Bloomberg takes on Reuters in supply of data feed to City

Bloomberg, the financial information provider, is poised to challenge its rival Reuters in a new market sector - that of supplying data feeds to financial institutions. Up to now, Reuters has dominated the data-feed market.

Bloomberg, the financial information provider, is poised to challenge its rival Reuters in a new market sector - that of supplying data feeds to financial institutions. Up to now, Reuters has dominated the data-feed market.

Strong and well-sourced of the move overshadowed positive trading news from Reuters yesterday. The company said May had been the first month since May 2001 when sales exceeded cancellations.

Bloomberg has eaten savagely into Reuters' high-end terminals business over the past two decades. The possibility that Bloomberg may launch yet another attack on a new Reuters market caused concern in the City. There was speculation that the move, which was not confirmed by Bloomberg, could presage Bloomberg's entry into other Reuters markets.

A research note from Goldman Sachs said: "The fear is that a data feed would represent the first step in Bloomberg unbundling its product and potentially delivering a mid-tier offering.... In essence, the threat is that Bloomberg abandons its current closed system and adopts Reuters' strategy of an open technology offering."

Although the broker concluded this was unlikely, other analysts said Bloomberg was likely to hit back. Simon Baker, at SG Securities, said Reuters was at last demonstrating that it was winning the battle with Bloomberg for customers.

Up to now, Bloomberg's success has been based on offering a single product, aimed at the top of the financial information market. Its systems are based on "closed" technology, meaning that Bloomberg content cannot be integrated with the other information and technology at a client's site.

Reuters offers different products at distinct price points, with its main rival in the mid-tier market, for instance, currently being Thomson.

According to the speculation, Bloomberg will launch an equity data-feed in September, followed by fixed income in 2005.

Data feeds account for 7 per cent of Reuters' revenues with a further 7 per cent provided by the related data distribution products - the technology to deal with the data once it is inside a client's systems.