The Wall Street Journal reports on the strong margin improvements but weak forecast for Reuters, which prompted a big dump of the stock in the markets, a market move reflecting impatience with the pace of promised improvements. But the markets seem to be ignoring the changing tenor of the core Reuters financial content business. With today's announcement of Citigroup signing on for a global contract to implement key content and infrastructure from the Reuters Core Plus kit Reuters has cemented a key account in the investment banking community that will be a strong reference point for other implementers.

By comparison long-time rival Bloomberg is scrambling to come up with a cohesive implementation strategy that can keep the best of its desktop presence while trying to accommodate deepening client demands for effective integration. Thomson Financial has built infrastructure that is likely to build them into a significant rival to Reuters over time, but still picks at the sides of the investment bank markets whilst building out from its retail-oriented ILX core. So while the numbers may not look rosy for 2006, Reuters has established a good position from which to fend off key challenges and to make further inroads into Bloomberg growth.

None of this seems to translate into huge growth for any of these companies short-term, unfortunately. Financial markets are mired in a low growth mode while many investors plow their money into real estate or other tangible assets. In the meantime financial content has changed fundamentally in many ways as a marketplace. We've gone from a "sweet spot" market where most of the money was made off of general-purpose terminal and feed products to a "barbell" market where most of the money is made off of highly automated services on one end and highly sophisticated desktop services for an elite few on the other end.

Even as financial markets recover it's not likely that much of the fundamental shape of the market will change: we'll see many fewer trading positions being added as conditions improve as global electronic markets keep trading much more efficient. It's going to take some deep thinking in financial content vendor circles to come up with products and services that can out-shine the ever-growing capabilities of their clients to manage their own content value propositions in-house. Some of this will be accomplished by taking a fresh look at how to integrate media markets with financial markets. In the meantime Reuters is making unglamorous but steady progress towards a strengthening market position.