A startup looking to take on the financial information behemoth Bloomberg LP is hiring a former Bloomberg executive to begin a new financial news service.
Norman Pearlstine, a former top editor at Bloomberg, The Wall Street Journal and Time, is joining Money.net, which has been building a low-cost alternative to the data terminals that sit at the core of Michael R. Bloomberg’s business empire.
Pearlstine is tasked with building a news feed for Money.net that will be based on machine-generated news bulletins and stories. He will be hiring journalists to help guide the computers and potentially supplement them with reporting — part of a broader move toward the automation of journalism.
“I think I know what the customer is looking for, and I think I know where smart developers and journalists working together can add value,” Pearlstine said in an interview. “My bias is toward not spending a lot of time duplicating things that everybody else is doing — trying to think about what timely, usable information is for a professional investor.”
Pearlstine was the chief content officer at Bloomberg until 2013, shortly before Bloomberg ended his final term as New York City’s mayor and rejoined the company he founded in the 1980s. Pearlstine is currently vice chairman of Time Inc. and will remain in that role.
Money.net was founded by another former top executive at Bloomberg, Morgan Downey, who got to know Pearlstine when they were both at the company.
Downey has been outspoken about his belief that Money.net can win over Bloomberg customers who are unhappy with the high price of the terminals, which generally cost around $21,000 a year. A Money.net subscription costs about $1,500 annually.
Downey said that Money.net now had about 50,000 paying subscribers, up from fewer than 10,000 a year ago. Over the same time period, the number of Bloomberg subscribers has remained steady at around 325,000.
Downey has been trying to capitalize on the fact that revenue is down in the financial industry, leading many banks and asset managers to look for lower-cost service providers.
“The industry is at this inflection point,” he said. “They know that the ecosystem of Bloomberg and Thomson Reuters can’t continue.”
A Bloomberg spokesman said the company had no comment on Pearlstine’s hiring.
Money.net began as a platform for basic financial data, but Downey has been trying to add tools that can compete with other parts of the Bloomberg terminal.
Recently, Money.net announced a partnership with the Wall Street messaging service Symphony, which is mostly owned by a consortium of banks. Symphony has been described as an effort by the banks to create an alternative to Bloomberg’s messaging system, which is often cited as a main reason to have the terminals.
Professional investors also choose Bloomberg because of the huge journalistic operation it has built, focusing in particular on market-moving news.
But Downey sees another opportunity to take on Bloomberg at a lower cost.
He contends that much of the information investors need is freely available in news releases, government statements and social media.
Downey has a team of developers working on software that can scan the web for news releases and stories from other publications to generate headlines for Money.net customers.
Last week, for instance, Money.net generated a headline from a Department of Transportation release. It read: “D.O.T. issues emergency order banning all Samsung Galaxy 7 phones from air transportation in the U.S.”
High-powered computers are crucial to processing more news and doing so faster than Bloomberg’s human-based system, Downey said.
Bloomberg does provide its customers with a stream of headlines from other major publications and social media. This year, Bloomberg’s editor-in-chief, John Micklethwait, announced that the company was creating a team to use more automation in its editorial offerings and that it had a news tool called Project Cyborg.
Several other technology companies are working to automate journalism, using software that can take raw data and turn it into proper sentences. But this strategy has run into obstacles. When Facebook recently moved to make its trending stories feature more automated, fake news stories crept in unnoticed.
Downey is hoping Pearlstine can bring in a team of journalists to help guide the machines toward accuracy. Downey says he wants Pearlstine to hire about 25 journalists to work with around 75 programmers.
Pearlstine is more measured than Downey in his ambitions to immediately take on Bloomberg. He says that for now the data giant still has a big lead in many areas.
But Pearlstine says there is an opportunity to do things in a smarter way given the current state of technology. He said Bloomberg News began more than three decades ago as a small team of people aggregating news from other publications.
“Technology has given you the opportunity to revisit that model in ways that could be better, faster and smarter,” he said.