Thomson Reuters' Brain

Both companies run highly competitive global financial news services. Bloomberg has recruited a clutch of big names. One recent catch was Jane Bryant Quinn, regarded by many as the nation’s premier personal finance columnist. Another was Al Hunt, a longtime star at the Wall Street Journal.

Reuters, which had kept a lower profile, is pushing back. Last year, it recruited Breakingnews cofounder Jonathan Ford to lead a new Reuters Commentary Service. He hired reporters, including blogger Felix Salmon, in an aggressive effort to build audience.

Then in July, Reuters’ Matthew Goldstein rocked the financial world with his scoop on the arrest of a former Goldman Sachs trader for allegedly stealing the company’s computer codes. The story escalated into a high-stakes controversy over the fairness of algorithmic or “high-frequency trading,” which has grown so explosively that it now accounts for half the volume on the New York Stock Exchange.

Any efforts to rein in such trading would affect another financial business where Thomson Reuters and Bloomberg compete: datafeeds. Both companies feed rapidly changing streams of information into databases in customers’ back offices and “black box” computerized trading devices. Mathematical analysis of the stream enables those customers to make automated trades that exploit market movements at subsecond speeds. Taylor estimates that datafeeds account for up to $1 billion of Bloomberg’s $6.2 billion in annual revenues, and about $3 billion at Thomson Reuters. He adds that datafeeds are a highly profitable and rapidly growing part of Thomson Reuters’ business.

Despite the hammering the financial services industry has taken, Taylor expects that the financial information and analysis business will be down only 1 to 3 percent this year from 2008’s nearly $23 billion. He cites the boom in automated trading and datafeeds, a changing regulatory environment (which raises demand for data and analysis), and growth in emerging markets as reasons.

None of the datafeed business runs through Eagan. But last year, Thomson Reuters opened a new data center there, a $50 million investment, on the strength of its businesses overall. The company posted a 6 percent gain in first-half operating profits this year and raised its dividend. Its stock has recovered from losses suffered during last fall’s financial meltdown; by late summer it was flirting with 52-week highs and outperforming the market.

“We are almost certainly going to be building more data centers here,” Warwick says. “We have the land and we obviously have the critical mass to do that.” The 290 acres of the campus are almost all owned by Thomson Reuters and represent just over half the land the company occupies worldwide.