• by April 6, 2004

In a move to shore up its core real-time financial news business, Reuters' Reuters.com says it will limit the availability of significant portions of its Company and Markets News and Target News products to online publishers.

The move comes as Reuters seeks to protect its professional financial/desktop services business amid increasing competition from Bloomberg and Thomson. The decision extends only to the online space; Reuters' broadcast TV and print customers aren't affected.

"The feeling is that some of the players in the online space were beginning to cannibalize some of the parts of those businesses. We want to mitigate that cannibalization and pull some of that content from the free-to-air space," says Walker Jacobs, vice president, Reuters Media, in explaining the rationale for the decision. Jacobs is responsible for Reuters' ad sales business, including Reuters.com, the Reuters sign in New York City's Times Square, and the company's wholesale media business comprised of publishers and traditional broadcasters.

One of the goals of the move is to bring people back into a Reuters environment, "so we can understand how our content is being used," Jacobs explains, adding: "We want to use the audience that we've built of investors, business decision makers, and world citizens to build an ad-supported business online." Reuters.com wants to increase traffic to its site in order to grow its ad business instead of siphoning off precious traffic to rival financial news destinations via its own content.

Jacobs says that 20 online publishers of financial and markets news in the United States will be affected, including Yahoo! Finance, Microsoft Corp.'s MSN Money, Forbes.com, CBSMarketWatch.com, and Lycos' Quote.com; another 20 publishers are affected outside the United States. Reuters' licensing business is "a significant portion of our revenue in the media space," Jacobs indicates, declining to specify numbers.

Online publishers that receive Reuters.com's Company and Markets News offer their readers the ability to conduct searches on particular companies. For example, a search on IBM Corp. would yield all news stories about Big Blue on Reuters.com. Reuters.com's Target News product offers in-depth coverage of commodities news.

Reuters.com also says it will no longer offer machine posting of its wire services. "The Reuters wires can still be used by editorial news organizations as source material, but online publishers are not able to take a feed and post it to the wire as it breaks," Jacobs says.

Reuters.com isn't leaving its online publisher customers completely in the lurch, though. It launched Link-Back, a product that offers publishers an XML headline feed from the Company and Markets newswires free of charge. The headline feed links back to the story on Reuters.com.

For its part, Yahoo! Finance says that Reuters will continue to supply company headlines. When a user clicks on a Reuters headline, they will be redirected to the story hosted on a Reuters site. "Redirecting company headlines to the source of the news feed is similar to the relationship that Yahoo! has with several other content providers such as CBS MarketWatch.com, Forbes.com, TheStreet.com, and The Motley Fool," according to a Yahoo! spokeswoman.

Yahoo! Finance has more than 30 news content partners, including the Associated Press, BusinessWeek, Forbes, CBS MarketWatch, Investor's Business Daily, Financial Times, SmartMoney, TheStreet.com, and The Motley Fool.

Through a spokeswoman, Forbes.com offered the following statement: "Forbes.com is in discussions with other providers, and is developing alternative services."

Dow Jones offers a subscription model for the Wall Street Journal Online, and has a content-licensing business through which it redistributes content via third parties. The licensing business enables it to reach nearly 16 million users globally, according to L. Gordon Crovitz, senior vice president of Dow Jones and president, Dow Jones Electronic Publishing.

"Our licensing of Journal-branded news has been very limited, aimed primarily at driving subscriber growth to WSJ.com," Crovitz comments in an email. "We do license a small subset of Dow Jones Newswires--a few hundred items a day suitable for the consumer Internet from among the 10,000 items we publish daily for financial professionals--branded Dow Jones Business News to Web sites. We have always pursued a policy of getting paid a fair price for this content, reflecting the premium nature of the Dow Jones brand and the high-end quality of the content," he says.

Crovitz notes that at the beginning of the year, Dow Jones rejiggered its content agreement for Dow Jones Business News with Yahoo! Finance "in ways [that] limited the amount of content we offered, and also in ways that help make clear to financial professionals who may be using Yahoo! Finance that the full real-time Dow Jones Newswires can be accessed for a fee." Crovitz emphasizes that the move was made to drive more subscriptions to WSJ.com, where users can get more than just headlines. "In this regard, our approach from earlier this year, coupled with the Reuters decision likewise to adjust its distribution policies, may be seen as part of a trend under which content publishers increasingly are able to receive proper value for their valuable brands and content on the Internet," Crovitz maintains.