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Bloomberg Buys Brainpower In More Ways Than One

April 01, 2006

Bloomberg Buys Brainpower In More Ways Than One

The last and only time Bloomberg bought a company it was a small provider of sinking-fund data that formed the basis of the secret weapon it used to beat rival Reuters over the head with: its Princeton, N.J., data centre. To what strategic use will it put its latest acquisition?

The company this month agreed to buy Swiss investment management analytics company, Brainpower N.V. The details of the deal are already public domain knowledge, so we won’t dwell on them here except to record the purchase price, of around EUR 33 million, based on Brainpower’s share price at press time. Brainpower reported 2005 revenues of EUR 7 million, and was advised on the transaction by our old friends at Marlin & Associates.

Bloomberg has made clear its intentions to integrate Brainpower’s capabilities into the Bloomberg Professional service. Brainpower’s proprietary technology is aimed at helping investment managers streamline processes, become more collaborative and make investment decisions more quickly.

The aim, it seems, is to add Bloomberg’s expansive data set to the mix to offer a deeper and broader set of analytics and so-called intelligent presentation capabilities, bolstering Bloomberg’s presence in the buy-side sector it already dominates.

In essence, this looks like a defensive move by Bloomberg as it starts to feel a slew of competitors and would-be competitors nip at it heels. A-Team Insight readers know who these players are, since we’ve been covering them now for months. Reuters’ Knowledge series, built on the former Multex, is beginning to take shape. Thomson Financial’s ONE for Investment Management is emerging as a credible, integrated offering for the buy side, particularly in Europe where it leverages the former Datastream database.

Beyond Bloomberg’s usual rivals, others have been working to improve their offerings within the investment decision-maker and research segments. Factset Data Systems has been adding content and analytical functionality. Standard & Poor’s has been building its acquired Capital IQ platform.

Meanwhile, expect Brainpower to drop the third-party content it uses from the likes of Interactive Data, Standard & Poor’s and others. Or, perhaps more likely, expect them to pull their content as quickly as they can under their redistribution agreements.

© Copyright A-Team Group 2006.

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