Thursday, October 21, 2004

Reuters Mulls Over Radianz Sale to BT: Honing the Mission or Hacking it Off?

The Wall Street Journal breaks a cracker of a story on the potential sale of its majority stake in Radianz to British Telecom, potentially raising up to GBP 140 million in funds in the process. Radianz was formed out of the network operations unit of Reuters four years ago with networking partner Equant, providing secure and reliable network connectivity to the financial community. Recently Radianz has moved to provide more value-add content and transaction services via its networks to its clients, moving towards providers such as The MacGregor Group that have been expanding their connectivity offerings for trade order routing and management to include more market data services. Perhaps in the end it is proving to be too big a leap into the value-add arena when their backbone revenues are up against communications giants like BT that have more scalable facilities. Reuters will get some well-timed cash out of the deal, but at the end of the day the ability of network services companies like MacGregor to provide a rich array of content services over mission-critical networks should not be overlooked as a market opportunity. It's a tough choice to make to walk away from connectivity altogether, but without the richness of a range of post-trade services such as MacGregor's to leverage the trading content components it's probably best to call it a day.
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