rather than quitting immediately, though, Bloomberg stuck it out, staying with the company long enough to collect as $10 million consolation prize when salmon went public in a merger with Phibro in 1981. Armed with the idea that investment bankers and traders needed a single terminal loaded with research and up to the minute corporate data, Bloomberg used this money to begin his own company. Out-financed and under experienced, Bloomberg nevertheless took on the giants of the electronic financial information industry.
Relying on a shrewd low pricing strategy, in house technology and persistence, Bloomberg began his battle. In 1982, he approached Merrill Lynch with a pitch for a system for pricing US government bonds. Merrill’s computer specialists told him they would need at least six months to consider the viability of his proposal. Bloomberg pounced. He said he will deliver a finished product in six months. He responded confidently and telling them ‘if you don’t like it you don’t have to pay for it’. And six months later Bloomberg delivered a system, which Merrill purchased that could perform complex calculations on government bonds as well as keep track of Merrill’s inventory.
Bolstered by his initial success with Merrill, Bloomberg set about the task of turning the financial information industry upside down. Bloomberg Financial Markets broke Dow Jones Telerate’s stranglehold on government bond pricing snatched away the prestigious Bank of England as a client from Reuters, and ended Quotron’s monopoly over stock quoting. Very quickly people viewed Bloomberg as a force with which to be reckoned.
Whenever you see a business that is done the same thing for a long time, a new guy can come in and do it better, explained Bloomberg. Bloomberg brought his customers a new level of information services. Bloomberg’s machines, dubbed “Bloombergs,” enable traders to obtain a comprehensive view of a company through a single source, whereas they previously would have had to consult a variety of sources. Nobody comes close to Bloomberg in terms of the breadth of information. TIAA/ CREF which has replaced its old Telerate screens with Bloombergs.
Almost single handedly, Bloomberg led his industry to new heights in technology and service.
As Bloomberg’s much larger competitors fight to catch up in terms of information supply and technology Bloomberg continues to lead the way into the future. Toward this end, Bloomberg’s name has begun appearing in numerous formats. Thank to BBN, the Bloomberg name makes regular appearances in newspaper that use the news service, such as The New York Times.
Bloomberg disagrees with those who perceive diversification as a potential drawback. People said to me, What the hell are you in radio for? But it fits in Bloomberg pointed out. It generates audio for our terminals, enhancing the product that keeps this company successful. Like the news service. It’s all integrated all the parts feed into each other.
In the end, publicity may serve as Bloomberg’s strongest asset. Whereas Dow Jones and Reuters are essentially faceless corporations, Bloomberg is a household name in business circles – all his products bear his name. Moreover his aggressive and sometimes overly straightforward manner has made him something of a media figure.