Dow Jones Outlines Corporate Structure For Info' Services

Dow Jones & Co.'s reorganization last week of its information services business segment offers a blueprint for the future of its real-time news, market data and other electronic publishing businesses.

The reorganization sets the stage for the complete absorption of Telerate Inc. into Dow Jones, describing where the company expects to find its economies of scale in terms of news-gathering and technology, and what markets it intends to target with its products.

In terms of its marketing and development functions, Telerate no longer constitutes a separate and distinct group within Dow Jones information services business segment. Instead, Telerate finds itself part of a new group, called Dow Jones/Telerate, although Telerate will continue to exist as a separate legal entity -- a Dow Jones subsidiary incorporated in New York.

The reorg divides the information services segment along marketing and product development lines. Where previously the segment was viewed in terms of two distinct groups -- Dow Jones Information Services Group and Telerate -- it now contains three -- Dow Jones/Telerate, Business Information Services, and Resources.

Dow Jones/Telerate and Business Information Services will serve marketing functions, with the former covering Dow Jones' traditional financial-sector client base and the latter expanding into the corporate marketplace. The Resources group will support the other two with news- gathering and technology development, at the same time seeking to derive economies of scale. Maintenance of Telerate's network, for example, already falls to Charles Brady, vice president of technology within the group.

Products that now fall under the auspices of Dow Jones/Telerate include all of Telerate's offerings, as well as Dow Jones News/Retrieval, Dow Jones News Service, Dow Jones International News Services, Professional Investor Report, Capital Markets Report and Federal Filings. The Business Information Services group comprises the sports ticker, as well as a variety of voice and facsimile information services and television and radio products.

While the restructuring doesn't resolve all of the key management questions, it has added a number of new names to the already-crowded upper tier of the report chart, as well as distributing some new titles to certain old names.

The restructuring increases from eight to ten the number of direct reports to Carl Valenti. As before, Valenti maintains oversight of the information services segment by wearing two hats -- senior vice president of Dow Jones and president of Telerate.

Executives at Dow Jones and at Telerate profess confusion about the immediate ramifications of the reorganization. They note that the reorganization was both sudden and unexpected.

The company's hand may have been forced by its own accounting department: the announcement of the reorganization preceded by two days the release of Dow Jones' financial results for the first quarter of 1992. In that report, revenues were broken out in terms of the new corporate structure's categories rather than the old.

In the report, Dow Jones claimed a 38.5 percent increase in operating income based on -- among other things -- lower interest expense and improved earnings at Telerate. However, under the information services segment's new structure, Dow Jones is unable to provide concrete support for such claims since it doesn't break out Telerate's results.

The information services segment reported an increase in operating income of 4.5 percent for the first quarter. Income rose to $40.3 million from $38.5 million. Revenue climbed 2.2 percent to $196.3 million from $192 million. The information services segment's income growth was slow compared with that of, say, Dow Jones' business publications segment, which reported a 154 percent increase for the quarter.

Within the Dow Jones/Telerate Group, Tim Turner appears to be most affected by the reorganization, picking up a new title and what some sources say is a larger chunk of responsibility. The other two direct Valenti reports within Dow Jones/Telerate, Julian Childs and Henry Becher, retain their positions as executive vice president responsible for Telerate's regions and EVP of product development and business planning, respectively.

Sources within Telerate -- or what used to be known as Telerate -- say that the Telerate reporting structure supporting Childs hasn't changed with this restructuring. They speculate, however, that the ongoing elimination of redundancy between Telerate's and Dow Jones' sales operations will now pick up speed.

With his new title, Turner is responsible for "for the news service, vendor news/retrieval, PIR and Federal Filings," according to a Dow Jones spokesperson.

Like Valenti, Turner has been a wearer of two hats: vice president information services of Dow Jones and vice president sales and marketing-Telerate Americas, reporting in the latter capacity to Childs. With the restructuring, Turner's Dow Jones title becomes vice president general manager of Dow Jones Financial Services -- an entity defined as part of the new Dow Jones/Telerate Group.

In his capacity as Telerate v.p., Turner still reports to Childs. However, sources indicate that Dow Jones continues to seek an executive to fill the vacant position of head of Telerate Americas. They suggest that if and when such a person is found, Turner -- and Scott Rumbold, who has filled in as major account manager of the Americas since January -- would cease to report to Childs in those capacities. Turner will then likely report solely to Valenti wearing his new hat as general manager Dow Jones Financial Services Business.

What that will mean for Turner is unclear. Some sources speculate that his role will shrink, both in terms of his involvement with Telerate and in terms of certain products that reorganization puts under the jurisdiction of the new Business Information Services Group.

Others wonder whether the expected series of changes will put Turner on a par with Childs and Becher -- with Turner handling the Dow Jones products and Becher and Childs the Telerate products. However, if Dow Jones' intention is to integrate Telerate fully, then a consolidation of leadership -- and, indeed, a showdown -- could be just around the corner.

Sources say that Rumbold -- whose position hasn't changed with the current reorganization -- is expected to depart when his contract expires in the fall.

Leadership issues appear close to resolving themselves within the editorial/news department of the Resources Group, as well. While William Clabby has the senior title -- executive editor -- it appears his influence continues to wane in favor of Richard Levine, managing editor. Levine's title was previously editorial director.

While the two share authority over the news departments, they arrive at their positions from the chart to Valenti until Valenti assumed his current position. Levine has reported to Valenti since the early 1980s, and his star has risen -- and, sources say, continues to rise -- with his boss's. Indeed, for most of the decade, Levine was the only Dow Jones editor who reported directly to Valenti. The others reported to Clabby.

Levine has recently overseen the news operations of Dow Jones' interactive news services, dialup news/retrieval, database publishing and voice information services, as well as Dow Jones News Service, Professional Investor Report and Federal Filings. Clabby oversees the Telerate newsroom, Capital Markets Report and AP/Dow Jones, as well as overseeing data integrity and optional services. But sources add that Levine will become increasingly involved in running the AP/Dow Jones and CMR operations.

The Resources Group also contains its own business management department. Kenneth Herts -- formerly assistant to the president of Telerate, i.e. Valenti -- is now vice president business manager-information services and head of the business management department within the Resources Group.

Herts, who began his career at Dow Jones as an assistant in the comptroller's department in 1983, will likely be Valenti's lieutenant charged with keeping an eye on the cost center's bottom line.

The emphasis the new organization places on the corporate/consumer side of the fence -- the new Business Information Services group -- may be more significant than any of the rest. The Telerate sports ticker -- which has been isolated from the information services segment -- is now a department whose head reports directly to Valenti. At the same time, the Wall Street Journal's former circulation head, Dorothea Coccoli Palsho, has been installed as head of business information management on the consumer-products side.

Business Information Services also contains Karen Elliott House, responsible for international marketing of the group's services. Sources say House remains extremely influential within Dow Jones outside of the information services business segment, and note that her new presence within it extends her reach significantly.