The cause of Reuters' trouble

Its financial difficulties are the result of severe recessions in other areas.

First and foremost among its customers are investment banks, fund managers and brokerages.

Firms in all three areas have found their businesses substantially reduced during the bear market, as investors have grown increasingly wary of holding shares.

The investment banking industry alone - which accounts for a third of Reuters' revenues - has axed 100,000 jobs during the past two years.

And that means a substantial reduction in sales of financial data - Reuters' core business.

Burst bubble

It has also been hit doubly hard by the technology revolution.

On one hand it was forced to spend a lot of money developing products for the latest gadgets, offering products such as data services to handheld computers and mobile phones.

On the other hand, competitors started offering competing data much more cheaply - often for free - via the internet.

Historical data about company share prices is now available, for example, from the London Stock Exchange website.

And the proliferation of internet news has forced Reuters to offer for free content that was previously subscription-only.

The firm's management also misjudged an expensive investment in an electronic trading platform, Instinet.

Bloomberg triumph?

But Reuters' woes cannot be attributed solely to market forces beyond its control.

Bloomberg has won a substantial slice of the market for providing financial data previously dominated by Reuters.

The company, set up by Michael Bloomberg - now New York City mayor - is privately held, making it difficult to assess how it is coping with the difficult market conditions facing Reuters.

But anecdotal evidence from the City suggests Bloomberg is becoming the favoured tool of traders and financial institutions.