A $10 million payout after losing his job built the Bloomberg empire
In 1981 Salomon Brothers was taken over and Michael Bloomberg, one of its partners, left with a $10 million settlement. He had built computer systems for Salomon, so he used the money to create a machine delivering live market data to Wall Street. Its descendant, the Bloomberg Terminal, still earns most of his company's money.
The first product, called the Market Master, reached the market in December 1982. Merrill Lynch was the first customer, buying 20 terminals and a 30 percent stake for $30 million, on condition that the startup, then called Innovative Market Systems, not sell to Merrill's rivals for five years. Merrill lifted that restriction in 1984, and two years later the firm renamed itself Bloomberg L.P. The terminal lets subscribers track real-time prices, search news, pull quotes and message each other, and in 2011 it brought in more than 85 percent of revenue, with prices starting at $24,000 per user per year.
Buying back Merrill's stake showed how fast the value grew. Late in 1996 Bloomberg paid $200 million to reclaim a third of it, a deal that put the whole firm at $2 billion. Then in 2008, with Merrill reeling from the financial crisis, it sold the remaining 20 percent for a reported $4.43 billion, implying a value near $22.5 billion. The company has stayed private throughout, mostly owned by Michael Bloomberg, who stepped aside as chief executive to run for mayor of New York in 2001 and returned to lead it in 2014.
News grew out of data. Bloomberg Business News launched in 1990 under Matthew Winkler to serve terminal users, and by 2000 its newsroom counted upward of 2,300 journalists spread across 100 countries. Bloomberg Television started in 1994 as a DirecTV subscription channel broadcasting 13 hours a day, and in 1992 the company paid $13.5 million for New York's WNEW radio, turning it into all-news Bloomberg Radio.
Acquisitions extended its reach. It bought BusinessWeek from McGraw-Hill in 2009, when the magazine was losing advertising, bought the energy research firm New Energy Finance the same year, and paid $990 million in 2011 for the Bureau of National Affairs to strengthen its legal and government services. As of 2019 it had 176 locations and nearly 20,000 staff.
Source: Bloomberg L.P.
