Reuters (NSDQ: RTRSY) COO Devin Wenig, the proposed CEO of the Reuters businesses following the pending Thomson-Reuters merger, shared some interesting thoughts on the current merger process and the next generation of business media data at our Future Of Business Media conference.
— European merger clearance: Although the European Commission this month kicked off a more rigorous phase-two competition scrutiny process: “Everything so far is basically as expected. It can be a slow and painful process … Things are okay. It’s going to take some time … so far, things are pretty smooth, it’s just taking more time than we might like.” He reiterated the expectation of approval early in 2008. (During FOBM, Reuters and Thomson (NYSE: TOC) asked the commission for an extension to its investigation, Reuters itself reported).
— Culture clash?: “There’s some very similar parts of the culture, there are also some very different parts of the culture of the business.” Asked about fitting Toronto-based Thomson with Reuters, Wenig jested: “I haven’t been able to figure out what a Canadian culture is yet, but so far so good.” “We’re not necessarily wedded (to the idea) that the Reuters brand must be the single brand everywhere – Thomson will come in to it.”
— News Corp: After a year of frenetic activity in the financial news wire segment, capped by News Corp’s Dow Jones (NYSE: NWS) acquisition as well as Thomson-Reuters’ own hook-up, have these relationships been strained? Wenig: “We have a great relationship with Dow Jones … It’s one of these very complicated cooperative coopetition relationships. Obviously there have been a lot of forces that have been building up in our industry … the move from west to east, the commoditization of content that a lot of these companies carry has all been building up since 2002 and this year the dam broke.” Wenig forecasts further consolidation.
— Google (NSDQ: GOOG) News: Would Reuters follow the AP, AFP and PA in publishing stories directly to the site? Reuters has a different strategy – “to monetize our content by acquiring traffic”. “We were not part of that (deal) – not because it wasn’t offered to us, but because that’s not where we see content being created. The Googles, Yahoos and other portal aggregators in the world… we’re not here to help them, they’re here to help us.”
— Change: Wenig said the combined Thomson-Reuters will “still be Reuters business as it is today plus the bits of Thomson that fit in to financial or business media … the Reuters business itself will be larger”. In fact, Reuters is “trying to limit the impact of the merger on the entire business”, having created a separate team to oversee the merger as an “incremental project” and trying to “isolate the distraction”. He admitted it can be “a juggling act” but Reuters’ strategies will go in to the mix with relatively little overhaul: “I don’t think we would have gone in to this if we thought it was going to really change what we were doing because we were (already) really happy with what we’re doing”.
— Microsoft: Some commentators had expected the EC’s victory against Microsoft in September would lead it to pursue antitrust more forcefully, but: “The Microsoft case has its own facts and circumstances. The EU can be strong, should be strong. I don’t know whether they’re feeling more mojo after … Microsoft (NSDQ: MSFT). We have a different set of facts and circumstances. There’s no sign that they’re singling us out or treating us unfairly.”
— Credit crunch: How might the state of the mortgage sector affect the business? There’s no impact at all so far, Wenig said, though “obviously there is a chance that could bleed out in to a general recession” … “we’re watching carefully”.
— Direct-to-consumer: Reuters talked three years ago of creating consumer-facing sites; where’s the evidence now? “We’ve changed out approach. Our strategy did change from trying to monetize that content directly by selling it to portals and other hubs to a traffic acquisition strategy. We still syndicate but oftentimes that ends up driving traffic back to. If you look at our consumer media strategy, it’s very small but it’s one of the fastest growing of our company.” … “We don’t have a traditional consumer business that’s been disrupted by the shift in traditional advertising for instance.”
— The future: Wenig has an exciting vision for overhauling financial data terminals that are “somewhat archaic compared to what’s going on on the web”. His “next-generation” terminal would be a “multimedia experience, is fully social network-enabled, is collaborative”. “Part of that is also about aggregating context that we don’t have … the terminal of the future is not only going to have Reuters content … it’s also going to bring in a bunch of information from the web and do it contextually”. Wenig acknowledged wires can give their own coverage of events but “I want to see what the blogosphere is saying about it – i want to see not just what Reuters says about it but what the world is saying – that’s a huge shift for a 1980s DOS screen.”
— The Holy Grail: How will this happen? Wenig talked up “data concordance” – the application of a single metadata system that facilitates linkages between articles. “As basic data is commodotized, it’s insight that people are looking for… a lot of that insight may reside in other vertical pillars (ie. blogs) … If we can get all this data to speak to each other, then you’ve created the professional internet and that’s the holy grail.” When? “Stay tuned because there’s a lot we’ll be saying soon about a number of these things.” Five years from now – “everybody is going to bleed out in to multimedia and there’ll be more competition – these boxes that companies have grown up in, that’s over – the impact of these mergers is that everybody will be multiplatform, multimedia, monetizing in each other’s space and it’s going to be an exciting world but it will be confusing.”