What's a Bloomberg?

On a weekday morning in Tokyo, reporter Joy Tadaki prepares her first file of the day on the Japanese stock market, compiles a two-minute radio report on the latest business news out of Tokyo, then hurries into a TV studio and does a live spot on the same material. As the day progresses, Tadaki, an American journalist of Japanese descent, files updated stock market reports, anchors a radio report on Asian business news, and prepares for an interview with a Japanese businessman she'll be taping later in the week.

"The thing that we're doing," Tadaki's editor, David Butts, explains, "is creating a multimedia journalist. At other news companies, you'd find these operations in different buildings or on different floors. Here, they're all in the same room, all produced by the same person." Most editors and reporters in Butts's thirty-eight-person Tokyo bureau are expected to do print, radio, and TV. They have even been coached on radio talk and their TV presence.

In Austin, Texas, meanwhile, on the same day that Joy Tadaki is tracking the Japanese stock market, Anthony Shuga, an assistant business editor for the Austin American-Statesman, sits down at the keyboard of a small grey two-tiered computer terminal. Shuga is not interested in Japan on this particular day, but he is interested in the continuing peso devaluation crisis in Mexico and its effect on Austin-based businesses. He calls up eighty-five pages of Mexico business stories, charts, and background information. Noticing a chart tracking monthly closings of the Bolsa Index, he dials an 800 number, gets instructions about how to customize it for American-Statesman readers, then makes a copy for the graphics department. "I watched till six or seven last night to see what the wires had, and they didn't have anything," Shuga says, "so what I've got here is a great help."

Welcome to both ends -- producer and consumer -- of Bloomberg Business News, a computerized financial information service founded by Michael Bloomberg, a former head of the equity trading desk at Salomon Brothers, Inc. Bloomberg aspires to build the CNN of business news, and in just five years he seems to be well on his way. Through a combination of chutzpah, hard work, and drive, the fifty-three-year-old Bloomberg has taken his company, Bloomberg L.P., and shouldered his way into the relatively small fraternity of real-time information providers. By providing volumes of valuable financial data to both "the industry" and to journalists -- thousands of items a day -- Bloomberg has forced the established members of the fraternity to take notice.

At the heart of the Bloomberg empire, as central to the operation as the black monolith is to Arthur C. Clarke's 2001, is a machine. It's a desktop computer terminal known eponymously as "the Bloomberg." (Michael Bloomberg is not known for his modesty.) Some 47,000 of these multimedia terminals sit on the desks of Wall Street traders, bankers, analysts, money managers, and other finance professionals.

The "Bloomberg" is the company's profit center; each machine is leased for $1,000 a month. The terminal provides its subscribers not only continuously updated stock and bond prices -- thus the term "real-time" -- but detailed securities analysis, historic data on companies around the world, dividend histories, and business graphics, as well as breaking news, sports scores (including cricket), weather information, travel services, even Christmas catalogs and flowers by wire. The terminal transmits audio, video, and still pictures, and there's a lap-top Bloomberg portable.

At the bottom of each Bloomberg story is the name and phone number of the reporter. "You can call them up, and they're always friendly and willing to talk," one subscriber says. "I don't know any place else that allows you to do that."

There are probably half a million terminals with real-time information around the world, according to Rusty Todd, formerly a news executive with Dow Jones/Telerate and now chairman of the journalism department at the University of Texas at Austin. Todd's estimate includes terminals serviced by Telerate (a Dow Jones company), Knight-Ridder, The Associated Press, and Bloomberg in this country; Reuters; three big information services in Japan, and VWD in Germany. Although Bloomberg is smaller than Dow Jones, Reuters, and other financial data suppliers -- Reuters, for example, has 1,600 journalists at 128 news bureaus -- the volume and range of information Bloomberg provides is already on a par with the older, more established operations. "They've grown with incredible speed," Todd says.

Bloomberg Business News, the centerpiece of the operation, has 335 reporters in 56 news bureaus worldwide. The main U.S. bureaus are in New York City (for financial news) and Princeton, New Jersey (for business and company news). Along with serving the financial professionals, the service since 1991 has also been providing material to newspapers.

Bloomberg material also is syndicated to customers at 38 radio and 5 commercial TV stations nationwide, and some 200 public television and 500 National Public Radio stations carry Bloomberg business programs. The company offers informational TV via cable and satellite, it owns several small New York TV studios, one of which produces Charlie Rose; and it owns New York City's WBBR-AM, a station with an all-news format and a business focus. A monthly magazine -- called, naturally, Bloomberg -- was launched in 1992 and has a circulation of 90,000. Bloomberg Personal, a slick financial magazine supplement reaching some 6 million subscribers, is an insert in 18 metro dailies across the country.

Forbes magazine has estimated that Michael Bloomberg's 70 percent stake in Bloomberg L.P. is worth $1.3 billion. Merrill Lynch's initial investment of $30 million for the other 30 percent in 1984 is now worth an estimated $600 million. According to Michael Bloomberg, annual revenues for Bloomberg, L.P. are close to $600 million, more than double what they were in 1991.

 "Mike Bloomberg saw an opportunity to jump on the new technology, and he did it much more quickly than Dow Jones or The New York Times Company did," says Joshua Mills, a New York Times business and financial news editor.

That opportunity lay in a fortuitous combination of rapidly converging technologies, an increasingly dense and interconnected "nervous system" of global communication, and an exponentially expanding volume of traffic in news and information. Bloomberg understands that "finance," as economist Peter Schwartz has observed, "is not one of the biggest customers of communication services, it is by far the biggest customer."

He was in a position to start his company in 1981 because of money he received as a partner when the Phibro Corp. merged with Salomon Brothers. "I had spent sixteen and a half formative years watching other companies," Bloomberg says, "but when Salomon was sold to Philipp Brothers, I was not asked or invited to join the new company. I read somewhere it was because I thought I could run the company better than they could, and that's probably a fair statement. Let's just say I disagreed with their accounting and hiring practices."

In its first eight years, his new company concentrated on providing data and analysis to financial institutions. Then he added another ingredient. In 1989, a year after Matthew Winkler of The Wall Street Journal interviewed Bloomberg for a story he was doing, Bloomberg called him up with a question: "What would it take to get in the news business?" After Winkler answered him, Bloomberg hired the veteran writer away from the Journal, and made him editor-in-chief of the new Bloomberg Business News.

"Bloomberg was a company for eight years before there was prose," Winkler says. Michael Bloomberg and people like him, he adds, "have been buying money, selling money, trading money, and investing money for a living for years. I thought it was a great opportunity to marry their intelligence and knowledge about money, which has been lacking in journalism, and combine it with the intelligence and knowledge and writing talent of journalists, and put it on a real-time basis."

"Matt Winkler loves scoops," says Esquire contributing editor Randall Rothenberg, who helped Bloomberg reorganize its European news division last year. "He loves investigative projects, great leads, good writing. Of course, their bread and butter is market reports."

The decision to provide terminals to newspapers was a direct bid for journalistic credibility, Winkler acknowledges. In the process of setting up a Bloomberg Washington bureau in 1989, he applied to the Standing Committee of Correspondents of the daily congressional press gallery for credentials to cover Capitol Hill. "They wanted to know 'Where are you published?' " he recalls. "I told them, 'on desks around the world.' " The committee turned him down.

"I can't tell you how insulting it is to have someone from The Podunk Gazette tell someone who's written a jillion articles for The Wall Street Journal that he can't get his dogtags," Winkler says. "Still, that decision forced me to consider this whole question of respectability and credibility. Unless the stories we do show up in newspapers, they aren't going to take notice.

"It was exactly at that moment," Winkler continues, "that the people at The New York Times came to me asking for a Bloomberg terminal. 'We don't have money even for erasers around here,' they said, 'which means we can't pay for it.' As a businessman, I decided that if Bloomberg is perceived as credible, that credibility will help us sell more terminals." As soon as Bloomberg made its terminal available to the Times, other newspapers requested them. "We decided that if a paper had a certain circulation or was a flagship paper, we'd make it available to them, too," Winkler says. The company now has terminals at nearly 150 papers, which, as of July, will be paying only a minimal fee for installation and telephone service. Meanwhile, the New York Times Syndicate will soon include a selection of Bloomberg stories (not real-time data or charts and graphs) in its feed to some 600 newspapers.

Some critics have suggested that Bloomberg's lease-the-box system could become vulnerable to competitors who feed their data in through customers' own computers. But Michael Bloomberg has no intention of altering his delivery system, and he sees the newspaper distribution as a kind of advertising, a way to make Bloomberg a household name to his real market, which is the financial community. "The reason we have the news is to get people to lease our machine," he says. "The better the news, the more you'll need our terminal."

Bloomberg's rapid growth has extracted a certain price from its employees. "They've built a tremendous journalism organization in a very short term," Rothenberg says, "and they've done that by getting people to bust their asses in what is basically an electronic sweat shop. It's a brutal culture. Winkler is one of those guys who's up at 4:30 in the morning sending e-mail messages."

Although Bloomberg employees report that they are well paid, they are expected to toil long hours and to master a variety of tasks. Many are at their desks at 7:30 in the morning, hunched before their terminals in crowded, equipment-laden newsrooms. "A cross between a trading floor and a newsroom," is the way political analyst Kevin Phillips describes the Bloomberg newsroom at Fifty-ninth and Park in New York City. Reporters rarely leave their desks. They grimly joke about the "Bloomberg waistline," the result of the free Snapple, lunches, and snacks that are always available, enabling them, of course, to remain tied to their computers.

Winkler sets the type-A personality of the newsroom. "Matt Winkler is fond of the thirty-minute tirade," says Hal Davis, a former Bloomberg employee and now an associate editor at The National Law Journal. "He has the intensity of Steve Dunleavy [a legendary former New York Post editor], the charm of Lyndon LaRouche, and the personnel skills of Captain Queeg."

Davis, who worked at UPI and the New York Post before his stint at Bloomberg, walked away from the job after seven months. Although he says he found the work challenging, occasionally even exhilarating, he took issue with what he calls "the human cost of producing a great product. They've got a real problem there," he says. "They've got very young kids wearing bandages on their wrists," a possible sign of repetitive stress syndrome. "The kids don't complain, but their bodies do. They're grinding people into the ground.

"Bloomberg was like UPI at warp speed," Davis says. "I've always been a workaholic, but Bloomberg turned me into a recovering workaholic."

"Bloomberg is hell," says Barbara Garson, who wrote a book, The Electronic Sweatshop, that critiques the accelerating pace of work in companies that rely on "twentieth-century technology and nineteenth-century scientific management." (Twenty-first century technology, in Bloomberg's case). A Bloomberg newsroom, Garson says, offers the perfect recipe for repetitive stress injury. She bases her assessment on reports from both current and former employees. She also points out that with a real-time approach to news, reporters and editors don't have the peaks and valleys typical of news operations that get out various editions during the day. Real time means real stress, constantly.

Editor-in-chief Winkler not only takes issue with Garson's assessment of "real-time" dangers, but he says he's proud of presiding over a "sweatshop." "I'll take that epithet and wear it proudly," he says. "We're not for everybody, but we're building something here and we have to work like hell to do it."

He does concede that the company had a problem with repetitive stress injury, beginning in 1993 in Tokyo, but maintains that the company has been able to "contain" it with the aid of consultants. "Newsrooms were rearranged and new ergonomically correct furniture and equipment was installed," he says, including a voice-activated computer for an editor who showed symptoms of RSI. The snack bar, he says, was installed to induce people to take short breaks.

Michael Bloomberg, too, makes no apologies for "sweatshop" conditions. "We hire people who are workaholics," he says. "Anybody I've ever known who's accomplished anything works very hard.

"Our company is a meritocracy," he adds. "Our turnover in news is virtually zero. Most of our people seem very happy."

Many current employees confirm their boss's rosy assessment of company morale. They describe the opportunities they've been given to develop a range of skills, to hone their craft, and to work with the latest technology. "I've had to learn to do things that two or three years ago, I never thought I'd be doing this quickly," says one, political reporter John Wordock. He produces and hosts a Bloomberg radio show called "The Business of Politics."

Bloomberg also has an administrative editor in charge of learning. Based in the company's Princeton, New Jersey, bureau, Dave Wilson travels to other bureaus and holds clinics and classes on markets, securities, and municipal bonds.

Still, Esquire's Rothenberg says the range of employee quality at Bloomberg is "very vast, from the terrific to the very bad. I've never seen that kind of range in a news organization." A lack of exposure to journalism basics, an inability to construct a basic sentence, and a stylistic tin ear are the most obvious shortcomings, Rothenberg says. Rick Gladstone, deputy business editor for The Associated Press in New York City, says he sees similar problems. "Their writing is not all that strong," he says.

A business reporter at The Dallas Morning News, speaking on background, offers a similar assessment. The quality of Bloomberg's reporting varies, he says, and because its reporters file and update so often, the final product won't be as clean at the end of the day as, say AP. But "the Bloomberg" offers so much information -- everything from old press releases to SEC filings to company profiles -- that it's a valuable tool. "Of the three terminals I've worked with at the Morning News -- Dow Jones, Reuters, and Bloomberg -- Bloomberg is the last I'd want to give up," the reporter says.

According to Fred Eliason, assistant day editor in the business section of the Times, the historical data Bloomberg offers are extremely useful. "It gives you the possibility of looking at the stock-market history of individual companies, and you couldn't do that at all with the equipment we had. We had a Reuters quote machine, but it wasn't the latest generation. It's funny, but other news services have become much more interested in keeping us up to date on their equipment now that they see how much we're using the Bloomberg."

Late at night and on the weekend, says the Times's Josh Mills, many Bloomberg stories are rewrites, with due credit, of relatively innocuous stories culled from other papers. "It's sort of like all-news radio, with a compulsion to fill the airwaves with something, even though there's nothing new to report," he says.

Bloomberg's work ethic would seem to be a recipe for burnout and mistakes. And real-time mistakes can be extremely costly when the beat involves international financial transactions worth trillions of dollars. Lately, though, Bloomberg has avoided egregious errors. "At first they generated a significant number of corrections," Mills says. "We had a meeting with them, and I think the problem has evaporated. They're very accurate."

Winkler acknowledges that some of his younger reporters are, in essence, learning on the job, but he is also quick to point out that Bloomberg has had its share of successes recently. "We broke the Orange County bankruptcy story," he says. "We broke it by hours. We also explained it."

Winkler also is proud of a month-long investigation last year of a securities scam involving Banka Bohemia, the seventh largest bank in the Czech Republic. The bank, as Bloomberg reporters Rob Urban and Laura Zelenko discovered, had issued $1.2 billion worth of bogus securities, known as "prime bank guarantees." Among those who bought the securities was the National Council of Churches; the organization's health-insurance fund paid $7.9 million for prime bank guarantees with a face value of $8 million. They turned out to be worth nothing.

So what's in store for Bloomberg Business News?

 "We're growing," Winkler says. Bloomberg will soon be opening bureaus in Johannesburg and Beijing. It also has run large ads in The New York Times and other publications seeking reporters and editors. Whether the news service can hold on to its employees without moderating the stress is, of course, another question.

Meanwhile, the company is promoting itself like crazy, on the air, in print, and on billboards. Michael Bloomberg hinted last fall that he might go public with his company in the near future, but now he insists he has no such immediate plans. What excites him at the moment, he says, is Bloomberg's "audio/video on-demand stuff, which nobody is remotely close to. That's the journalism story of the future."

The Times's Fred Eliason predicts that other companies' technology will catch up to Bloomberg, that data that have been exclusively Bloomberg's will soon be available from other electronic sources. Michael Bloomberg, operating at the nexus of vast global information and fascinating, still-evolving technological toys, will no doubt respond to that development. Neither his ego nor his business acumen allows him any other choice.

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