Bloomberg L.P - Early History

When Harvard Business School graduate Michael Bloomberg was fired from Salomon Brothers Inc. in October of 1981, he began to explore the idea of establishing his own business. Bloomberg had worked in equity trading and sales for Salomon Brothers, where he eventually was named general partner. Bloomberg also spearheaded efforts to create an in-house computerized financial system there. It was while working for the securities trader that Bloomberg first saw the need among Wall Street firms for a more sophisticated method of gathering and analyzing information.

In March of 1982, Bloomberg sold off his Salomon Brothers stock and used the fresh capital to create Innovative Market Systems (IMS). He hired a team of computer programmers to begin developing an electronic information system that would grant users access to real-time securities market data via a desktop terminal. In December of that year, Merrill Lynch became IMS's first customer by ordering twenty terminals on the condition that IMS not market the machines to any Merrill Lynch competitors for five years. Impressed by the technology's potential, Merrill Lynch also bought a thirty-percent stake in IMS for $30 million.

IMS launched the Portable Bloomberg machine in 1984. By pointing out that increased sales would up the value of Merrill Lynch's stock in IMS, Bloom-berg convinced Merrill Lynch to lift the five-year sales restriction, freeing IMS to begin widespread marketing of its terminals at a price of $1,500 per month for a single terminal, and $1,000 per month for additional machines. IMS focused on marketing its technology to pension funds, central banks, mutual funds, insurers, and other "buy side" firms. Bloom-berg changed his company's name to Bloomberg L.P. in 1986 and increased its user base by selling terminals to securities underwriters, trading firms, and other "sell side" firms for the first time.

International expansion efforts heated up in 1987 when the firm opened offices in both London and Tokyo. Global growth continued in 1989 with the launch of an office in Sydney, Australia. An office in Singapore opened in 1990. Bloomberg moved into Germany in 1992 by establishing a unit in Frankfurt and established a Hong Kong office in 1993. Eventually, the company established units in Brazil and India, and by the end of the 1990s, its customers spanned more than 100 countries.

Technological developments throughout these years also fueled the firm's growth. For example, a new securities trading feature allowed the firm to launch the Bloomberg Trading System in 1988—an electronic bond trading system that made the company a player in the electronic commerce arena before the term e-commerce had even been coined. The firm also launched the Bloomberg Traveler, which allowed subscribers to access Bloomberg information from remote locations. The 10,000th Bloomberg terminal was installed in 1990. Enhancements such as color monitors and video training materials, as well as e-mail and multimedia capabilities, came in the early 1990s.