September 13, 2010

Reuters

Thomson Reuters to launch next generation desktop

• Eikon biggest part of $1 billion investment in products

• Allows for web-style searches with social media

• Available on devices including iPhone, BlackBerry

Thomson Reuters Corp will roll out on Tuesday its next-generation desktop product for financial professionals, incorporating Twitter-like social media features that it hopes will help it win customers from Bloomberg LP and others.

Thomson Reuters Eikon will knit together dozens of disparate products that provide data, news, analytics and trading tools, as well as social media applications familiar to users of Twitter, instant messaging and Facebook.

Eikon accounts for the biggest part of a $1 billion investment in new financial products that includes video news service Reuters Insider and data network Elektron.
Along with improved search, customers will also be able to access Eikon on devices such as Apple Inc's iPhone and Research in Motion Ltd's BlackBerry.

"What we are trying to do is take the best learning from the consumer media world and apply that to professional tools," said Devin Wenig, CEO of the company's Markets division, which sells to financial institutions.

"Our clients say 'you've got great stuff but we can't get at it because it's in too many places.' And they say the whole industry is looking a little tired and it's time for a refresh," Wenig said in an interview.

The new desktop is designed to be more cost-effective for the company and will provide better service to customers because it is easier to install and provide upgrades, he said.

"Eikon really simplified the plumbing issues," said Doug Steiner, a consultant to investment bank Scotia Capital, one of 1,000 clients that took part in beta testing the product.

Wenig declined to give revenue or installation projections.

Thomson Reuters will continue to support existing products but expects clients to take up Eikon quickly, Wenig said. Clients can migrate at no extra cost unless they upgrade.

Slight Lead
Thomson Reuters maintained a slight lead in the markets segment over main competitor Bloomberg in 2009, with a 33 percent market share and sector revenue of $7.5 billion, compared with Bloomberg's 28 percent and revenue of $6.2 billion, according to consultant Burton-Taylor International Consulting.

Thomson Reuters has close to 500,000 users, almost half of them premium subscribers. Bloomberg says it has about 288,000.

Bloomberg launched an upgraded version of its desktop in the summer, offering user-friendly features such as more intuitive search. Bloomberg is known for its grip on clients particular market segments addicted to its messaging system.

Thomson Reuters is betting that updated features allowing users to comment, chat and email charts, stories and other data will counter Bloomberg's messaging.
While the new social media features are attractive, it remains to be seen how many clients will adopt them, said Claudio Aspesi, an analyst with Sanford C. Bernstein.

Bloomberg's community of users gives it an edge in some areas including fixed income and equity trading, he said.

"It tends to be extremely sticky," he added.

"How do you switch a community of users to move from one set of tools to another set of tools? There is no incentive for anyone to defect from Bloomberg," Aspesi said.

Larry Tabb, CEO of the financial market research and advisory firm Tabb Group, also noted that it takes time to steal share in the desktop services sector because clients are typically tied to two-year contracts. "I think it will take a couple of years to play out," he said.

A Bloomberg spokeswoman declined to comment on competition matters.

Thomson Reuters reported lower-than-expected second-quarter quarterly results, partly because investment in new products reduced its operating profit margin to 20.4 percent from 24.2 percent a year earlier.

Thomson Reuters also has a Professional division, which provides databases and other information reservoirs to lawyers, accountants, scientists and healthcare workers.
by Jennifer Saba