REUTERS GROUP PLC ANNUAL REPORT AND ACCOUNTS 1999

Peter Job talks about theprojections for future groThe internet/mobile age will have amajor impact on the lives of everyone.What opportunities does this presentfor Reuters?We see the Internet as a fast and deepcurrent running through all our activities.This current will gain strength from thedevelopment of mobile and broad banddigital technologies. If you harness it,you can reap potentially large benefits.Our first priority at Reuters is to achievethis in the financial markets. We believeour central position in these marketsmakes our vision very real. And beyondour financial markets other marketsbeckon.Reuters purpose is to help organisationsand individuals work more effectivelythrough access to information andsoftware which enables e-commerceto be conducted.Whereas we have historically dealt withcustomers in the hundreds of thousands,we will now be able to serve tens or evenhundreds of millions of people – boththose employed within financialinstitutions and corporations in their ownbusiness activities or managing their ownwealth. This is a breakthrough for Reuters.So what will be the effect on yourbusiness?The first effect is to enlarge greatly thelower tier of the market – the Internet willhelp us find new customers who wouldnot have been profitable to us before.We are developing a new businessmodel which will accelerate the processof porting our core business over tointernet technology. This will involvechanges to the Reuters product rangewith new price points and new offerings.The new business model will help clientscut their costs and also reduce our owncosts of administration and support. Thekey to us will be to develop the ‘thinclient model’ allowing data to bedownloaded from a remote servertogether with the software needed todisplay it.How are you reorganising the group tocapitalise on the Internet?Firstly, it is important to recognise thatReuters has been embracing internettechnology for several years – so, thisreorganisation is a natural evolution ofthis process.The company is now focused on threebusiness areas: Reuters Financial, thecore business, is grouped around thefinancial markets business area. Itencompasses Reuters Information andReuters Trading Solutions, previouslyknown as Reuters Trading Systems. Thesecond is Instinet, our electronicbrokerage subsidiary. The third isReuterspace whose origins lie in ReutersVentures, a division that was set up lastJuly to cover our new internet activities.As part of these three clear businessareas, we also intend to develop newjoint ventures with partners to increaseour exposure to the Internet and itsassociated technology.So how will profits be made from theInternet?This is a longer-term question since veryfew people currently make profits fromthe Internet. However, the potential forrevenue enhancement is significant and,unlike many dot.com start-ups, we alreadyderive a worthwhile internet sales stream.It will be essential in an internet world tohave multiple assets. In the financialmarket that means text and video news,figures, performance measurements,analysis, research, historical databaseaccess, transaction applications, softwareand credit information. We already haveall this and much more. We are takingmany of these assets on to the Internetnow with the establishment of our ownfinancial portal.Top line growth in your core businesseshas slowed down over the last couple ofyears. What levels of growth do you seein the market for the core businesses?The middle and upper levels of theinformation market have the potential togrow at a mean of about 5-10% inmarket terms per annum. Within thesecategories there are variations by sector.For example, asset management stilllooks set for faster growth whereasforeign exchange is probably decliningmarginally. This will make it something ofa challenge for us to outperform themean in the immediate future. At thelower end, we see our customers more8 Reuters Group PLC Annual Report 1999