Can I Sell You Some Information?

Cemil Ozyurt
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Do you know how the oft-repeated phrase `we live in the information age` is transformed by the business world into money? Let's take a look at how the information being disseminated from the four corners of the globe is collected into a single integrated package before being then distributed.  
Owned by two-term New York major, Michael Bloomberg,  Bloomberg  LP ranks as one of the world's largest financial institutions whose mission is to sell financial and market data information. In its April 2007 issue, Fortune Magazine devoted ten pages to an in-depth report on the company's structure, operations, and size.  

I have had the opportunity to visit the Bloomberg site on three different occasions, to gain operational information from its terminals and learned that Bloomberg is a information source that outrates any news agency.  It charges its customers $1800 a month for a terminal subscription.  At first glance it looks as hard to use as an airplane but as one gets used to it it becomes a kind of “must have” toy. Almost 250 thousand people across the globe are subscribed to these terminals.  So, what kind of information can they gather?

Not only can they access the personal information of almost 1.3 million people, users can also get all sorts of information, trends and data related to stock exchanges, financial institutions and markets, real estate transactions, acquisitions and mergers, almost 5000 daily news articles and data about 136,000 stocks.  

When he was fired from the company he was working for in 1982, no one could have guessed  that the company he then formed, a company that was moving into uncharted territories, could ever become a success.  Today Bloomberg LP employs 9,400 people and the company recorded an income of almost $4.7 billion in 2006 (compare this to the $2.3 billion of export sales that Turkey's leading export company, Toyota, achieved in 2005.)

This means that if Bloomberg were a publicly owned company it would easily reach the 475th  place on the Fortune 500 list. If Mike  Bloomfield, who owns 68% of the shares of the company, decided to put the company up for sale he would pocket something like $20 billion, no mean feat for a company founded just 25 years ago whose only operation is the sale of information.  

So, how are Bloomberg's competitors doing? 150 year old Reuters has a market value of $11 billion. The Thompson Corporation, a company that sells information in various categories ranging from health to finance has a value of $27 billion, while Dow Jones is worth $3 billion. Even though Reuters has a larger terminal network than  Bloomberg, they still do not earn as much profit per terminal as Bloomberg does.   

The Bloomberg example is solid proof that we are truly living in the information age. How many tens of thousands of cars, or thousands of tons of textiles, or thousands of food products would we have to make by classical manufacturing techniques to achieve an income of $4.7 billion? I haven't been able to figure that one out, but maybe you can...

(24th Issue, March 2007) 
Last modified onSaturday, 06 May 2017 10:07