Track Data Takes Option To Buy Timesharing Service From Hard-Luck Hale Systems

Track Data Corp. has taken an option to buy the market data timesharing business of struggling Hale Systems, Inc. If the deal goes through, it will put Track into the low-end consumer dial-up business as well as beef up the company's historical pricing capability.

The option calls for Track to port Hale's database and software from Hale's Burroughs host in Palo Alto to Track's Data General host in New York. Once that's complete, Hale will throw a new marketing effort behind the revamped service. How well that goes will determine whether Track will exercise the option and how much it will pay. "I think it will probably end up around a million dollars," says Track president Barry Hertz.

Hale's market data timesharing business has been dwindling since it lost its major customer, Merrill Lynch & Co., over two years ago (MTR, November 1985). It now has about 2,000-3,000 "very low end" individual customers, says Hertz. In recent years, Hale has consistently lost money and seen its revenues shrink by half, from $8.6 million in fiscal 1985 to $4.1 million in fiscal 1987. In its latest quarter, the company lost $498,000 on revenue of $786,000. Hale's chief business is defense contracting.

Why does Track, which provides a potent professional quote service popular among options traders, want to be in dial-up timesharing with the likes of Compuserve and Dow Jones and Warner Computer? "It's a natural follow-on business to our business in that we've got all these computers here doing nothing in the middle of the night," says Hertz. "I should be able to generate revenue and see a lot of it go down to the bottom line."

More important, however, is the asset represented by Hale's historical database. "Through this we are going to get 15 years' worth of historical data," says Hertz. "That's going to add a lot of value to my existing Marketrack users." Hale's database is cleaner and more extensive than Track's, which only goes back about 5-6 years, he says.

The database conversion process should take about 3-6 months, Hertz says, and Track also plans to enhance Hale's PC software for accessing the database and manipulating the data. "If we're happy with it then we'll exercise the option," he says. "It adds value and it doesn't cost us a lot of money to deliver."