According to sources, Moody's had indicated some time ago that it wanted to sell the FIS division. One company employee stated that "FIS was a relatively small division in the scheme of things." Another source commented that Moody's and its FIS division had very different strategic goals. John Rutherfurd, president, Moody's Investors Service, said, "The decision to sell the FIS division is based on our desire to concentrate on our core credit rating and analysis operations."

FCC?

So, you haven't heard of this FCC? It's not surprising. The Financial Communications Company, Inc. was just formed in 1997 by Berwick Capital, a fund created by Robert S. Andrialis, currently chairman and CEO of FCC, and by M/C Partners of Boston. The company headquarters is in Chicago, with offices in New York and California. The company is growing rapidly by acquisitions of various magazines and services. Its most important acquisition to date is, of course, Moody's FIS. The company states that it "is a rapidly growing global provider of decision-oriented, value-added content and analytic services for both individual and institutional investors in fixed income, equity, and futures markets."

The aggressive new company acquired Futures magazine, the so-called "bible of the derivatives industry," last year along with Tick Data, supplier of detailed trading information, earlier this year. It then acquired Research and Buyside magazines, and, with a new startup magazine called Investor Direct and the Web site Streetnet.com, formed the IR Media Network as a one-stop investor relations advertising and promotional vehicle linking the four outlets.

FCC chairman and CEO Andrialis said: "The addition of these widely respected products and expansive databases to the FCC family enhances our strategy of becoming an all-in-one source of reliable, comprehensive financial information. We have built FCC by the acquisition of established franchise properties, and Moody's FIS certainly is the gold standard in the business and financial information industry. Our intention is to mine the gold--the data--and refine it into new custom-tailored products. As someone who spent years in financial publishing at Standard & Poor's, I know how highly regarded the Moody's products are." A company spokesperson also indicated they would develop more products focusing on international data.

Vicki Raeburn, formerly at Primark, has been named the new president of FIS. Danny Zottoli, the former head of the Moody's FIS division, has stepped down and will function as a consultant to the company. FIS currently has 250 employees. The database management group, responsible for information collection, system maintenance, and product development, is located in Charlotte, North Carolina. Sales, customer service, and additional product development functions are based in New York, with sales representatives in 10 other North American offices and Tokyo. FCC has no plans to alter that arrangement, though the New York group will likely move out of the Moody's building.

Another Upstart

So, another upstart little guy purchases a bigger player in the information industry. Moody's Investors Service had faced the task of changing FIS to meet increased customer expectations and pressures from Web-based competition, and decided to forgo the challenge and not pour in the additional effort and capital--instead concentrating on higher-end customers for its core rating operations. Perhaps this fresh and energetic upstart company can provide the vision and innovation to succeed in this increasingly tough Web world. But, as Barbara Quint, editor of Searcher, put it, "disintegration of the old order continues."

Contact FIS for information on FIS and FCC products and services at 800/342-5647, ext. 0430; e-mail: fis@moodys.com.