Pearson extends online position with global market-data deal
Tuesday 16 November 1999
DBC provides real-time market data to traders and individuals in the US. FTAM provides a similar service with data on more than 3.5 million securities. Its subscriber base is largely professional investors.
Pearson said the deal would create a larger group capable of delivering a global service to a global audience. "Together we will broaden our scope of services across the specialist asset management and portfolio evaluation markets and deliver more of our products by Internet," said Stephen Hill, chief executive of Pearson's FT Group.
The deal gives Pearson a 32 per cent stake in CBS.Marketwatch.com, a financial web site which is part of the giant CBS television corporation. The combined business will have revenues of $320m, bigger than the total earnings of the Financial Times newspaper.
DBC has a market value of $495m. Marketwatch.com has a market capitalisation of $675m.
The transaction is being effected by DBC issuing new shares to buy the FTAM business, though Pearson will have a 60 per cent stake in the new entity. The deal puts a value of around $800m on FTAM.
The new company has agreed a cross-marketing deal between CBS's Marketwatch.com and Pearson's fledgling online service FT.com. The CBS site is currently attracting 4.6 million visitors a month. FT.com's monthly visitors total around 850,000, up a third on six months ago. However, the two sites are expected to remain separate. The deal is expected to strengthen the Financial Times' push into North America where its circulation has reached 95,000.
"Together we will broaden our scope of services across the specialist asset management and portfolio evaluation markets and deliver more of our products by Internet," Mr Hill said. "The beauty of this deal is that it gives us a strong position in the US business information market with no cash outlay."
The Financial Times is investing pounds 40m in FT.com and has recruited 100 journalists to staff it. Pearson group is investing pounds 120m in new media, largely through the FT and its Pearson education subsidiary. The plans include a new, as yet unnamed personal finance web site which will operate alongside FT.com.
Pearson shares closed 9p higher at 1,484p.
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