Monday, November 27, 2006

Thomson's AP News Deal Strengthens Global Positioning, But Is It Enough?

While real-time financial quotes, trading tools and market analytics form the backbone of major content services in the securities industry, news is one of the key features of a financial content service that put its brand on the lips of traders. Thomson Financial's broadening of its news services through its announced deal with the Associated Press is another major step by Thomson to build an "on the lips" news brand, building on its July acquisition of AFX News from Agence France-Presse. Just as the AP-Dow Jones Economic Report created in the 1960s a combined service with far broader impact in financial markets Thomson is assembling a range of content with global reach to compete with providers such as Reuters who have had a worldwide financial news footprint for more than a century.

But will building up news assets through traditional news channels be enough to make a deal-changing impact for Thomson Financial? Certainly deals like the AP alliance are absolutely necessary for Thomson to have a hope of pulling down more major deals beyond its core of low-end equities services and bond trading networks, but to some degree Thomson is chasing a target whose time is already passed. News wire services are no longer the be-all and end-all for news that moves markets, with corporate weblogs, proprietary Web scraping services and other news gathering capabilities competing with major news services for the attention of traders and analysts in financial institutions. At the same time the huge trading rooms that these services once powered are getting smaller by the day as highly automated trading capabilities begin to create a more narrow marketplace for financial news services.

Even as Thomson Financial has a tough row to hoe in priming up a world class news service in the twilight of the widespread desktop trading era, competitors such as Reuters are learning how to leverage news assets far more effectively in online media markets. When Thomson jettisoned most of its print operations several years ago it lost touch with not only the surging ad revenues now found in online media markets but also a media outlook that provides a more engaged and interactive relationship with content markets. As a wide array of database publishers consider how to make more use of online outlets for their assets so must Thomson Financial consider how to build a more supple and engaged content brand that goes beyond the lockstep chase of Bloomberg and Reuters desktop positions via traditional marketing channels. Hopefully future Thomson news deals will be able to build on a now-impressive core of essential media to incorporate more progressive news sources and delivery platforms.
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