Thursday, September 8, 2005

Rumor of Google Acquiring Reuters: Closer Than Thought?

The Guardian's Wednesday business roundup touched on Reuters stock taking a nice uptick on "wild rumors" of an acquisition by Google. First of all we think that this is unlikely in the short run, in spite of some interesting synergies. Think about the culture clashes resulting from absorbing one of the world's oldest electronic publishers, which, in spite of its comprehensive modernization efforts, is still awash in a corporate culture very distant from that of Google's ("Don't be evil?"). It's far more likely that the rumors are springing from Google's emerging interest in creating a media portal that is likely to use financial content and tools from Reuters and other financial content providers. But at the same time it's fun to think about how the pieces would fit together.

Internet-aware Reuters CEO Tom Glocer has been instrumental in reworking its technology and focus into a more streamlined property with well-positioned public Web content while trying to build best-of-breed financial content solutions for the most technology-driven players in financial markets. Geekishness runs thick in both companies. Most importantly the international reputation of Reuters news may make it easier for Google to get more growth in overseas media markets by claiming Reuters as its own. It would also give it some people with experience in transaction-driven business content markets that have eluded Google in large part. The lack of growth at Reuters and the lack of operational synergies loom as the largest sensible reasons to call this rumor just a bit of foam on the last beer of the night. But at some point in the next year someone is going to get brave and give Reuters a new home. Why not Google, which may have much to gain from having a new treasure trove of unique and valuable content for individuals and institutions at its disposal...?
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