"Reuters is primarily a news agency," said Steve Allen, a director at financial data consultancy DataContent. "In the past 30 years, we have seen Reuters trying to deliver service across the entire financial services industry. Reuters is now a technology company, a software developer, a systems integrator, an electronic broker, a consultancy firm, a telco provider and, in the past, has even been a hardware manufacturer and TV station."

• Caplin - which attracted $16 million in venture capital in 2003


• MarketXs - is based in the Netherlands and attracted $14 million in venture capital in 2003

"When an industry is immature, companies like Reuters or Bloomberg ensure customers get what they need by creating the total package themselves. But the newcomers argue that as an industry matures, it's far better for companies to focus on the skills they excel at.

Some believe Reuters and Bloomberg have been hit by the Innovator's Dilemma - a classic piece of 1990s management theory devised by Harvard Business School Professor Clayton M. Christensen. The Innovator's Dilemma arises when a big company is dissuaded by customers from introducing new-technology products because they are happy with the existing lineup and see no need for change.

One day, however, the established player discovers it is losing market share as customers that shunned its suggestions for new products start switching to new lower-cost applications offered by new entrants to the marketplace.

While conventional wisdom is that a company's problems stem from listening too little to its customers, a company can in this instance find itself in trouble because it listened too much.

Some point to parallels between Reuters and Bloomberg's current situation and the fate of the Telex machine. Once the fax machine was invented, nobody needed the Telex private network and the technology disappeared.

In the same way, the massive technology shift brought by the Internet means data no longer needs to be transmitted over proprietary data delivery systems owned by the likes of Reuters and Bloomberg."