The move is a strategic decision that allows XFN to focus its operations where it has a significant competitive edge in Greater China.From its business strategy it makes perfect sense. When XFN was set up, it wanted to focus only on that financial information that would make sense for them financially. They were happy to leave the rest of the - loss-making - operations to its competitors. When they took over the Asia-Pacific operation of AFX they got a heritage that did not fit their core business - making money - but they have put up with it until they could get rid of those operations.
What I find strange is that Thompson, who recently bought Reuters, is the buyer. Reuters had a financially rather solid financial data service for business clients and a - heavily bleeding - news operation that was internally subsidized by the financial data division. Since news has become a commodity making money as a general news services has become impossible.
I would have imagined that Thompson would find in the near future a nice excuse to wind up Reuters loss making news operation, but this purchase shows their strategy is going into another direction.
The six cities have seen a drop in foreign news operations as the number of foreign correspondents is dropping globally.
1 comment:
Xinhua, a very shady operation in my view... They buy Market News for like $15 million and today they list it as an asset worth less than $200K! Stock takes a fresh nosedive every time I look.
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