As DJ cognoscenti know, Telerate was a financial data provider that DJ bought in stages under Kann’s predecessor in the late 1980s. At the time, the company was a giant among financial information companies, and Bloomberg—the Dow Jones of today—was still stoppable. But while Telerate’s data were limited, static, and hard to manipulate, Bloomberg reinvested in technology that allowed traders to make information stand on its hind legs and bark like a dog. Reuters, too, invested more than $1 billion in technology in the early 1990s, trying to keep up, according to Joe Nocera in Fortune. Dow Jones just pulled out profits. This went on for years—and that was Kann.
Finally, soon after I arrived in 1996, Kann’s board announced a $650 million plan to fix Telerate, internally called “Rolling Thunder,” which inevitably became known as “Rolling Blunder,” and which executives quoted in Fortune described variously as “schizophrenic,” “total confusion,” and worse. Customers complained that using “Dow Jones Markets” products was like buying a car you had to assemble yourself. Think: Coalition Provisional Authority.
Telerate led to a $900 million write-down in the fourth quarter of 1997. I don’t remember the building shaking at the time, but it may as well have. DJ really never recovered, while Bloomberg sped off without a glance in its rear-view mirror.
In a story earlier this year on Bloomberg’s “money machine,” Fortune’s Carol J. Loomis wrote: “in the annals of business, the fall of Dow Jones from its financial-information throne and the rise of Bloomberg must be counted one of the great competitive turnabouts in history.”
In the “annals of business,” one of the “great competitive turnabouts” is not something you want to be on the wrong side of. The ‘69 Cubs had one of those.
Today, a monument to Telerate sits in South Brunswick, New Jersey, in the form of a vast and mostly empty office complex built for the now defunct data-provider. Walking through South Brunswick is like visiting the set of “The Omega Man,” the 1971 Charlton Heston movie about the earth’s population being wiped out by biological weapons. The buildings are there, but all the people are gone.
A more symbolic but telling venture was WBIS, also called, “S+,” an over-the-air business-and-sports TV channel in a joint venture with the conglomerate ITT Corp. The station’s slogan—“Sports, money, and, oh yeah, life”—was much mocked by us newsroom know-it-alls, but in fact it did foreshadow the corporate humbug that would come to mark even mundane internal communications.
One day, I was riding up from the newsroom on the tenth floor to the cafeteria on the fourteenth. The elevator stopped on eleven — ding!—and about two dozen chattering twenty-five-year-olds, new WBIS employees, shuffled on. That happened every day until July1997, the day the elevator opened onto a gutted twelfth floor. The reception desk was gone and wires dangled from the ceiling panels. A single maintenance worker got on. Ding!
In the wake of Telerate, etc., dissident members of the Bancroft family, which controls DJ’s voting shares, began to speak up, with some calling for Kann’s ouster. One heir, Elizabeth Goth, was quoted as saying—correctly—that the problems at Dow Jones were more systemic and more deeply rooted than one troubled unit. “There is a history with this company,” she said. “We have had questionable outcome after questionable outcome in various business deals.”
This is 1998.
Defenders of Kann, who didn’t reply to requests for comment, will say that this is all old news, and it is. They will also say he deserves credit for launching Weekend Journal, Personal Journal, and the database company Factiva; for making the online Journal a pay site, redesigning the paper, and other measures. And they’re right.
But as they say on Wall Street, all that’s not going to move the needle, generate enough earnings to make a difference and build the financial base to support the Journal through down ad cycles and difficult industry transformations.
Look, I don’t say being CEO of Dow Jones is easy.