Telerate

Telerate was a United States financial-information company that helped establish the market for electronically distributed, real-time financial data. Founded in 1969 by Neil Hirsch with venture capital, the business adapted technologies originally used to display live equity quotations to other parts of the financial industry, particularly government securities, corporate debt, foreign exchange, interest rates, and commodities. Its terminals supplied prices and related market information to brokers, banks, traders, and other professional participants. The company grew rapidly during the 1970s because its service offered timely pricing at comparatively low cost. By the middle of that decade, Telerate had achieved a particularly strong position in information on U.S. Treasury bonds, and it became an important alternative to established quotation and news services. Cantor Fitzgerald became an influential early investor and used Telerate to distribute its own trading prices, a move that generated controversy among customers who believed the service should remain more independent. Telerate was profitable by 1977 and had expanded beyond the United States through international partnerships and distribution arrangements. Telerate’s development was closely connected with Dow Jones & Company and the Associated Press. In 1977 the companies formed AP-Dow Jones, and in the early 1980s Telerate created an international subsidiary in which it held a substantial interest alongside those partners. Dow Jones later acquired a controlling interest through a series of investments beginning in 1985. The companies sought to build an integrated electronic information service capable of competing with Reuters, whose international financial-data network was then the leading rival. Telerate introduced new software and terminal products, including the Matrix system, while Dow Jones worked to combine Telerate’s distribution technology with its own news and quotation assets. The company’s competitive position weakened in the 1980s and 1990s. Telerate and Reuters concentrated heavily on delivering current prices, while the newer Bloomberg service gained customers with a broader combination of historical data, analytics, portfolio tools, messaging, and workflow functions. Internal priorities at Dow Jones shifted, and Telerate was increasingly integrated with Dow Jones Newswires rather than developed as a fully independent technology platform. The business also experienced cultural and management tensions after becoming part of the more conservative Dow Jones organization. In 1998 Dow Jones sold the troubled business to Bridge Information Systems for approximately $510 million. It was renamed Bridge Telerate. Bridge subsequently entered bankruptcy proceedings, and in 2001 MoneyLine Network acquired the business for approximately $10 million, after which it operated as MoneyLine Telerate. MoneyLine relied on transitional arrangements with Reuters for data aggregation and on SAVVIS for network services. The relationship with Reuters became contentious, including a 2003 dispute over threatened termination of data feeds. By 2005, the business was no longer publicly traded and was majority-owned by One Equity Partners, the private-equity arm of JPMorgan Chase. One Equity Partners sold the remaining MoneyLine Telerate business to Reuters in June 2005 for approximately $175 million. Reuters absorbed the operations into its market-data unit, effectively ending Telerate as an independent brand. The acquisition also caused some customer dissatisfaction because clients who had chosen Telerate as an alternative to Reuters did not necessarily want their services moved under Reuters ownership, and some had received commercial terms that Reuters was unwilling to renew.

Telerate was founded in 1969 by Neil Hirsch, who had previously worked at Merrill Lynch. The initial business used venture capital to develop an electronic method for distributing live financial quotations. Rather than limiting the technology to listed-equity prices, Telerate applied it to markets such as government securities, commercial paper, corporate bonds, currencies, interest rates, and commodities. The service expanded quickly during the 1970s. Cantor Fitzgerald became an important investor, and Telerate’s distribution of broker quotations helped it build a strong position in fixed-income information. That arrangement also caused customer criticism because Cantor Fitzgerald used the platform to promote its own prices. By the middle of the decade, Telerate was a major source of U.S. Treasury-bond pricing, and it reported a profit in 1977. In the same year, Telerate joined Associated Press and Dow Jones in the AP-Dow Jones venture, linking its electronic distribution system with established news and financial-information organizations. Telerate expanded internationally in the early 1980s, but Reuters remained the dominant international competitor. Cantor Fitzgerald sold a large stake to Exco International in 1981. The company had thousands of terminals in North America and additional installations across numerous countries. After Telerate’s 1983 public offering, its international activities were organized through AP-Dow Jones Telerate, with ownership shared among Telerate, Associated Press, and Dow Jones. Dow Jones began acquiring a substantial interest in 1985 and ultimately became the controlling shareholder through further investment in 1987 and 1988. The strategic objective was to challenge Reuters with a combined service delivering market data, news, and quotations through electronic terminals. Telerate developed products such as Telerate II and Matrix in response to competition from Reuters terminal systems. However, both Reuters and Dow Jones Telerate were vulnerable to Bloomberg, which offered a more integrated platform containing historical data, analytics, messaging, and portfolio-management tools. Telerate was gradually marginalized inside Dow Jones and its services were increasingly combined with Dow Jones Newswires. Dow Jones sold the business to Bridge Information Systems in 1998. Bridge renamed it Bridge Telerate, but Bridge later entered bankruptcy proceedings. MoneyLine Network acquired the operation in 2001 for a substantially lower price and renamed it MoneyLine Telerate. The new owner made transitional arrangements with Reuters for data aggregation and with SAVVIS for network connectivity. These arrangements became the subject of a serious dispute in 2003 when Reuters threatened to cut Telerate’s data feeds. By 2005 the business was no longer publicly traded and was majority-owned by One Equity Partners. In June 2005, One Equity Partners sold the remaining MoneyLine Telerate operations to Reuters. Reuters integrated the assets into its own market-data business, ending the independent Telerate brand. The acquisition marked the final stage of a company that had pioneered electronic distribution of real-time fixed-income and broader financial-market information but had lost ground as the market shifted toward richer analytical and workflow platforms.

• 2005

  Reuters absorbs Telerate

  [1]Telerateen.wikipedia.org

  Reuters acquired the remaining operation and integrated it into its market-data unit.

• 2001

  MoneyLine Telerate is created

  [1]Telerateen.wikipedia.org

  MoneyLine Network acquired the business from Bridge bankruptcy proceedings and renamed it MoneyLine Telerate.

• 1998

  Sale to Bridge Information Systems

  [1]Telerateen.wikipedia.org

  Dow Jones sold Telerate to Bridge Information Systems, which renamed the business Bridge Telerate.

• 1988

  Dow Jones becomes controlling shareholder

  [1]Telerateen.wikipedia.org

  Further investment increased Dow Jones’s ownership to a controlling level.

• 1985

  Dow Jones begins major investment

  [1]Telerateen.wikipedia.org

  Dow Jones acquired a substantial interest in Telerate as part of its effort to compete with Reuters.

• 1981

  Exco International acquires Cantor Fitzgerald’s stake

  [1]Telerateen.wikipedia.org

  A large Cantor Fitzgerald holding was sold to British investment group Exco International.

• 1977

  AP-Dow Jones venture is formed

  [1]Telerateen.wikipedia.org

  Telerate entered an alliance with Associated Press and Dow Jones to create AP-Dow Jones.

• 1972

  Cantor Fitzgerald takes an equity interest

  [1]Telerateen.wikipedia.org

  Cantor Fitzgerald acquired a significant stake and became an important early backer of the company.

• 1969

  Telerate is founded

  [1]Telerateen.wikipedia.org

  Neil Hirsch founded Telerate to distribute live financial-market information electronically.

A professional market-data provider positioned as an electronic alternative to traditional financial quotation services and, later, as a competitor to Reuters and Bloomberg.

• Financial-market data terminals

  Telerate terminals

  Professional electronic terminals that delivered real-time market information to financial institutions and traders. The service was especially associated with government-bond, commercial-paper, and other fixed-income quotations, while also covering currencies, interest rates, and commodities.

• Financial-market data software

  Telerate Matrix

  A later-generation Telerate system developed as the company responded to Reuters terminal products. It formed part of the effort to modernize Telerate’s interface and electronic information offering during the competition among Reuters, Dow Jones Telerate, and Bloomberg.

• Market-data service · 1998

  Bridge Telerate

  The name used for Telerate’s market-data business after Bridge Information Systems acquired it from Dow Jones in 1998. The service continued to provide professional financial information before Bridge’s bankruptcy and the subsequent MoneyLine acquisition.

• Market-data service · 2001

  MoneyLine Telerate

  The successor service operated by MoneyLine Network after its 2001 acquisition of Bridge Telerate. It relied on transitional Reuters data arrangements and third-party network infrastructure before being sold to Reuters in 2005.

• 1970

  Controversy over broker price promotion

  Cantor Fitzgerald used Telerate to advertise and distribute its own trading prices. The practice attracted criticism from several major customers, who objected to the potential conflict between a market-data platform and an investor’s proprietary price promotion.

  Source

Read more

• 2005

  Sell the remaining business to ReutersM&A

  Background

  The Telerate operation had declined and was majority-owned by One Equity Partners after it ceased to be publicly traded.

  Action taken

  One Equity Partners sold the remaining MoneyLine Telerate business to Reuters, which absorbed it into its market-data unit.

  Aftermath

  The independent Telerate brand ended. Some customers were dissatisfied because they had selected Telerate as an alternative to Reuters and did not want their services transferred under Reuters ownership.

  Acquisition price. Approximately $175 million (June 2005)

  Source

• 2001

  Transfer the business to MoneyLine NetworkM&A

  Background

  Bridge Information Systems entered bankruptcy proceedings, putting its Telerate operations at risk.

  Action taken

  MoneyLine Network acquired the business and renamed it MoneyLine Telerate, while arranging transitional data and network agreements.

  Aftermath

  The service continued temporarily, but operational dependence on Reuters contributed to later commercial tension and did not reverse the business’s decline.

  Acquisition price. $10 million (2001)

  Source

• 1998

  Sell Telerate to Bridge Information SystemsM&A

  Background

  Dow Jones viewed Telerate as increasingly difficult to operate against Reuters and Bloomberg, particularly because the service lacked some historical-data and analytical capabilities.

  Action taken

  Dow Jones sold the business to Bridge Information Systems, which relaunched it as Bridge Telerate.

  Aftermath

  The brand continued under new ownership but was later transferred to MoneyLine Network after Bridge entered bankruptcy proceedings.

  Acquisition price. $510 million (1998)

  Source

• 1985

  Dow Jones acquires a major stakeM&A

  Background

  Reuters was the leading international competitor, and Dow Jones sought a stronger electronic platform for combining market information with financial news.

  Action taken

  Dow Jones purchased a substantial interest in Telerate and increased its ownership through additional investments over the following years.

  Aftermath

  Dow Jones gained control, but the combined business did not overcome the competitive advantages of Reuters and the emerging Bloomberg platform.

  Purchase price for initial 32% stake. $285 million (1985)

  • Reuters — Reuters remained the dominant rival and continued competing through its international financial-information network.
  • Bloomberg — Bloomberg gained market share by offering broader historical data, analytics, messaging, and portfolio tools.

  Source

• 1977

  Expand electronic data distribution beyond equitiesStrategy

  Background

  Traditional quotation technology had been associated mainly with live stock prices, while professional participants in fixed-income and other markets also needed timely electronic information.

  Action taken

  Telerate applied its distribution technology to government bonds, commercial paper, corporate debt, currencies, interest rates, and commodities, strengthening its fixed-income specialization.

  Aftermath

  The strategy helped Telerate become an important provider of U.S. Treasury-bond information and supported expansion during the 1970s.

  Source

1. 1Telerateen.wikipedia.org