Dow Jones Names Clabby Intercompany Liason At Telerate

Dow Jones & Co., Inc. and its 67 percent-owned Telerate, Inc. have taken a new step to bring the two companies closer. Long-time Dow Jones News Service executive William Clabby has been named vice president, intercompany relations, at Telerate and has joined the five other Dow Jones officials sitting on Telerate's board.

His new liaison role is designed to try "to make some sense out of the potential that we have together that we haven't really capitalized on," says Clabby, who retains his Dow Jones title of vice president in the Information Services Group. "Nothing exotic" should come of it, he says.

Despite this assurance, the appointment is seen by some as a first breach in the more or less arm's-length relationship that has separated the companies since Dow Jones began grazing on Telerate over two years ago. Competitors and customers wonder what exactly Clabby means by "the potential that we have together." Clabby isn't saying, although he cites communications, product and personnel policy as three areas in which synergies may exist.

It is of course the second of these -- product -- that piques the industry's interest. Speculation centers on the U.S. equities sector, where Dow Jones is dominant in news and Telerate weak in market data.

Several possibilities arise:

(1) At its most benign, Dow Jones could use Telerate's equity service, the former CMQ, as a vehicle for developing exclusive value-added versions of the Broadtape. Page-oriented displays of current teleprinter-formatted information present a particular opportunity.

(2) More aggressively, Dow Jones could use news as a wedge to develop market share for Telerate in equities. Instead of packaging news as an add-on to a market data service, as most quote vendors do, Telerate could package market data as an add-on to a news service. Dow Jones has already announced plans to deliver a composite data feed at 9600 bits/second, which is more than five times the bandwidth needed to handle all of the DJ news reports.

Will the balance of the pipeline be used for numeric information?

(3) Alternatively, Dow Jones could simply begin to evolve differential pricing to give Telerate an edge as a source for DJ news. Other vendors would cry foul, but in the end would have limited leverage.

Dow Jones, of course, maintains that it will provide access to its news reports to all quote vendors (except Reuters) on an equal basis. Over the long haul, however, many vendors expect -- at the very least -- that Telerate will emerge as first among equals.

So far, Telerate is the only quote vendor with a vice president who is also an officer of Dow Jones.

Whether that already makes Telerate first among equals remains to be seen.