Dow Jones and Company and Reuters announced yesterday that they have merged their business information services Dow Jones Interactive (http://djinteractive.com) and Reuters Business Briefing (http://www.reuters.com) into a new joint venture, Dow Jones Reuters Business Interactive. The new company intends to become a leading global service provider of proprietary and third-party business information to the corporate and professional desktop market. The sales, marketing, and support for existing product lines from both previous concerns will occur before the end of June. Over the next 12 months, Dow Jones Reuters Business Interactive will create a new Web-based integrated product with innovative features and functionality that will replace existing independent services under a common, global marketing policy.
Timothy Andrews, vice president and editor of enterprise products for Dow Jones Interactive Publishing, has been named president and chief executive of Dow Jones Reuters Business Interactive (DJRBI). The company will operate under a four-person board, with two representatives from each parent, and a rotating non-executive chairmanship. The first DJRBI chair is Rob Rowley, Reuters' finance director. The team of executives reporting to Andrews includes Simon Alterman, vice president, director of editorial development; Claude Green, deputy CEO; Skip Grossman, vice president, strategic relationships; Clare Hart, vice president, director of global sales; Michele Lally, vice president, director of global marketing; and Dave Weller, chief technology officer. Andrews, Grossman, and Hart come from Dow Jones Interactive Publishing, while Alterman, Green, Lally, and Weller previously worked at Reuters.
With DJRBI headed up by a Dow Jones executive, and the new company set to be headquartered in the U.S., rather than Reuters' home town of London, it would appear that the new initiative is mainly being driven by Dow Jones. But Reuters is keen to dispel any such suggestion. "Tim Andrews was selected because both Dow Jones and Reuters believe he is the best man for the job, and he has a very impressive track record in this industry," said Peter Thomas, director for media relations at Reuters. He added, "The first chairman of the new company will come from Reuters, and the senior people will be equally split between the two companies, so it is very much a 50/50 joint venture."
The new venture combines a number of assets: combined 1998 revenues of over $225 million; archival rights to The Wall Street Journal, including the international editions; Dow Vision; 950 employees in 30 countries; and access to over 7,200 international business news and information sources. Around 1,000 of these sources come from non-English sources. The promised, fully integrated product is expected to support sources in some 20 languages, with user interfaces for 11 of these languages.
DJRBI will not include consumer Internet products from the two companies, such as the Wall Street Journal Interactive Edition and Reuters' digital new media products. Nor will it include their real-time financial newswires, which continue to compete with each other.
The new company plans to integrate some of their mutual content within a few months. According to Andrews, by July they will offer a 30-day archive of Reuters Business Briefing content through the Dow Jones Interactive service, while Reuters Business Briefing users can expect to see a similar archive of Dow Jones content around the same time. The new integrated product suite, which should take a year to develop, will fully integrate content from both suppliers and replace other product lines. Andrews did indicate that though they intend to continue their push toward the Web for all customers, they still plan to support the Windows interface product for at least a year and probably longer.
What Drove the Move?
Global challenges clearly drove the decision. Dow Jones currently draws some 95 percent of its revenue from the Americas, while Reuters draws 70 percent from Europe and 10 percent from Asia. The new company aims to earn 60 percent of its revenue from the Americas and the rest from Europe and Asia. The new service will particularly target financial services, computer hardware and software, chemicals, aerospace, telecommunications, automotive, and media and entertainment. Andrews noted: "This is a critical time for corporations as they make decisions to distribute news and information to their employees around the world. Demand for electronic-based information has never been greater, and the key to success is serving customers with a comprehensive Web-based product that truly represents the global marketplace. Reuters and Dow Jones both have successful interactive business services, and merging them will allow us to reach more customers faster to meet their rapidly changing information needs."
According to Andrews, the two parents of DJRBI are "fully committed to help us make it a success. With the right capital and impressive marketing, we plan to grow market share and the business we have." In response to a query, Andrews confirmed that an unspecified cash transfer from Reuters was involved in inaugurating the new company. Dow Jones Interactive had 1998 revenue of about $125 million while Reuters Business Briefing had about $100 million.
But was Reuters' decision to link up with Dow Jones a defensive move? "This was not an act of weakness," insisted Peter Thomas of Reuters. "The marketplace is clearly indicating that users want to go to one organization for their information. Reuters had a geographical strength in Europe and Asia, and Dow Jones was very strong in the U.S. So we felt that this was a good, complementary way to satisfy the market. And by combining the two companies we will be able to grow the business more quickly than we might otherwise have done."
Andrews clearly indicated that the merger is "not about downsizing. We are not reducing jobs to save costs. We are bringing together two strong brands and products." He had already received some calls from customers indicating their anticipation of being able to get worldwide deployment of key information with one contract for one product worldwide.