Reuters Essay

Reuters, the world’s largest international multimedia news organization, provides a variety of news-related services including newswires, pictures, video, online syndication, and news graphics. In 2008 the company employed 2,400 journalists reporting from 196 bureaus. In 2007, it filed over 3 million news items in 132 countries. According to company statistics, Reuters’ news is viewed by over 1 billion people a day. Following the announcement of negotiations in 2007, Reuters Group plc and Thompson Corporation, the media conglomerate, combined in 2008.

The bulk of Reuters’s profits derives from its portfolio of financial news services, which range from lower tier off-trading floor products to advanced equities trading and analytics. These financial tools facilitate communication among brokers and other financial transaction intermediaries. Reuters conducts brokerage services in global equities to securities industry professionals and supplies trading research for institutional investors. It also provides research and advisory services. Despite competition from a number of other financial information service providers, such as Bloomberg and Dow Jones, Reuters has grown consistently since the 1990s.

Reuters’s economic information services, although part of its offerings since the company was established in 1851, were consistently less profitable than its general news services until the 1960s. During the 19th century, Reuters transmitted commercial information via telegraph to and from England and the continental European bourses. These services principally comprised opening and closing prices and did not garner significant revenue. After the advent of shortwave broadcasting in 1923, which permitted the simultaneous distribution of larger news reports to multiple recipients, the company developed a variety of trade and market services. Relying on its existing international ramifications, which had developed in conjunction with its general news services, the company was able, unlike its competitors, to assemble a report of commercial information from markets around the globe. By the late 1960s, Reuters was poised to take advantage of emerging computer technology.

A key to the company’s long-term success has been its ability to reinvent itself in the face of revolutions in communications technology. The rapid rise of the internet as a tool and platform for the collection and distribution of news was followed by the company’s combination with Thompson Corporation. The advent of point-to-point computer portals enabled the company to reorient its business during the 1980s and to separate itself from ownership by the press. In 1984 the company was publicly floated after being held in trust by British newspaper interests since 1941. The development of a Reuters trust, controlled by British newspapers, was in part a solution to the growing threat that the company’s news services faced from radio broadcasting.

Prior to the development of computer technology, the company struggled to meet the needs of its newspaper clientele and consistently make profits. At least until World War II, the company’s revenues from the British press were not sufficient to meet the costs of international news gathering. Insufficient profits at home caused Reuters to pursue alternative sources of revenue abroad and to diversify its business. During the 1890s, the company developed a variety of auxiliary services including a remittance business that grew into a full-fledged bank, both of which collapsed with the onset of war in 1914. During the 1920s, the commercial news services replaced these alternative lines of business.

Reuters has always had a large international presence mainly because of its role as the news agency of the British Empire, but its reception abroad has been mixed. During its first 100 years, the company’s foreign operations consistently lost money. Its exclusive access to international news, which derived from contracts with other national news agencies in Europe and the United States, sustained Reuters’ dominant position abroad. These cartel arrangements, which formed in the 1850s and continued in varying forms until the 1960s, enabled Reuters to exercise significant control over the news circulating throughout the world. The company’s position abroad has changed with developments in telecommunications, international trade, and the history of the British Empire. Following World War II, competition reduced Reuters’s presence in its traditional imperial strongholds, causing it to focus its attention more on European and North American markets.

 

Bibliography:

  1. Roderick Jones, A Life in Reuters (London, 1951);
  2. Deborah Orr, “Reviving Reuters,” Forbes (v.176/1, 2005);
  3. Donald Read, The Power of News: The History of Reuters (London, 1999);
  4. George Scott, Reporter Anonymous (London, 1968);
  5. George Storey, Reuters’ Century (London, 1951).

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