Peter Job: Reuters Jumps Into The NetStanley Reed
After some years of dithering about the Internet, information giant Reuters Group is taking the plunge. CEO Peter Job said on Feb. 8 that the London-based company will spend $800 million over the next three years to make itself a financial portal for retail investors and put its news and securities quotes online.
The market loved the Net plan. Reuters' stock, which has gyrated of late, closed in the U.S. at 132 on Feb. 9, up 33% in two days. Investors also applauded Reuters' decision to float its successful Net startup fund. An initial public offering of its electronic trading unit, Instinet, is also possible.
But whether Reuters has found a cure for its single-digit growth remains to be seen. The Net will help it tap a bigger market, but online prices for its products inevitably will be far lower. The trick will be gaining enough volume to make up for the difference. Meanwhile, Instinet's commissions already are being squeezed by rivals, and foreign-exchange trading has fallen, thanks to the introduction of the euro.
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