Bloomberg’s Stepped-up Presence Will Please (Almost) Everyone

With little fanfare late last month an 800 pound gorilla of business information raised the platform of its small Washington presence.

Bloomberg, a premier Wall Street and business information firm, directly competes with Dow Jones, News Corp. (WSJ) and most sources of business news and data, bought Eagle Eye Publishers in late February.   Eagle Eye, in our view, does the best job of cleansing, plugging, and presenting GSA’s unique set of federal contract data, the Federal Procurement Data System—Next Generation.  More than a numbers source, Eagle Eye publishes a range of data and analytical services useful for federal business intelligence.

By acquiring Eagle Eye, Bloomberg, which already had a news bureau in Washington, is probably projecting much greater ambitions.  Almost all stakeholders should benefit.  Here’s why:

1.  Bloomberg has skilled journalists who generate 6,000 news items a day.  They are, are sorely needed in the government contract arena, where few experienced journalists dwell.

Trade press writers generally lack the time and sources to dig up fresh news.  They are mostly confined to dressing up controlled releases of information by the government and contracting firms.   Audit reports, prepared testimony, news briefings and releases are primary sources.  They have no time for scoops of importance.  They gather available information pushed to them, cut it down, and possibly ask familiar sources for some opinion.   Apart from news, virtually all trade press columnists have clearly labeled industry or government day-jobs, which are different than, say, having in-house columnists who represent a range of views.

The mainstream media produces little about government contracting.  The Washington Post has never invested in talent that can do justice to the industry that employs the most people in Washington—yes, more than the 350 thousand government workers.  The New York Times only covers procurement intermittently; the Washington Times and USA Today do a better job, but devote scant resources.  The Wall Street Journal does a great job—when it deigns to do a story on contracting, usually in connection with a controversy, such as the Air Force tanker deal, or company crises.

This gulf of non-coverage explains why non-profits, such as POGO and Pro Publica, have a potentially large and hungry market for their expanding (muckraking, in a good sense) coverage.

Even with these sources, investors—and taxpayers—are more in the dark than they should be about an industry spending over $550 billion in tax dollars annually.

2.  Bloomberg already has a base of Washington know-how. It has published among the best coverage on the workings of the federal bailout, and can go deep—WSJ-style—on particular procurement controversies, such as the Air Force aerial tanker saga.

But there is so much more to cover, from the supply side, which is a yawning reportorial abyss, compared with focusing on the much easier demand, or government, side of procurement.  With its understanding of business, Bloomberg can easily surpass what the trade press and most mainstream media publish concerning contractors.  Its editors and reporters know the  corporate activities  that investors, customers, overseers, and other stakeholders need to grasp.

3.  Bloomberg is objective.  The controlled circulation trade press is heavily dependent on advertising.  And it also engages in such activities as award programs, industry-government galas, and under-writing charitable events.  The largest company, 1105 Communications, is also the owner of the  FOSE trade show.  These kinds of ties are not a great problem because of reader expectation, longstanding custom, and trade press dependence on government and industry sources that control the scope of what gets covered in almost every case.

Such ties and relationships would be a problem if the expectation were for news that can get the attention of policymakers, investors, and good-government groups that inform taxpayers.  However, there is scant indication that the trade press and the intermittently involved mainstream media are headed in that direction.  This is another good reason for Bloomberg to smell opportunity across several of its offerings and distribution channels.

3.  Bloomberg could make a breakthrough in federal contracting data.  Yes, this is a dreary subject and a constant, legitimate source of complaints.  GSA is likely to remain the sole source of the raw contract data, but there are many, untried ways to improve quality, presentation, and distribution.  But if any company could achieve a breakthrough, it is Bloomberg.

Bloomberg has the last word in the supply and distribution of a wide set of real-time and historical data sets that securities, commodities, and currency traders around the world need.  The company has high expertise in information systems, statistics, human interface methods, and multimedia technologies.

Even though Bloomberg could make a silk purse out the GSA data sow’s ear, we remain uncertain of the business case.  Perhaps because there are so few companies in the federal contract data business, innovation is slow and differentiation among the firms is limp.  This coterie of less than ten smallish firms deserves some new stimulation.

In summary:  people who need real and objective news of better quality and depth in the federal contracting business will benefit from Bloomberg’s stepped up presence.  The supply side—the companies—is what really needs more news and analytical coverage.  The MSM won’t care about the Bloomberg competition, but the company presents an obvious challenge to the usual trade press outlets in all media. Finally, with few meaningful improvements being planned in contracting data, Bloomberg is also capable of bringing major change in this domain if it wanted to.