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/ By Albert Hecht /
Bloomberg, now approaching the halfway stage of his third consecutive term as Mayor of New York City has always been known for having an eye for the future. With a net worth of around $27 billion accrued as founder Bloomberg L.P., the global financial data and media company, Micheal Bloomberg is now putting together a new venture, under the title of Bloomberg Beta. With an initial investment of $75 million, the company has been put in place to provide financial backing for internet startups.
Bloomberg Beta is not the first example of Michael Bloomberg’s desire to help fledgling companies. In the past Bloomberg L.P. parent company of Bloomberg News among others, has seen fit to invest seat capital has put it’s in technology companies on their outset. Bloomberg also holds a limited partnership in venture capital, Andreessen Horowitz, who in the past have made some wise investments in start-up technology companies with Facebook and Twitter been particularly outstanding examples
However the formation of Bloomberg Beta marks the first time that Bloomberg L.P. stand to directly earn any form of profits from direct investments that they make, with the investment ideas coming from information expected to be provided by technology reporters working for Bloomberg News.
While the news of the new venture has been greeted mostly with enthusiasm in business circle, it has raised a number of questions relating to the basic issue of journalistic ethics. Anticipating these issues a spokesperson for Bloomberg News hasten to point out that the company would adhere to existing rules within the company relating to conflicts of interest. Rules which forbid the company to report favorably or unfavorably on company products or services. In the few cases where Bloomberg reporters cover companies or investment firms in which the Beta has a financial investment, that fact will be clearly disclosed in disclaimers.
Already academics in the field of journalism have not been slow to point out that the formation of Bloomberg Beta is liable to cause some credibility problems at Bloomberg News. It may bring about the situation in which Bloomberg’s reporting staff will not only be liable to uphold the highest standards of standards of accuracy and activity, but also more intensely scrutinized for evidence of self-dealing and self-interest, a situation which can be toxic to any news organization.
Meanwhile a spokesperson for the new Bloomberg Beta operation had insisted that the company will be operated as a totally separate legal entity from their parent company, who will also be their sole investor.
With the caller of the US high-tech industry based on the West Coast of America, Bloomberg Beta will initially be based within the offices of Bloomberg News in San Francisco, where, as a matter of coincidence, many of their leading technology reporters are also based.
Given the task of heading up Bloomberg Beta will be Roy Bahat, who came to the job with a lot of experience after working for a number of years as CEO of IGN Entertainment, an online media company owned by Rupert Murdoch’s News Corporation. Working in close cooperation with Bahat, will Karin Klein, previously head of Bloomberg’s new initiatives, who will be in charge of Bloomberg Beta’s operations on the East Coast operations. Making up the -core management trio in the early stages of operation will be James Cham, who will be joining the company from Trinity Ventures, a venture capital firm.
Relating to the question of possible conflicts of interest Roy Bahat replied “If an entrepreneur wants Bloomberg Beta’s money because they think they’ll have a higher chance of getting more positive cover from a Bloomberg journalist, than they should refuse to accept an investment from us.
Great pains were taken to set up so that it would have confidentiality protections in place.” “The way a Bloomberg reporter should regard me or any other representative of Bloomberg Beta should be in the same light that they look at any other outside investor or entrepreneur, ” Bahat concluded.
With Michael Bloomberg taking a passive role in the running of the company, Daniel L. Doctoroff his partner and co-founder and currently chief executive of Bloomberg L.P.’s, announced that for a long time the company had been, looking for a window into the world of start-ups.
In the last few years Bloomberg has been conspicuously expanding their level of news coverage in the field of technology, headhunting some prominent reporters and editors from the field. In the last few months Bloomberg News has doubled the number of programming hours set aside for Bloomberg West, a television news show specializing in providing up-to-date information from the world of high-tech. The station regularly provide in-depth interviews with leading executives from the field of technology with start-up founders like Jack Dorsey, co-founder of Twitter and Elon Musk, co-founder of PayPal recently appearing.
So far Bloomberg Beta has already made investments in four start ups, Nodejitsu, whose specialty is cloud computing, Errplane an application designed for monitors app performance, Codecademy, a Web site established to provide online tutorials on coding as well as Newsle, a Web service that alerts users to news about friends.
Roy Bahat did admit that an innovation such as Bloomberg Beta would have been an impossible dream even a decade ago. However its formation, and others like it, are testament to a growing number of individuals such as Michael Bloomberg to foster the growth of innovation, and is prepared to put their money where their mouth is to ensure that potentials are realized.
Michael Bloomberg was born and raised in the Brighton neighborhood of Boston. Bloomberg attended Johns Hopkins University, from where he graduated in 1964 with a Bachelor of Science degree in electrical engineering, going on to study at the. Harvard Business School where he gained a Master of Business Administration degree.
Bloomberg embarked on his professional career at the Wall Street investment bank and securities brokerage Salomon Brothers after graduating. In 1973, Bloomberg was appointed to the role of general partner, where he headed the equity trading department. In 1981, Salomon Brothers were taken over and Bloomberg was laid off , and handed a generous $10 million severance package . That sum was enough to see him form his own company in which he spent the next twenty years as its Chairman and CEO, before stepping down to become Mayor of New York City.