Today is a day when all of us in b-to-b journalism should pause, look at the news in our industry, and ponder what it means for each of us, because it doesn’t get any bigger than this: Bloomberg LP is restructuring.
Bloomberg is arguably the smartest and most profitable news operation in history. It is certainly the biggest money-making operation in the history of b-to-b. (Now that Reuters and Thomson have merged, Bloomberg may or may not be the biggest player in business journalism—depends on how you measure things.)
So what does it mean when the best of the best in our industry decides to restructure? Why would it do so? Can other companies extract a lesson?
First, let’s look at what is happening.
In essence, Bloomberg News is separating its multimedia operation (which includes the Web, television and radio units) from its text operation (the news and data service that is delivered to Wall Street via dedicated terminals. This same unit will continue to rewrite terminal news for publication in client newspapers. The company’s print magazine will also reside in the new text division.)
In addition, the parent company, Bloomberg LP, is splitting into three units—news, data and financial products. (This part of the revamp is even more complicated than it would first appear. The financial products unit will include "data" products such as the trading systems and analytics tools. Whereas the data unit will house the company’s databases and its law unit.)
It’s also worth noting that the restructuring is not related to any financial difficulties at the company. No layoffs are planned. The company continues to be a cash-producing machine.
Second, let’s look at the why.
Rafat at PaidContent says the restructuring sounds like Bloomberg is planning a spinoff or sale of the multimedia unit.
I agree. Particularly since the restructuring comes amid rumors on Wall Street that Merrill Lynch, reeling from the credit crisis, is looking to sell its 20% stake in Bloomberg. (The most likely buyer is the trust of New York mayor and company founder Mike Bloomberg. Value of the stake is somewhere in the neighborhood of $5 billion.)
It’s also worth noting that although Bloomberg continues to print money, the company’s core audience of Wall Street bigwigs and traders is hurting. Sales are likely to have declined in recent months. And it would take a very optimistic person indeed to suggest sales will rise in the near term.
Third, let’s look at other details.
Under the new structure, Matt Winkler, who has run Bloomberg’s news operations since the beginning, will lose control of the multimedia operation. Winkler will maintain control of the text unit.
Bloomberg is also launching an incubator unit, dubbed Bloomberg Ventures, which will presumably look for new opportunities and acquisitions. It will be run by Lex Fenwick, the company’s former CEO.
Portfolio suggests that the reorg may mean that Bloomberg’s "famously bizarre corporate culture (is) being slowly dismantled." Certainly I hope that is true. Bloomberg is, by far, the least pleasant place I have ever worked. More importantly, it was a place where truly bizarre personalities tended to thrive. The Portfolio piece says that Bloomberg’s new president, Dan Doctoroff, had come to realize that, in the words of a company insider, "Matt Winkler’s reign of terror and crazy little rules" were hurting the organization.
But here’s the part that intrigues me:
The restructuring will create two, distinct groups of journalists in the company. One team will be dedicated to print and the terminals. It will report to Winkler. The second team will be dedicated to multimedia and the Web. The company is searching for someone to run that team.
But I have to ask: why the split? and why now?
Bloomberg’s move comes as the rest of the industry—both b-to-b and b-to-c—struggles to merge print, Web and television operations. Everyone from the Washington Post to Hanley-Wood is looking to create some form of Web-first publishing in which journalists are able to produce news for any medium.
But Bloomberg seems to be moving in a different direction. Perhaps this is nothing more than a convoluted way to dilute Winkler’s power without hurting the core product—terminal sales. Or, perhaps, it is nothing more than a way to create two, state-of-the-art news organizations in anticipation of selling one of them. Or, perhaps, Bloomberg has a very different idea of what it will take to run a news company and make money in the future.