Mumbai: It seems only apt that the chairman of Bloomberg Lp, the provider of financial data and news, is a former investment banker who is completely conversant with his company’s famous terminals. Credit Suisse veteran Peter Grauer joined Bloomberg in 2001. In an interview, he talks about his firm’s interest in local business channel UTV, emerging markets, and his company’s plans for its latest acquisition, BusinessWeek magazine. Edited excerpts:
Why did you decide to partner with UTV?
We did a lot of thinking about who the appropriate partner for Bloomberg would be before we decided on UTVi. A lot of our international feed will be on UTV, incorporated into audiovisual content. We’ve been impressed with the vision that UTV brings. They bring a lot of energy and experience to the table and they’ve marked out very clearly how they want to approach the market and we are very impressed with that.
Up for competition: Grauer says Bloomberg will pick stake in UTV. Abhijit Bhatlekar / Mint
We think that the Bloomberg name with a partnership (with UTV) on air will help promote the Bloomberg brand and allow us to sell our other products more effectively. We expect some rub off effect on that. We also think that the fundamentals of our agreement (with UTV); things that we have not publicized—nor will I talk about them—are such that if we are successful, there will be a lot of economic returns involved with that part of the business (TV) for us. For us, it’s initially further building our brand and creating value for Bloomberg’s overall business in India. India’s one of the most important emerging markets in the world. We have, for the first time in our 28-year history, built a five-year plan for India.
Are you picking a stake in Bloomberg-UTV? Do you see room for four-five business channels in India?
Yes, we will pick stake in UTV, though we don’t want to talk about it just yet. That’s a part of the arrangement. We like competition. In the US also, we have enough news channels competing with us such as CNBC, Fox, etc. I have been in the information business for 15 years and when I joined the business, there were 10 players. Now there are arguably only two.
There would be some who say that you have not been successful in the TV broadcast business...
Depends on how you look at it. We’ve always looked at broadcast as a great brand-building tool around the world. It got us known out there when people did not know who Bloomberg was and what a Bloomberg terminal is. We made a strategic change early this year when we decided to focus on English language content (on Bloomberg TV) as opposed to local language content. For us, although I would always like every one of our businesses to do better; our TV operation and multimedia business have helped in promoting and building the Bloomberg brand and creating a better awareness and giving us access to many more corporate and government officials.
Many people fear that ‘BusinessWeek’ will end up as another promotional tool for Bloomberg...
We did the BusinessWeek deal in (the) context of a clear goal that we have: to be the most influential source of business and financial news in the world. BusinessWeek has almost a million subscribers a week and their subscription services have held up quite well over this period of time. It is read by another four million (a week) around the world. Most of those readers are not people who conventionally use the Bloomberg terminal or access our website. It gives us a broader market of people that we historically have not had access to.
On our real time service, we produce 5,000 stories in 24 hours that go to 340,000 users in 120 countries around the world and allows them to make important business decisions. This acquisition will help us combine the Bloomberg.com and BusinessWeek websites which will make us the fourth largest financial website in the world and the first largest non-portal website. It will get us advertising expenditure from major clients around the world.
So what happens to ‘BusinessWeek’? Would you downsize teams there? Any changes we can expect?
The deal with BusinessWeek will not close till December. It’s too early to say. We have a team working on what we are going to do with BusinessWeek going forward. We are still in the planning stage.
How have you weathered the financial storm of last year? Have sales of terminals come down?
We are down today from the peak, which was the end of November 2008, by just under 3% in unit terms. But we have been growing since August and are regaining some of that lost ground as some of our customers start to expand again and proliferation of new customers along the way.
Where are these new customers coming from?
New broker dealers. We’ve seen a dramatic proliferation around the world of people leaving large firms and starting smaller firms. We’ve seen a significant increase in our business from government agencies around the world ranging from the central bank of India to the federal reserve of New York city. People want more access to real time financial information and they come to us to help them. A number of countries, (for example) emerging markets are continuing to grow.
Business in China is up 14% over a year ago. India is up slightly (during the last nine months)... and business in South Africa, Brazil, Chile, Mexico and other locations. We have customers over 120 countries in the world and they all don’t go down in the same time and come up in the same time.
The terminal business remains the focal point of the business...
The terminal business for us is 85% of our revenues. It’ll always be the most important part of our business. We have four or five other businesses which for the most part have continued to grow during this period of time. The terminal business drives what we do and provides us the financial wherewithal to build our research and development capabilities and do UTV (like) deals.
How much are emerging markets contributing to this?
Emerging markets overall, today for us represent about 20-22% of our revenues. We have just completed a five-year business plan for India, China, Brazil, Middle East. We are looking for more and more opportunities to be the local provider of choice...across all asset classes. With mushrooming wealth, the asset management business in India continues to grow and we see huge opportunities for us.