Bloomberg

Bloomberg, which declined to comment for this article, is a privately held company: the man whose name is on the door owns about 90 per cent of it. It was set up to deliver markets data to customers in financial institutions, who pay handsomely (up to $24,000 a year) for Bloomberg’s distinctive terminals. In 1990, the editorial side of the business, which now employs more than 2,400 people, was created to give terminal subscribers up-to-date news.

Michael Bloomberg made his first fortune as an equities trader and partner of Salomon Brothers, picking up a $10m windfall when the firm was sold in 1981. He immediately ploughed some of the proceeds into a new business venture — “a company that would help financial organisations,” he wrote in his 1997 autobiography Bloomberg by Bloomberg. The idea, he explained, was to collate market data and provide computer software “that would let non-mathematicians do analysis on that information”. This service would eventually come wrapped in a box with a screen: the Bloomberg terminal.

The terminal has become an essential cog in the engine that drives the financial system, with sales generating 80 per cent of Bloomberg revenues, which were an estimated $8.5bn in 2014, according to Douglas Taylor, founding partner of Burton-Taylor International Consulting. No surprise, then, that at the company’s Manhattan headquarters on Lexington Avenue, the terminal is viewed with near reverence. A glass-walled display charts the evolution of the devices from chunky 1980s original to the sleeker, matte models of 2015.

Today, the company accounts for 32 per cent of the global market in financial data and information. But its biggest customers — Wall Street’s leading investment banks — are grappling with tougher regulatory requirements introduced since the 2008 financial crisis, which have eaten into their profits. These banks want to cut costs where they can: several banking sources told the FT that their institutions were actively reducing the numbers of installed Bloomberg terminals and moving staff to cheaper alternatives.

Morgan Downey, formerly an oil trader and global head of commodities at Bloomberg, launched one such alternative last year. He describes Money.net, a browser-based tool (costing a flat $95 per month), as offering everything and more that Bloomberg does through its terminal.

Downey believes the $30bn financial-data industry — twice the size of the global music business — is at a similar stage to the US airline sector in the early 1980s, when the cost of flying economy from New York to Los Angeles dropped about 90 per cent thanks to a new generation of carriers. Similar price falls in Bloomberg’s core market are inevitable, he says, blaming the high cost of a terminal subscription on the company’s “silly spending” on other services, such as its business-news television network and radio station. “The terminal is the only thing that has worked,” he says. “Is it a good product? Yeah, it’s OK. But is it worth $24,000 a year? Heck no.”

With US competitors undercutting it at home, Bloomberg has looked elsewhere for growth. The number of global users stands at about 326,000 around the world, according to a spokesperson, and should end this year about 4,000 up on the year before, as the company pushes more deeply into newer markets in Asia and Africa.

The move stunned Bloomberg journalists. With his floppy hair and quietly spoken manner, Micklethwait did not resemble the warrior required to shake up the company’s news operation. From managing a staff of about 120 at the collegial Economist, where journalists’ egos are subjugated to the extent that there are no bylines, he suddenly found himself overseeing more than 2,000 editorial staff.