Informing Investors
By Kevin Kipp
Bridge
Information Systems makes St. Louis world-wide heart of financial
markets data lifeline.
Whether you want to follow emerging or developed markets; equity,
option or fixed income markets; domestic or foreign markets; Bridge
Information Systems can take you there.
Foreign
exchange, oil, natural gas, power markets? In real time? Bridge.
You
need to rout and manage orders? You want spreadsheets, charts
and analytics? Late breaking news delivered to your desk? Bridge.
The
St. Louis-born, now New York-based, and ever world-savvy outfit
is, according to company materials, the largest provider of financial
information in North America. It's the second largest internationally,
but in that arena it bills itself as the fastest growing.
Its
operating units, like now-public internetworking service provider
SAVVIS Communications Corporation, provide related services. There's
also BridgeNews, Bridge Trading and Telerate.
According
to St. Louis-based Tom Wendel, Bridge Information Systems chairman
& CEO, the privately held company works in a "split world.
Bridge has an equity focus; Telerate is strong in world capital
markets."
The
company employs 5,000, half in the United States. Six hundred
are reporters--like some of the kids Susie Gharib and Paul Kangas
chat up on Nightly Business Report--in 100 countries. Bridge is
managed through 12 geographic units, like North America, southern
Europe, Australia, Japan. One thousand employees are based in
New York, 800 here in St. Louis.
Here
also are centered Bridge's technology and trading centers. Here
(and in Kansas) are located Bridge's principal data centers, labs,
and development labs. And here, Wendel expects the number of employees
to double in the next three years, as the company continues to
grow.
"New
York is the mouthpiece," says Wendel (as polished a speaker as,
but no relation to, SLU's Professor George D. Wendel), "and London,
and Singapore, and Hong Kong and elsewhere in some 80 other locations
throughout the world.
"But
St. Louis is where our heart beats."
His
implication that data and its manipulation are Bridge's lifeblood
is a far more elegant analogy than the digestive images that being
called the "guts" of the operation might conjure.
"We
collect information from all over the world," Wendel says, "store
it in and analyze it in St. Louis, and distribute it to a world-wide
audience from St. Louis."
The
original company started in 1974. A batch of investment professionals
saw opportunity
in the emergence of listed options and other time-critical instruments,
as well as in deregulation in the financial industry, and in other
competitive imperatives. They saw a market for instant financial
information and calculations on the fly.
The
computer company they bought from Dean Witter & Co., and named
Bridge, pioneered several electronic broker services in the 1980s.
But its emergence on the world stage began after the acquisition
of Bridge in 1995 by a private New York investment firm: Welsh
Carson, Anderson & Stowe.
Under
Wendel, the firm has grown ten-fold, merging with seven market
data and technology companies. It's mentioned in the same breath
now with well known financial news services like Dow Jones, Reuters
and Bloomberg.
The
acquisition spree kicked off in 1996 when Bridge bought Knight
Ridder's Financial News.
Then
EJV Partners, a fixed income data and analytics firm. Then MarketVision,
which
Wendel says, "provides us with network integration capabilities."
And in May '98, it acquired Telerate, formerly Dow Jones Markets.
(Telerate, Wendel points out with a wee hint of glee, was the
data vendor subsidiary's name before Dow Jones owned it.)
"These
four companies account for the core of Bridge," Wendel says. "After
that point we were an established market data vendor by virtue
of several other acquisitions. We bought Telesphere to build our
back-office product, and acquired the retail brokerage information
business of ADP."
These
moves built a stronger company five ways. First, Bridge flat out
got bigger. For instance, according to an article in the spring
1999 publication of the Society of American Business Editors and
Writers, Bridge News doubled its stable of reporters with the
Knight-Ridder acquisition.
In
that same article, author Andrew Blum added that the acquisition
made Bridge journalistically better, shoring up its coverage of
corporate events; Bridge was already highly regarded for its commodities
and fixed income coverage.
Thirdly,
aggressive acquisitions, Wendel notes, also narrowed the field
of competitors. Fourthly, once in the fold, the acquired companies
were infused with more powerful technology.
"None
of our acquisitions had a really state-of-the-art technology product,"
Wendel says. (Savvis with 225 asynchronous transfer mode (ATM)
switches and 10,000 routers may be an exception). "They had content,
clients, market positions, but their products were falling behind
the product curve."
As
an example, he cited the ADP purchase. "They had 60,000 users
but ADP hadn't had an update in three or four years. It's like
an automobile. It needs new features and twists to be marketable.
They hadn't put a lot of that into it."
Lastly,
Bridge-bought companies have been assimilated, Borg-like, into
an integrated whole, so that "one infrastructure supports sales
to segmented markets, based on one underlying data center," Wendel
says.
"One
desk top can evolve into a set of products. It's like having the
ability to produce a Ferrari or Chrysler from the same plant,"
he says. "If we have a PC on a desk, we can poke in a function
code and it can become a Telerate terminal, or an E-Trade terminal
or it can be completely Kanji in Japan."
Or
it could support retail stock brokers in Italy. "The client owns
the desk top," Wendel says, "but what it is is bought from us."
Depending
on what capabilities you want or need, Bridge provides its goodies
in work station packages. The more you get, the more you pay.
In electronic order entry, for instance, one source says monthly
fees could range between $250 and $1,500.
Meet
Scott Bedell, vice president at Firstar private client group.
His trust and investment services operation manages $4 billion
of the $17 billion of client funds that Firstar has under management
in the Missouri-northern Arkansas region. His staff use some 30
desktops, with Bridge products. Here's how:
"Not
only do we receive our desk top quote services from Bridge, we
also do a fair bit of our trading through their company, for the
execution of both stocks and options transactions.
"Our
trades are routed to a variety of sources depending on their size.
When I execute options trades, I have a designated line to a Bridge
trader who jumps on a designated line and speaks to the floor
broker at the particular option exchange."
Could be Philly. Could be Chicago.
(Ask
not if trading is important to Bridge; ask if Bridge is important
to trading.
A couple of sources confirmed that Bridge-consummated transactions
represent as much as 2 percent of New York Stock Exchange volume
some days.
What's
2 percent of, say, 1.4 billion shares? Twenty-eight million shares.)
"One
step further," Bedell says. "We also have the ability to set up
alert boxes, for news or information that would substantially
move a stock. We can type in a specific code word like 'first
quarter earnings,' further defined by the company name, Pfizer
or whatever. As soon as that information is disseminated from
whichever news service, it will interrupt us in any application
on the PC--whether we happen to be working in Word, Excel or internal
e-mail--to let us know that information is out there affecting
our positions.
"I
can't tell you how valuable that is when information is the driver
of stock prices and the performance for our accounts."
Bedell
says that the abilities Bridge gives his outfit to analyze stocks
is "probably the second most important function. We can run comparisons
of one company versus their industry. Or its competitors, comparing
General Mills to Kellogg for instance...total return indexed to
a dollar, at a particular time; dividend growth, price-to-sales
ratios; EBIT [earnings before interest & taxes]. Cash flow
is paramount to us."
Now
here's the clue about how high the Bridge technology is. Bedell:
"We can pull this up in five-to-10 seconds."
But
Bedell says that Bridge separates itself from other financial
information vendors (Dow Jones feeds come with Bridge's proprietary
system, BridgeNews) in ways other than technology and speed.
"We
can receive a Bridge summary of a market event in a language universally
understood by the portfolio managers...clear and concise in the
delivery, which allows the portfolio manager to quickly interpret
and disseminate the news to his or her client base."
Despite
its facility with and the virtues of its shirt sleeve English,
Bridge is a technology company.
Here,
from Monica Summerville, editor of Waters Information Services'
MDI: The Market Data Industry, is an illustrative sentence,
published last November, about another data center the company
is building in north St. Louis County:
"But
the data center's architecture, which incorporates push technology,
middleware and object-oriented data structures was actually designed
well before hype-masters managed to spin those terms into buzzwords."
Pity
when that happens to perfectly good arcana.
Continuing,
a few paragraphs later, "Where most data centers are built around
a mainframe model, Bridge has opted for a client/server, real-time,
event-driven architecture complete with self-describing data."
Bridge,
she went on to discover, had scrapped the "PDP-11s and subnet
approach years ago."
Bottom-line:
it's comforting to know that Bridge can add processing power relatively
easily.
Wendel
points out other kind words from Waters. "It's an industry magazine,
and they recognized Bridge as the number one provider of financial
information in North America with 25% of the market. We have the
strongest position both on and off the trading floors. Our coverage
is broad and deep."
Staff
at the St. Louis Post-Dispatch also extol Bridge.
Jeff
Herman, business section editor, says "Bridge is moving
more stuff, and we use some of their reports on our front page.
They usually have the best look ahead at what's going to effect
the markets.
"There
are so many more options for wire stories out there today. We
haven't been able to weave Bridge into that mix yet to the extent
we would like."
AP (which carries Dow Jones) and Bloomberg provide most of the
wire stories the Post prints. But Bridge is their on-line
partner, Herman says. One feature provides readers a taste of
online investment management. "Punch in your stocks on postnet.com,"
Herman says, "and it'll tell you what your portfolio is doing.
Bridge is doing that with us."
Herman
had a heads-up about another Bridge innovation: "They're doing
some exciting things, experimenting with an Internet business
newscast. That's something I'm sure postnet.com is going to be
very interested in."
According
to a Bridge media release, the venture will be called WebFN.com.
It's a partnership with the financial broadcasting experts at
Weigel Broadcasting in Chicago (nine stations in four markets,
including one independent station and CBS, ABC, UPN and Warner
Bros. and Telemundo affiliates).
The
joint venture, the release continued, will produce and digitally
deliver financial video news, combined with video on demand, investment
tools, and "a multi-screen format, connecting anchored video reports,
text updates and archived information."
Whether
with the creation of a streaming financial superstation or by
moving to fully fault-tolerant server pairs at their data center,
Bridge signals that what happened--or rather didn't happen--at
ADP's quote terminal business won't be repeated.
One
of the most exciting dimensions of the future at Bridge, Wendel
says, "is to be party to this expansion of Internet protocol services
and the democratization of financial information. As the world
is more awash in cash, as people look to managed accounts, and
become more active investors, there's a growing thirst for financial
information."
Day
traders for instance. In a speech last September, Wendel estimated
roughly 5 million investors were active online in America, an
increase of 5 million from two years earlier. He projected the
number would be more like 15 million within five years. Add Europe
and Asia, and pretty soon, you've got a new market for financial
data.
"That's
what fuels Bridge's growth," he says. "Ignorance is not a competitive
advantage in most markets. So there's a real opportunity to provide
information to an ever-growing number of users."
And
some users might not even know it's Bridge they're using.
Wendel:
"We provide to our clients (like E-Trade) to provide to their
clients. It's their brand, their feel, but it's our technology
that drives it."
Democratization
and thirst for knowledge is fine. Bridge remains a profit seeking
organization.
"The
challenge for Bridge is to find the price point and package for
that information, so we hit the right elasticity of demand in
the marketplace," Wendel says, "so we are of value even though
there's so much free information on the Net."
Asked
why Bridge chose to heavily invest in St. Louis, Wendel says,
"We located here for several reasons. This area has a strong work
ethic, a well-educated population and culturally a strong emphasis
on--if not reverence for--education. You really don't have to
push people to learn skills. It comes naturally to them. Their
attitude is 'you aspire to do a little more today than you did
yesterday.' So this is a strong place to build a technical work
force."
In
addition to people and attitudes, Wendel lauds the area's infrastructure.
"It's a good environment for growth. It has a strong technical
base from which to access the world."
Kevin Kipp runs Bubble Communications, a creative services and
community relations firm in St. Charles.
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