Saying it wants to provide for “growth and success in the digital age,” CNN (NYSE: TWX) said that, as of Friday, it will no longer use material from Reuters’ (NSDQ: RTRSY) news service, Reuters reported. The company said it wanted to invest in its own news gathering sources and dropping Reuters, a service it used for the last 27 years, will help CNN cut costs. It will still use content from Associated Press and Associated Press Television News. This will affect CNN.com, which for a large part, uses Reuters copy.

Reuters publicly said two years ago that it wanted to focus less on open-Web syndication and wanted to focus more on developing Reuters.com and its other country-specific destination sites, though this breakdown is probably not part of that push.

Update 1: Guardian: In an e-mail to staff, the Reuters Media president Chris Aheam said that “regrettably, after a period of extensive discussions, no commercial agreement could be reached at this stage..With our customers however, Reuters’ leading news and information has to be put in a commercial context. We are hopeful that we will have the opportunity to work with CNN again.”

Update 2: FT reports that Reuters was paid less than $10 million a year by CNN, so a small deal for Reuters Media overall, which earned about $370 million in revenues last year.

Update 3: In an internal memo within CNN, some hints about the strained and now broken relationship: “We can no longer use file video from Reuters, even if it is stored in our archive. Existing packages with Reuters material must be re-edited before they can air…Because we will no longer have direct access to the Reuters wire in iNews, we will only be able to see the Reuters reporting on Reuters.com. Therefore, we should attribute to Reuters.com when we decide a Reuters story is important enough to report.” And this is the kicker: “And as you know, these days, original content truly is king. But it will take a little time to get all our systems in place and up-and-running; your smart-thinking, hard work and attention to detail over the next few weeks will be critical to our success as we move forward.”

Update 4: Reuters itself reports that the contract value is only $3.5 million, not $10 million as FT reports,, and that money will be used to develop original news operations