BBC NEWS has now confirmed the what and the why of the Reuters buyout:
News and information group Reuters has agreed to be bought out by Canadian financial data provider Thomson in a deal worth about £8.7bn ($17bn).
The tie-up will create the world's biggest financial news and data firm, allowing the new company to leapfrog its main rival, US-based Bloomberg.
The second paragraph is the important one: This deal has nothing to do with the business of running a wire service for media concerned with reporting the news. As the BBC pointed out, the competition is in a much more limited, but also financially more lucrative, space:
Thomson, whose publishing interests include law, tax and scientific research, has been expanding its non-data business.
Reuters will complement its news operations in the US and AFX in Europe, analysts said.
They added that a merged Thomson and Reuters would be in a stronger position to compete with Bloomberg.
The three companies are rivals in the "terminal" market, providing news and financial data on stocks, currencies and bonds to banks, traders and brokerages.
In other words the news service does not signify in this equation, and the Reuters journalists are already feeling doom. As BBC business editor Robert Preston put it:
There will be concerns that over time Reuters general news operations will become marginalised within an outfit that sees its future as supplying intelligence and tools to those who operate in global financial markets.
My only concern is with Mr. Preston's use of the future tense. As I have pointed out, news operations at Reuters are already hurting; and, as far as I can tell, the problems have to do with their global approach to outsourcing. While I have not been researching this systematically, through my own casual reading I have already accumulated (and reported here) two data points:
- A "breaking story" about George Soros and AIPAC that was actually about half a month old
- A report about the domestic problem with contaminated pet food filed form Bangalore
From my vantage point I do not feel I can judge whether or not Reuters does a better job with their financial reporting. The rest of their news, however, appears to be on a downward slope that is unlikely to be changed under the new Thomson regime.