How the Bloomberg terminal built a fortune
Michael Bloomberg's wealth comes from the company he founded after leaving Wall Street. In 1981 he was let go from the investment bank Salomon Brothers when it was acquired, and he used his payout from the partnership to start a business called Innovative Market Systems. His idea was to give traders and investors a computer system that combined live market data, historical prices and analytics in one place, something banks then pieced together from many sources.
The investment bank Merrill Lynch became the first major customer and an early investor. The product, later known as the Bloomberg Terminal, became a standard tool on trading desks around the world. It is sold as a subscription, which gives the company steady recurring revenue. The firm was renamed Bloomberg L.P. in 1986.
In 1990 the company launched Bloomberg News, initially to provide news for terminal users, and it grew into a global newsroom. Television, radio, magazines and websites followed, and in 2009 Bloomberg bought the weekly magazine Businessweek. Bloomberg bought back Merrill Lynch's stake in 2008, and he owns a large majority of the private company, which remains the source of his fortune.
Inside Bloomberg L.P.
The company's main businesses include:
- The Bloomberg Terminal: the core subscription product, with market data, news, analytics, messaging and trading tools
- Bloomberg Media: news, television, radio, Bloomberg Businessweek and digital publications
- Enterprise data and software: data feeds, index products and tools for banks and investment firms
- Trading and regulatory services: electronic trading platforms and services that help firms meet reporting rules
Bloomberg L.P. is privately held and does not publish detailed public accounts, but the terminal remains its main source of revenue. The Bloomberg messaging system on the terminal has become a key communication network for traders and bankers.
Because Bloomberg owns most of the company, its success translates directly into his wealth. He has run it at different times as chief executive and chairman, stepping away when he entered public office and returning in 2014 after leaving City Hall. Day to day management has since passed to other executives, while he remains the majority owner.
Early life, Salomon Brothers and City Hall
Michael Rubens Bloomberg was born in February 1942 in Boston and grew up in Medford, Massachusetts. His father worked as a bookkeeper for a dairy. He studied electrical engineering at Johns Hopkins University, graduating in 1964, and earned an MBA from Harvard Business School in 1966.
He joined Salomon Brothers after business school, starting in the vault and moving into equity trading. He became a general partner and later ran the firm's information systems. When Salomon merged with Phibro in 1981, he was pushed out, an event he later described as the spur for starting his own company.
Bloomberg entered politics in 2001, winning the election for mayor of New York City shortly after the September 11 attacks. He served three terms, from 2002 to 2013, after the city council changed the term limit law to let him run a third time. His administration was known for public health measures, including a smoking ban in bars and restaurants, as well as education reforms and major rezoning. In 2020 he ran for the Democratic presidential nomination, spending heavily from his own funds, and withdrew in March of that year.
Bloomberg Philanthropies and causes
Bloomberg is among the most active philanthropists in the world. He signed the Giving Pledge and directs most of his giving through Bloomberg Philanthropies, which works on public health, the environment, education, government innovation and the arts.
Public health has been a long running priority. The organization has funded tobacco control programs in many countries, road safety projects, and efforts to reduce drowning and obesity. Johns Hopkins University, his alma mater, has received his largest gifts, including support for its school of public health, which now bears his name, and a very large donation in 2018 to make admission at the university need blind for undergraduates.
On climate, Bloomberg Philanthropies has funded the Beyond Coal campaign in the United States and Europe and programs that help cities cut emissions. Bloomberg has served as a United Nations special envoy on climate and clean energy, and he has paid the US share of costs for the UN climate secretariat when federal funding was withdrawn. He also supports cultural institutions in New York and elsewhere and programs that train city leaders and mayors.