Careers at Bloomberg
Bloomberg’s mission is to help individuals, enterprises, and governments make smarter, faster, more profitable decisions.
After graduating from Harvard University with an MBA in 1966, Michael Bloomberg joined securities trading firm Salomon Brothers as a security counting clerk. By the late 1970s he led development of the company’s in-house computerized financial system, and became a general partner. In 1981 Salomon merged with Philbro Corporation, resulting in his firing and a payout of $10 million.
Michael decided to start his own business, and drew on his computer experience and finance market background for inspiration. He wanted to build a computerized information system that would provide real-time market data, financial calculations, and other analytics to Wall Street firms. He used his money to gather three programmers to assist him with the effort: Tom Secunda, Duncan MacMillan, and Chuck Zegar. In 1982 they launched Innovative Marketing Systems (IMS).
Initially, Merrill Lynch was the only company interested in the endeavor. Following a demonstration, it ordered 20 machines; however, it made Michael promise not to market the offering to its competitors for the next five years. Michael agreed, and Merrill Lynch purchased a 30% stake in IMS for $30 million. Michael then focused on growing the system’s capabilities.
By 1984 he was selling IMS’s all-in-one terminals to Merrill Lynch’s clients and introduced a portable version. However, he wanted to see how it would perform in a broader context and requested that Merrill Lynch release IMS from its contract. Realizing it could make money through its stake, the company agreed. Michael targeted new clients, and the service was a big success. Customers liked how the system provided centralized access to multiple information sources, offering as many as 40 links to details on any bond. They also appreciated its ability to conduct complex analytics.
In 1986 Michael changed his firm’s name to Bloomberg and expanded his client base from “buy-side” companies (mutual funds, pension funds, insurers, etc.) to “sell-side” ones (trading firms and security underwriters). In 1988 he incorporated a securities trading feature into the system, and in 1989 he added a contributor system feature for financial commentary and research. Over the next decade, the company completed numerous acquisitions that helped fuel its growth. By 1997, it was being used by 70 news bureaus and was valued at $2 billion. By 2008, that figure grew to $22.5 billion.
Business model of Bloomberg
Bloomberg has a niche market business model, serving a specialized customer segment. Its customer base primarily consists of organizations in the financial and information industry that seek real-time data, analytics, and/or news updates. Clients include securities brokerage firms, banks, government agencies, and media companies. Specific clients include the Federal Reserve and the World Bank.
Bloomberg offers four primary value propositions: accessibility, convenience, innovation and brand/status.
The company creates accessibility by making its service easily available to interested parties. Its business stories are published in five languages and its terminals are available in standalone, portable, and “open” (PC-connectible) formats.
The company offers convenience by compiling information from multiple sources in an individual channel. This information includes multimedia news, financial pricing, electronic communications, and specialized financial computation services.
The company is known for its innovation efforts. It operates Bloomberg Labs, a website focused on enabling an exchange of ideas between academics, technologists, and the worldwide developer community. This discussion often leads to collaborative efforts in the building of new solutions.
The company has developed a strong brand. It was one of the earliest computerized information service providers, so it is well-established. It now maintains one of the world’s largest private cloud networks, connecting over 327,000 users in more than 180 countries. Lastly, it hires more than 500 journalists in over 150 bureaus in over 73 countries who publish over 5,000 business stories daily.
Bloomberg’s main channel is its direct sales team, through which it acquires most customers. The company promotes its offering through its website and social media pages.
Bloomberg’s customer relationship is primarily of a self-service, automated nature. Customers utilize the service through the main platform while having limited interaction with employees. The company’s website features the “Bloomberg Customer Service Center“, which enables customers to create a personal account through which they can manage their contracts, order new services, and receive important notifications. The site also includes documentation in the form of specs and guides and provides answers to frequently asked questions.
Despite this orientation, there is also a strong personal assistance component in the form of phone and live chat support. Service is proactive, with staff members not only addressing problems but also seeking customer feedback in order to implement long-term improvements.
Bloomberg’s business model entails maintaining a robust platform for over 327,000 users.
Bloomberg maintains the Enterprise Solutions Partner program. Through the initiative, the company works with financial software and technology providers to develop innovations that can benefit the global financial services community. Partners are assigned a relationship manager who trains them on the use of Bloomberg’s tools. Afterwards, they use their knowlege to integrate its data into their applications. They then receive marketing and communications support. Specific partners include Advent Software, Citigroup, Gravitas, MDX Technology, ORC Group, and Palantir Technologies.
Bloomberg’s main resource is its proprietary software platform. The company’s important human resources include its staff of over 3,000 technology and design professionals (including infrastructure architects, software engineers, and data collectors) and its sales/customer service staff.
Bloomberg has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver is likely research and development, a fixed cost. Other major drivers are in the areas of customer support/operations and administration.
Bloomberg has one revenue stream: subscription fees for access to its database. While the company does not publicize its pricing, a variety of sources estimate it to be as follows:
- $24,000 a year for a single terminal subscription
- $20,000 a year for customers with two or more subscriptions (e.g., large banks than can have hundreds of terminals)
- $2,000 a month for single-terminal subscribers with two-year contracts
info: Michael earned a Bachelor’s degree in Engineering from Johns Hopkins University and an MBA from Harvard University. He previously acted as a General Partner at Salomon Brothers. He also served as Mayor of New York City for three terms.
info: Thomas earned Bachelor's and Master's degrees in Mathematics from Binghamton University. He previously worked in systems research at Salomon Brothers. He oversees all R&D efforts at Bloomberg.
info: Elizabeth earned a Bachelor’s degree from Villanova University. She previously served as the Head of Data Products, Business Manager of Global Data, and Business Manager of Trading Solutions at Bloomberg, as well as as Director of Bloomberg BNA.
info: Paul earned a B.S. in Business Communication at Indiana University. He previously served as the Chief Executive Officer of Westwood One and as an Executive Vice President and Chief Revenue Officer at Time Inc.
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