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RSS feedsReuters has sold its 50% stake in news aggregation service Factiva to its development partner, Dow Jones, for $153m in cash and $7m in preferred stock. Subject to US regulatory approval, Factiva will be absorbed into the Dow Jones Enterprise Media Group, which is headed by former Factiva boss Clare Hart.
The news aggregation market has been rocked in the past 12 months, first by changing licensing agreements with newspapers like the Financial Times, which delayed feeds by 24 hours this summer, and by free news services such as Google News Archive.
Tom Glocer, CEO of Reuters, said of the deal: “The price works out to more than a four times return on the $40m we originally put in to this business, so we are quite happy. Content previously only available on a subscription basis is becoming available on the free web.”
Rich Zannino, chief executive at Dow Jones, said: “Together with the previously announced sale of up to six of our community newspapers, this reflects our determination to reduce our reliance on print publishing.”
Reuters has agreed not to compete with Factiva’s core business for a two-year period, and to continue the exclusivity arrangements that are currently in place.
But the agreement will also allow Factiva to develop licensing deals with Reuters’ rivals. Alan Scott, Factiva’s chief marketing officer, said: “This gives us opportunities to grow in areas where we could not compete before.”
Scott said there are no plans to abandon the Factiva brand, in which the company has invested heavily. “In the past three years, we have created specific applications for embedding news and current awareness in workflow. We see opportunities to develop services that will penetrate the financial community more aggressively.”
