One of the most successful limited partnerships in existence, Bloomberg L.P. bills itself as “the global business and financial information and news leader.” Bloomberg’s founder and former mayor of New York, Michael Bloomberg, owns 88% of the company’s stock, making him one of the dozen or so richest men on the planet. The privately-held company is believed to generate over $8 billion in annual revenue, the large majority of that courtesy of its Professional Services division, which began with the inescapable Bloomberg terminals. Obligatory for almost anyone with an occupation in finance, the terminals and their software-as-a-service successors offer comprehensive and vital information to 320,000 paying customers around the world.
While the bulk of Bloomberg's money comes from Professional Services, the company has several other subsidiaries, the most notable of which are its news-gathering operations. Investopedia readers, or at least those among you with cable or satellite, are probably familiar with Bloomberg Television. The 24-hour network is an anomaly in that it runs more live programming than competitors CNBC and Fox Business Network. Bloomberg Television also offers deeper analysis and less light entertainment than the other financial broadcasters, which often air infomercials, paid programming and repeat broadcasts throughout much of the day. Bloomberg Television also offers regional channels of international interest in the Philippines, India, Turkey Canada and other exotic destinations. (For more, see: The Bloomberg Terminal: Step By Step.)
Pay by the Month
Being a Bloomberg Professional Services customer isn’t for the penurious, not at $2,000 a month. That isn’t the company’s only subscription service, nor is it the most expensive. Bloomberg Law and Bloomberg Government sell specialized information for, you guessed it, lawyers and those who work in politics, respectively (sith a good degree of overlap, as you can imagine). The former service costs approximately $450 per subscriber per month, the latter $5,700.
Bloomberg Law opened for business in 2010, and its model is unusual in comparison to its established competitors such as LexisNexis. The former charges a flat monthly fee, rather than per use. Bloomberg Law subscribers can learn about breaking decisions, which judge owns how many shares of which publicly-traded company, the implications of the latest sections added to the existing ones of the Internal Revenue Code, and more. Yes, that information might be available to anyone willing to dig for it, but Bloomberg knows digging can be labor-intensive and daunting for its customers. (For more, see: Top Bloomberg Tools for Financial Analysis.)
For $5,700 a month, Bloomberg Government will tell you which bills are passing through which houses at what level at what time, and even when non-legislative regulations change. Care to know what happened during the Senate Appropriations Committee’s last meeting? Probably not, but if you do, Bloomberg Government will gladly give you access to a full transcript, from opening to adjournment. Rely on the Senate’s own devices to tell you which Senator stuck which foot in his or her mouth, and you could literally be waiting years. Bloomberg Government will tell you almost instantly. The inefficiency and sclerosis of the legislative process might be tiresome for ordinary voters, but it offers a market opportunity for Bloomberg.
Looking for the Next Big Thing
Finally, there’s Bloomberg Beta, the limited partnership’s venture capital firm. Appropriately ensconced in Silicon Valley, the $75 million fund has put its money into some startups that have become famous, such as Codeacademy, the online programming tutorial warehouse that claims 24 million users. Other Bloomberg Beta investments, such as Newsle (a news service that delivers stories about one’s favorite personal contacts) don’t appear to have quite as broad an appeal, but Newsle did sell to LinkedIn Corp. for an undisclosed amount in 2014. The service has since been either been shuttered or absorbed into LinkedIn.com, it’s hard to tell. Either way, the deal appears to have been profitable for Bloomberg Beta. The venture capital arm’s current investments include Textio, goTenna, Alation, Adatao.
According to Bloomberg Beta’s own manual, made available to whomever wants to read it, venture capital operations offer a relatively inexpensive way for Bloomberg to detect startup trends before they become too well-publicized (i.e., expensive). Bloomberg Beta was created to stand on its own merits and turn a profit rather than be bankrolled by the existing Bloomberg businesses.
Bloomberg also operates a handful of other, smaller concerns, such as its enterprise data management division, PolarLake, which manages and interprets complex data sets for clients both large and small, saving them money and time. There’s also Bloomberg View, the editorial counterpart to Bloomberg’s news service. Bloomberg View has a roster of renowned columnists (Megan McArdle, Ramesh Ponnuru) whose work is syndicated in various print publications and online. Again, all this is minor compared to the billions upon billions brought in by Bloomberg Professional Services. Bloomberg is under no obligation to disclose which of its departments make how much money, but any observer can calculate just how much the company’s biggest division earns relative to the other divisions. (For more, see: MarketWatch Versus Bloomberg: A Comparison.)
Throughout its history, Bloomberg has been in the position of either brash new competitor or individual player with a market unto itself. Rarely has it been the legacy company facing off against young and nimble competitors, at least not until the advent of Symphony, the Alphabet Inc. backed company that threatens to eat into Bloomberg’s large profits. (For more, see: How Symphony Plans to Take on Bloomberg.)
But Bloomberg is still the go-to service for hundreds of thousands of financial professionals who swear by its ease of use and reliability. Enough to justify Bloomberg’s high price tags. Even the infamous 2013 privacy breach, which inadvertently or otherwise allowed company reporters access to customers’ personal information, was but a temporary blip. Somehow Bloomberg came out of the scandal without sustaining any long-term damage.
The Bottom Line
Even in a century where information has been democratized and can be shared across the world instantly, some pieces of data are harder to find, or harder to have categorized and presented in an easily accessible fashion, than others. Bloomberg takes the painstaking and occasionally mind-numbing work of gathering arcane legal, governmental, financial and other data and organizing it so clients don’t have to do much beyond studying it themselves. For one of the pioneering companies in financial and other professional data, that service continues to be worth billions.
(For related reading, see: Financial News Comparison: Bloomberg vs. Reuters.)