NEW YORK -- Reuters Group announced plans Tuesday to spend $802 million to transform the 150-year-old news organization into an Internet company that delivers instant financial data to consumers as well as financial institutions worldwide.
The London-based company also said its 1999 earnings rose 9 percent, but said its growth was hampered in part by Y2K computer concerns.
Reuters said it plans over the next four years to move its services to the Internet from its current satellite delivery system, targeting the estimated 40 million individuals who now view Reuters information on Web sites served by the company. Financial institutions and other customers who currently receive financial data over Reuters' current system will also get the company's services via the Internet.
Reuters said it will create Web sites for its news and financial information and compete for consumers with American Online Inc. and other services.
The Internet has changed Reuters from a news company to an e-commerce company that investors around the globe will increasingly rely upon to move money throughout world markets, chief executive Peter Job said. The changes would allow Reuters to sell its services to millions of individuals who now invest from home.
"The Internet is changing dramatically the landscape of Reuters customer base," Job said during a conference call.
The company also announced a joint venture with Multex.com to provide information from investors, analysts and brokers to private investors in Europe. Users will be linked to Reuters' new consumer finance portal.
Reuters also will form a new company with Aether Systems Inc., to deliver financial data using wireless technology.
Last week, Reuters announced an agreement to form a secure, global financial network company to deliver financial information to brokers, traders, banks, insurers and fund managers worldwide. Users who now make investment decisions based on Reuters information will be able to conduct those financial transactions through the company's secure network.
Reuters said Tuesday its pretax earnings rose to the equivalent of $1.02 billion from $935 million in 1998. Earnings per share of Reuters stock traded on U.S. markets rose to $2.91 from $2.58.
Operating profits fell to the equivalent of $883 million from $886 million. The company said growth was held back by concerns about possible Y2K problems and weak foreign exchange markets.
Reuters did not report quarterly earnings; under British law, publicly traded companies are not required to break their annual earnings down by quarters.