Reuters Group PLC

I

Introduction

Reuters Group PLC, one of the world’s largest suppliers of news and financial information. Through its worldwide network of about 2,000 journalists, Reuters provides news stories, photographs, graphics, and video footage to newspapers, television broadcasters, Internet sites, and other media. Although best known to the public as a news agency, Reuters earns the vast majority of its revenues by electronically transmitting financial market data—such as currency exchange rates, stock prices, and commodity prices—to bankers, traders, brokers, investors, and corporations all over the world. The data are constantly updated as financial markets change. Reuters also sells software that allows traders to analyze financial data and to make transactions directly from a computer terminal. The company has headquarters in London, England.

II

Early History

Reuters was founded by Paul Julius Reuter, a former bookseller from Germany. In 1849 Reuter started an independent news agency in Paris, but it failed after several months. The following year he decided to exploit a gap in telegraph service from Paris, France, and Berlin, Germany. He began using carrier pigeons to fly news about European stock prices between Aachen, Germany, where the German telegraph line ended, and Brussels, Belgium, where the Belgian line began. In 1851 Reuter immigrated to London, which was emerging as a hub in the global telegraphic network. There he set up a telegraph agency in an office near the London Stock Exchange. Initially he provided brokers in London and Paris with opening and closing stock prices, but he soon expanded the service to include general news dispatches.

By the late 1850s Reuter had established offices throughout Europe and was supplying news to major newspapers, including the London Times. In 1865 he incorporated the business as Reuter’s Telegram Company. The company expanded beyond Europe as the British Empire extended telegraphic cable to the Middle East, India, China, Australia, and Africa. The transmission of private telegrams within the empire became an important source of revenue for Reuter’s company.

Reuter retired in 1878 and passed control of the company to his son, Herbert. In 1916 Roderick Jones, manager of the company’s South African news operation, became executive head and part owner of the company and changed its name to Reuters Ltd. In the 1920s Reuters began using teleprinters (see Telegraph: Teleprinting) to distribute news to London newspapers and radios to transmit news to Europe.

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In 1941 Jones was ousted by the Press Association, an association of British newspapers that had become the majority shareholder of Reuters in 1925. Jones had been knighted for his service as head of the British Department of Propaganda during World War I (1914-1918), and the Press Association believed that Jones’s close ties to the British government had compromised Reuters’s independence as a news agency. The Press Association protected editorial independence by establishing a share structure designed to prevent any one individual or interest from gaining control of the company.

III

Expanding Services

Following World War II (1939-1945), Reuters faced growing competition from American news agencies, such as the Associated Press and United Press International. In response, it expanded its financial-information services. In 1964 Reuters introduced Stockmaster, a system that allowed users to view stock prices from around the world on a computer screen. In the following years the company continued to add leading-edge information technology services. The Reuters Monitor, introduced in 1973, displayed currency exchange rates on computer monitors in real time—that is, reflecting market conditions at any given moment. The Reuters Monitor Dealing service, launched in 1981, allowed foreign currency traders to carry out transactions directly from their computer terminals. Profits rose from £51,000 ($143,000) in 1963 to £16 million ($32 million) in 1981. By 1989 profits reached £284 million ($422 million).

In the 1990s Reuters continued to develop information systems, including multimedia and online services. It built Reuters Television (formerly Visnews) into a leading international TV news agency that provides news, sports, business, and entertainment video footage via satellite to broadcasters in more than 90 countries. In 1994 Reuters bought Quotron, a stock quote service, from consumer banking company Citicorp. The company debuted its Reuters Markets Service 3000, which offers specialized financial information, in 1996.

In 1999 Reuters joined forces with longtime rival Dow Jones & Company to combine their online news databases. The Dow Jones Reuters Business Interactive (later renamed Factiva) offers historical news from the Wall Street Journal, news from the Dow Jones and Reuters news wires, and information from more than 7,000 global business news sources.

See also Press Associations and Press Agencies; Journalism.

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