Reuters Group (RTRSY), soon to be acquired by Thomson Corp (TOC), has displaced Bloomberg LP and will now be providing content to the International Herald Tribune, also now owned by New York Times (NYSE:NYT). The deal is interesting because the revenue model calls for Reuters to participate in advertising revenues that the business news section of IHP generates. Before, Bloomberg just received a syndication fee and cashed their cheques.
Reuters and IHP/NYT all compete with Dow Jones/WSJ and News Corp (NASDAQ:NWS) so there is a certain alignment of battle order as troops are moved around the competitive landscape. What is interesting is that Bloomberg has allowed itself to be replaced. Did Bloomberg not believe in IHP's ability to generate ad revenues? Is Bloomberg news that different than Reuters news, in the IHP context? We are talking headlines and the first few paragraphs of the real story.
This is a fairly nice place for NYT to experiment with the model and develop a savvy, if there is one to be developed. Does NYT not have their own business news division? I know, I know, not all news gathering services are the same and there is a certain amount of under coverage in one area that another service may be well positioned to cover off.
I am not convinced that the Reuters contribution will have a measurable impact on IHP. There was some smoke obscured commentary about still relying on their own staff and writing the same amount of stories. But its all about "Follow the Money" and no information was released about the money. So how does the business reader follow the story?