Reuters

Reuters Group plc (LSE: RTR and NASDAQ: RTRSY) is a financial market data provider and news service that provides reports from around the world to newspapers and broadcasters. However, news reporting accounts for less than 10% of the company's income. Its main focus is on supplying the financial markets with information and trading products. These include market data, such as share prices and currency rates, research and analytics, as well as trading systems that allow dealers to buy and sell such things as currencies and shares on a computer screen instead of by telephone or on a trading floor like that of the New York Stock Exchange. Among other services, the most notable is analysis of 40,000 companies, debt instruments, and 3 million economic series. Competitors include Bloomberg L.P. and Dow Jones Newswires.

History

Paul Julius Reuter, born to a rabbi in Kassel, Germany, noticed that, with the electric telegraph, news no longer required days or weeks to travel long distances. In 1850, the 34-year-old Reuter was based in Aachen, Germany, close to the Dutch and Belgian border, and began using the newly opened Berlin–Aachen telegraph line to send news to Berlin. But there was a 76-mile (122 km) gap in the line between Aachen and Brussels. Reuter spotted the opportunity to speed up news between Brussels and Berlin by using homing pigeons to bridge the gap in the line.

In 1851, Reuter moved to London as attempts to lay a submarine telegraph cable from Dover to Calais looked to be succeeding, after failures in 1847 and 1850. He set up his "Submarine Telegraph" office in October 1851 just before the opening of the cable in November, and agreed to a contract with the London Stock Exchange to provide stock prices from the continental exchanges in return for access to the London prices, which he supplied to Paris brokers.

In 1865, Reuter's private firm was restructured and became a limited company called Reuter's Telegram Company. Reuter had been naturalised as a British subject in 1857.

Reuter's agency built a reputation in Europe for being the first to report scoops from abroad, like the news of Abraham Lincoln’s assassination. Today, almost every major news outlet in the world subscribes to Reuters. It operates in 200 cities in 94 countries, supplying text in 19 languages. Edward G. Robinson starred in a Hollywood film about the company called A Dispatch from Reuters in 1940.

Reuters was floated as a public company in 1984 on the London Stock Exchange and on NASDAQ in the US. However, there were concerns that the company's tradition for objective reporting might be jeopardised if control of the company later fell into the hands of a single shareholder. To counter this possibility, the constitution of the company at the time of flotation included a rule that no individual was allowed to hold more than 15% of the company. If this limit is exceeded the directors can order the shareholder to reduce the holding to less than 15%. This rule was applied in the late 1980s when Rupert Murdoch's News Corporation, which already held around 15% of Reuters, bought an Australian news company which also had a holding in Reuters. The acquisition meant that Murdoch then held more than 15% and he was obliged to reduce the holding to less than 15% in line with the rules.

At the same time, as a further measure to protect the independence of Reuters news reporting, The Reuters Founders Share Company was set up. This is a company whose sole task is to protect the integrity of the company's news output. It holds one "Founders Share" which can outvote all other shares in the event that an attempt is made to alter any of the rules relating to the Reuters Trust Principles. These principles set out the company's aim to preserve its independence, integrity and freedom from bias in its news reporting.

Reuters began to grow rapidly in the 1980s, widening the range of its business products and expanding its global reporting network for media, financial and economic services. Recent key product launches include Equities 2000 (1987), Dealing 2000-2 (1992), Business Briefing (1994), Reuters Television for the financial markets (1994), 3000 Series (1996) and the Reuters 3000 Xtra service (1999).

In the mid-1990s the company had a brief foray into the radio sector with London Radio's two stations, London News 97.3 FM and London News Talk 1152 AM, which replaced LBC in 1994. A Reuters Radio News service was also set up to compete with Independent Radio News.

In 1995, Reuters established its "Greenhouse Fund" to take minority investments in a range of start-up technology companies, initially in the United States.

On May 15, 2007, The Thomson Corporation reached an agreement with Reuters to combine the two companies, a deal valued at US $17.2 billion. Thomson will control about 53% of the new company, to be named Thomson-Reuters. The new head of Thomson-Reuters will be Tom Glocer, the current head of Reuters. The earlier rule of 15% ownership (see above) was waived; the reason as given by Pehr Gyllenhammar, chairman of the Reuters Founders Share Company, was "The future of Reuters takes precedence over the principles. If Reuters were not strong enough to continue on its own, the principles would have no meaning." citing the recent bad financial performance of the company.

In October 2007, Reuters Market Light, a division of Reuters launched a mobile phone service for Indian farmers to provide local and customized commodity pricing information, news and weather updates.

Journalists

Reuters has a team of several thousand journalists, who, over the years, have covered major news events, sometimes at the cost of their lives. In May 2000 Kurt Schork, an American reporter, was killed in an ambush while on assignment in Sierra Leone. In April and August 2003, news cameramen Taras Protsyuk and Mazen Dana were lost at the hands of the US forces in Iraq. During 2004, the company lost cameramen Adlan Khasanov in Chechnya and Dhia Najim in Iraq.

The first Reuters journalist to be taken hostage in action was Anthony Grey. Detained while covering the Cultural Revolution in Peking in the late 1960s, said to be in response to the jailing of several Chinese terrorists by the colonial British Government in Hong Kong. He was considered to be the first political hostage of the modern age and was eventually released after almost 2 years solitary confinement. Awarded an OBE by the British Government in recognition of this, he went on to become a best selling author.

Investments

Notable investments include:

* Factiva:

In May 1999, Reuters entered a joint venture with long-time rival, Dow Jones & Company, to form Factiva, a business news and information provider. In December 2006 Reuters sold its 50% share in Factiva to Dow Jones, who is now the sole owner.

* TIBCO Software:

In July 1999 TIBCO completed an IPO on NASDAQ; Reuters retains a substantial proportion of the shares. Reuters announced in early 2000 a range of major initiatives designed to accelerate its use of internet technologies, open new markets and migrate its core business to an internet-based model.

* Instinet:

In May 2001 Instinet completed an IPO on NASDAQ; Reuters sold its majority stake in Instinet to The Nasdaq Stock Market in 2005.

* Bridge Information Systems:

On September 28, 2001, completed the largest acquisition in its history acquired certain businesses and assets of Bridge Information Systems Inc. Also during the year, the Group acquired 100% of Diagram fip SA and 92% of ProTrader Group LP. In October 2001, the Group disposed of its majority stake in VentureOne Corp.

* AVT Technologies;

In December 2002, Reuters announced that it would acquire AVT Technologies, a specialist in foreign exchange transaction technology. Concurrent with the deal, Reuters established an Automated Dealing Technologies business unit, headed up by Mark Redwood, CEO of AVT Technologies.

* Multex.com Inc.:

In March 2003, Reuters acquired Multex.com, Inc., a provider of global financial information.

* EcoWin AB:

In November 2005, Reuters acquired also EcoWin AB, Inc., a provider of global fianancial, equities, and economic data.

* Application Networks:

In June 2006, Reuters acquired Application Networks, Inc., a provider of trade and risk management software based on JRisk, and agrees to acquire Feri Fund Market Information Ltd (FERI FMI) and its fund database subsidiary, FI Datenservice GmbH (FID)

* Clearforest:

In June 2007, Reuters acquired Clearforest, a provider of Text Analytics solutions, whose tagging platform and analytical products allow clients to derive business information from textual content.

* Action Images:

On September 19 2005, Reuters purchased North London-based Action Images, a deep collection of sports photography that includes more than 8 million images of which 1.7 million are online.

From 1939, the Reuters corporate headquarters was in London's famous Fleet Street, but in 2005 Reuters moved to a larger building in the more modern Canary Wharf. The Reuters Building at 30 South Colonnade is near the One Canada Square tower, Jubilee Park and Canary Wharf tube station. The open space below the Reuters building has since been renamed Reuters Plaza.

The company's North American headquarters is the Reuters Building at 3 Times Square, New York. It is on 7th Avenue between 42nd and 43rd Streets, and was constructed from 1998 to 2001.

Allegations of bias

The news organization has been accused of showing an anti-Israel and anti-American bias, by sources such as the conservative National Review and The Wall Street Journal's editorial division.

Wording

This became a point of controversy in September of 2001, regarding their coverage of the September 11, 2001 attacks. Reuters global news editor Stephen Jukes wrote, "We all know that one man's terrorist is another man's freedom fighter and that Reuters upholds the principle that we do not use the word terrorist." The Washington Post media critic Howard Kurtz responded, "After the 1995 Oklahoma City bombing, and again after the attacks on the World Trade Center and Pentagon, Reuters allowed the events to be described as acts of terror. But as of last week, even that terminology is banned." Reuters later apologized for this characterization of their policy, although they maintained the policy itself.

The September 20, 2004 edition of the The New York Times reported that Reuters Global Managing Editor, David A. Schlesinger, objected to Canadian newspapers editing Reuters articles through inclusion of the word "terrorist," stating that "my goal is to protect our reporters and protect our editorial integrity."

Due to this policy, Reuters was careful to only use the word "terrorist" in quotes, whether quotations or scare quotes. However, when reporting the 7 July 2005 London bombings, the service reported, "Police said they suspected terrorists were behind the bombings." The contrast between this and their aforementioned policy was criticized, although by that point Reuters policy was to use such words "when we are quoting someone directly or in indirect speech," and this headline is an example of the latter. The news organization has subsequently used the term "terrorist" without quotations when the article clarifies that it is someone else's words.

Photographs controversies

Reuters was accused of bias against Israel in its coverage of the 2006 Israel-Lebanon conflict, in which - among other actions - the company used two doctored photos by a Lebanese freelance photographer Adnan Hajj. On August 7, 2006, Reuters announced it severed all ties with Hajj and said his photographs would be removed from its database. Critics alleged that removing Hajj dealt with only a symptom of much deeper problems at the news organization: bias and widespread use of local freelance photographers, which can result in Reuters inadvertently acting as a "propaganda outlet" (Credit: Wikipedia)

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