Overall, Thomson Reuters (NYSE: TRI) had a decent Q2, but results in it’s Markets division continue to be anemic. That segment, which was the focus of last week’s major management reorg that led to the departure of several high-profile Reuters executives, posted a meager 1 percent gain as its Eikon investment software product has struggled to attract enough sales.
Last week, the news of the Markets division’s upheaval came in two waves. In the first, Markets Division CEO Devin Wenig, a 17-year-veteran of the company who helped manage the integration between Thomson and Reuters when the two merged three years ago, exited after reportedly balking at vast changes requested by company CEO Tom Glocer and the Reuters’ board. In his place, Glocer is take over management of the reformed division.
Two days later, Glocer has issued another staff memo that highlighted a mix of promotions and exits, including the departure of Chris Ahearn, the president of Reuters Media, and Reuters CMO Lee Ann Daly.
In a statement with today’s earnings, Glocer said that the “Markets division is below our expectations, and I have decided to accelerate the transformation in Markets, delayer the organization following a similar move in the Professional division earlier this year, and make a series of changes in the leadership team. I am confident that these changes will result in improved performance.”
Earlier revamp: In addition to facing a tough economy that has meant fewer investment professionals to sell its Markets division services to, that business also faces very tough competition from Bloomberg and Dow Jones (NSDQ: NWS). Last fall, the Thomson Reuters Eikon product began adding social media and mobility to the mix of market information, news, analytics and trading tools as part of its financial markets data subscription business. The overhaul followed the introduction of a video on demand option for its subscribers called Reuters Insider. To try to attract more sales, Reuters unveiled a major ad campaign, something it hadn’t done since the merger.
With the improvements in search and other online features reducing the unique quality of the real-time information business of Thomson Reuters and rival Bloomberg, the Eikon-pronounced “icon”-system seeks to combine the best of both worlds. Although a Google (NSDQ: GOOG) or Twitter search is still miles away from what real-time data systems can provide, Thomson Reuters believes that users will appreciate the additions such as web-style search and social networking, as well as Blackberry and iPhone mobile access. While the company has been trying to broaden its offerings to include a more general business audience, it’s the subscription business that still pays most of the bills.
In its report today, Markets has sold “or migrated” roughly 28,000 Thomson Reuters Eikon desktops since the launch of the new desktop offering in September 2010.
Interestingly, a breakdown of Markets’ revenues, however, doesn’t seem so bad:
– Sales & Trading up 8 percent
– Investment & Advisory up 1 percent
– Enterprise up 10 percent
– Media up 6 percent