A Conversation with Thomas H. Glocer, CEO of Thomson Reuters

Wednesday, October 6, 2010

Thomas Glocer shares his views on globalization, financial reform, and corporate social responsibility, as well as his own experiences leading a global corporation.

MARK WHITAKER: It's a particular interest to me, as someone in the media business, a recovering print journalist now in television, to be talking to somebody who's in the information business and is actually making $13 million a year. (Laughter.)

THOMAS H. GLOCER: Not personally, I might add. (Laughter.)

WHITAKER: Tom came up through the ranks of Reuters, was the general counsel and lawyer and has run a bunch of divisions, took over at Reuters and then Reuters bought Thomson. He is a graduate of Columbia, as some of you in the audience know, and has a law degree from Yale. And on top of everything else, not that you're busy -- not busy enough, but Tom is also a blogger. He has his own blog.

So I spent the afternoon looking through his blog and so I sort of want to ask a couple of questions based on some of your recent blog posts. Now, he has a very interesting blog on, of all things, Gogol and "Dead Souls," if you all remember that from Russian lit, in which it points out -- he went back and reread it recently -- that Chichikov, the -- I won't exactly call him the protagonist, but the central figure goes around -- this was in the era of serfs -- buying up, sort of, the right to the dead serfs for tax collecting purposes, and compares this to the sub-prime schemes, essentially, sort of creating a kind of an early equivalent of an exotic instrument that was somewhat fraudulent.

So my question is, to begin with, if what we saw in this latest bubble and the subprime crisis and the economic crisis in the last few years is something that you can go back and see in Gogol, and presumably in previous bubbles and a lot of other history and literature, why did the financial press -- both the consumer press, but also professional financial analysts and writers -- not see it coming, and what can be done in your business to make sure that the next time something like this is on the horizon, we see it sooner?

GLOCER: That's a great question. You've worked very hard to connect it back to my blog, which I write mostly to amuse myself and occasionally to make it easier for people to get to know me in what, now, is a very large company, and wasn't, or didn't feel that way to me when I started.

So I have lots of somewhat aleatory thoughts. There did seem to be a parallel to me, and I suppose the parallel is just, human nature hasn't changed greatly from 1830s Russia to the present, nor has the opportunity for I guess what I call regulatory arbitrage. Because that's, in effect, what Chichikov does by going around and buying serfs who have died, but whom he can get 50 percent of face value by borrowing against. And it just struck me as, hmm, that's pretty inventive and doesn't leave much on the table to the modern swaps business. So I just thought that was an amusing parallel.

You ask a much more serious question, which is, of course, you know, how did we all miss it, or what should we have been writing about? And of course, after the fact, you can find people who were writing about it, you know, whether you want to go back to Grant's Interest Rate Monitor (sic) or, more recently, Nouriel Roubini, who's gotten plenty of credit for it, or George Soros had been warning about it.

Ironically, Bob Rubin, who's at the council and, you know, was criticized somewhat after the fact, I always found him in the years leading up to the crisis to be very sane and very sober on the risks building in the international system. So you know, why more wasn't done, it was ever thus, I suppose. But I think there were voices who were trying to be heard.

WHITAKER: And how about going forward in the future? I mean, do you see -- obviously, we have financial regulation and all kinds of things are being done on the policy end. But for journalists and for people who are in the information business on the professional end as well, are there new tools, are there new methods that need to be embraced?

GLOCER: I mean, there are always voices, right? So Pete Peterson has been warning about the risks of the indebtedness of the U.S. consumer, of the U.S. economy writ large for many, many years. Now people are listening because the idea has been embraced and is beginning to, you know, be seen in actual policy debates -- I mean, very live ones -- between more financial stimulus versus the restraint that we obviously know we need to one day start paying it back.

So if, one day, we have runaway inflation and we wake up one day and the U.S. government debt has been downgraded, the question will be, well, did anyone point this out? And the answer is yes, Peterson among others -- and there are others. The harder question is, what does it take to do something about it?

And it's not just the economy. Mike McConnell is here, who's been talking about the threat we face as a society from cyber warfare, and it is clear as day, there will -- there have already been attacks, but there will be a serious one. And the question is only, do we have to wait until that happens to have a response or can we wrap our brains around it and imagine how bad it will be and do something about it before the fact?

WHITAKER: You know, obviously if you're reading Gogol -- and I gather you read a lot of literature in your spare time -- you're someone who continues to have a broad range of interests. So tell us a little bit about, first of all, how someone who has those kinds of interests and presumably could have followed them in other directions ends up in the job that you have, and how useful still thinking about all of those other things, reading more broadly and so forth, continues to be in your job?

GLOCER: I don't know. You know, I've always felt some people are great one-sport athletes. I was never that gifted. I've always sort of tried to make up for it in the decathlon. So I just -- where I certainly don't excel, either -- but I'm just naturally curious. And fortunately, the things I'm interested in, like financial services, technology, the media, science writ large, happen to align very well with what Thomson Reuters does as a mission. And the fact that I used to be a practicing lawyer doesn't hurt when, you know, call it about a third of our revenues comes from the largest legal business in the world.

WHITAKER: Now, in another blog, you talk about going on vacation and turning off all your devices for 14 days. Really? (Laughter.)

GLOCER: Well, I cheat.

WHITAKER: Oh, okay.

GLOCER: My assistant doesn't turn off her devices. (Laughter.) But I do turn off -- I mean, I just disable the data service on the BlackBerry and people have to, god forbid, call me on the phone, send me a fax -- you know, find me some other way.

And I do it mostly -- I have two relatively small kids, 10 and 12 now, and I think there's a certain part of the year where they just deserve to come totally first. And since August tends to be, thank god, a reasonably calm time, often, in our business -- it's not that I don't get reached sometimes about -- you know, I can remember one summer, one of our journalists was killed and it was an awful interruption, the worst kind there can be.

But the difference really is, for me, during those two weeks, that there's not something vibrating or ringing every five minutes. And I find my attention span lengthens and you know, I can pick up Russian literature, which otherwise, I'm sort of scanning like the latest CFR e-mail to see, what time, what time do I have to be there? (Laughter.)

WHITAKER: So what devices do you use? What devices do your kids use? And what does that tell you about where your business is going, both in terms of how the information is delivered, and at a certain point, does how it's delivered shape actually what's going to be delivered?

GLOCER: So I end up writing about this a lot because it, again, interest me and I think we're at such an interesting transition point. And you know, you've made the transition from print to broadcast. And so many people in this town, in New York, all over the world, seem incapable of separating the idea of journalism from print newspaper.

And that always seemed to me to be a false identity. I believe there will continue to be great journalism and great journalists. In the time I've been at Reuters, which is about 17 years now, we've gone from 1,500 to 3,000 journalists. Bloomberg's added journalists as well. We may be among the sort of two only organizations that are adding while most institutions are going the other way.

But I think it's because they can't abstract from what they do and imagine that paper is just an output device, right? It's been a very good output device for many, many years. It's lightweight. It's not that costly. It has high contrast. You can put photos on it and they reproduce, now, pretty well.

But I think we'll also -- or our kids will -- look back in 10 years and laugh at how, economically but especially environmentally, wasteful it is to only print once on a single piece of paper. And there will be an evolution of what we think paper is, just as, at one point, paper was dead animal skin stretched or cave walls or papyrus. There will be an electronic form of paper that will preserve some of its benefits and hopefully take us on to, you know, a new form factor.

WHITAKER: Well, my goal was to get at least five minutes into this interview without mentioning the words "business model," but here we go. (Laughter.) This raises the question of business model. Now, obviously, you have a business model that is based on subscription, which you can charge at fairly hefty rates because you're providing a density and a specificity of information for professionals who need that in real time.

Obviously, what the consumer-sector information sector is struggling with is it's still so dependent on advertising. Do you think that, over time, the consumer sector is going to have to go more in the direction that you've gone on the professional end, and rely more on subscription, or is there still an advertising-based consumer information model that you think is going to be viable in the long term?

GLOCER: I mean, one of the reasons why we have such a good business is that we frankly duck one of the hardest business problems, certainly of current times, which is, how do you get people to pay for content -- for consumers to do it? And in particular, obviously, we care a lot about news. And I think the answer ultimately will lie in a combination of advertising and subscription and some one-off sales. And people are moving that way, through a lot of buzzwords and multiplatform, et cetera.

But you know, for a very long time, I think there's been a huge cross-subsidy. I mean, think about -- I don't know, take the New Yorker magazine. I haven't looked lately what the cover price is. Whatever it is, when you consider the quality of the poetry, the fiction, you know, the real reporting in that magazine compared to what it costs to buy is trivial. And it's been supported by advertising for a very long time.

It's hard to move value once people have been sort of locked into it -- you know, to get them to pay something closer to what it's worth. But there are plenty of people in this town, and I bet in this audience, who think nothing of paying $2,000 a year for a subscription to a newsletter that is particularly focused at, you know, what they do. And that traditionally -- the newsletters traditionally have not been advertising-supported.

WHITAKER: So do you think that even for traditional newspapers and mainstream media organizations, that they're going to have to specialize more and find a way of selling both subscriptions and even advertising to, sort of, specific channels within what they provide, as opposed to, sort of, the old model of aggregation, which, really, we don't need, because you can be your own aggregator these days, right?

GLOCER: Well, I think you can be your own aggregator, and the real issue is, you know, what value do Americans place on receiving news? It's a much easier equation -- you know, if you ask an oil trader, what is the value of a real-time eyewitness account of the number of oil wells I see on fire in Kuwait, that is a very valuable piece of information that they can trade on or invest on.

And they do, and it's one reason why we have a large output for our journalists. And one of the major things we're doing now is developing, in the other professional verticals -- in science and health care, in legal -- a similar sort of current-awareness news component to our services. It is a much more difficult thing.

And this is probably a good thing about American society, that we have not needed, as a people, to be as worried about news, about foreign affairs. I mean, when you think about the average tolerance of Americans for international news or the decreasing percentage that it would take up of, say, "NBC News Today," versus, you know, Brinkley time, the real issue is that we have a large country. We have traditionally not been subject to a lot of foreign threats. And therefore, although some would decry, you know, how dumbed-down it is to only care about Lindsay Lohan and Paris Hilton, you can look at the flipside, which is how wonderful to live in a society that, up to now, has not had to care deeply about some of the economic and war issues that the rest of the world has. I think that's changing.

WHITAKER: Now, you've also been quoted as saying -- and I'm going to put this, perhaps, a little bit more crassly than you put it -- which is that the decline of newspapers is good news for the agency business -- that essentially, as newspapers can't cover so much of the world, they're turning to Reuters, to the Associated Press, and to other agencies. Talk about how that's playing out and what you think the implications of that are for just the quality of information that we get.

GLOCER: Yeah, I mean again, I don't think it's necessarily a wonderful societal development, but what I often say is, a sick patient -- i.e. the newspaper industry -- has been relatively good for us; a dead patient is not good. (Laughter.) So you know, what has happened is -- and you see it all over the country -- just at the time when newspapers have had to figure out how to go onto the Web, because obviously that's got to be an important component of the future, they have had to invest in 24-hour coverage rather than, you know, go to press at a particular deadline.

So there's an implication of, how do you staff around the clock, or who do you rely on to get news that updates around the clock? And now that we all expect there should be video on what traditionally was just a newspaper site, adding a new cost or talent dimension. And the final one is international news. So there was a time when most major New York -- not -- U.S. dailies had large international bureau structures. And they have had to slowly, slowly -- or not so slowly -- close them.

And by doing so, they become more reliant on agency for, number one, foreign news; number two, news that's on a 24-hour wheel and not just goes to bed whenever the deadline of the print paper; and third, as is the case at both AP and Reuters, that we supply video. So that aspect has been good. It's not a runaway, 20 percent growth business, but it's allowed our agency business, other than in the depth of recession, to grow in single digits every year.

WHITAKER: You have another blog that's called, "Harry Potter and the Conflict of Laws," which actually, it's -- Harry Potter comes in because it's based on a speech that he gave at Christchurch, at Oxford, where I guess some of Harry Potter -- the Hogwarts dining hall was modeled after.

But essentially what you talk about in this speech is the fact that the combination of globalization, digitization and conflicting regulation around the world has created a real crisis and that, essentially, we have a whole set of rules around the world for how we regulate the flow of information -- privacy issues and so forth -- that are essentially outdated. And you talk about some of the possible solutions. So could you --

GLOCER: Yeah, I mean, the thought that gave rise to it is sort of the twin thought that just at the time when an increasing amount of commerce is going electronic, as opposed to physical, is also the time where the world would appear to be shifting from a unilateral to a multilateral world. And what is the regulatory implication of that? The U.S., for decades, since the Second World War, has applied its own laws extraterritorially -- antitrust, securities law. Tax law is a good example. So American citizens are taxed on their worldwide income, wherever they live. That's actually very uncommon in the international setup. So the U.S. has gotten used to this idea that its laws extend well beyond the physical boundaries of the country. And by and large, that worked okay in a unilateral world where, frankly, others weren't doing the same thing.

But increasingly, they are -- not just the EU, but you know, China's just adopted an antitrust clearance regime and can be expected to adopt more and more rules that will begin to bump into U.S. and U.K. and EU rules out there. And again, when you go back to, well, how did the law traditionally cope with that, there were established conflict-of-laws principles. We have them among the 50 states.

Internationally, they typically grew out of things that moved. From boats, shipping, you got admiralty law. Airplanes were subject to an international jurisdiction -- you know, flag of carriage versus where the vessel is. But data now flows far more pervasively and seamlessly. So what happens when you go unilateral to multilateral in creating more law, you have far more sort of facts on the ground all over the place dispersed by electronic means, and we haven't yet developed a significant set of more sophisticated tools or organizations.

So how do you -- you know, how do you cope with it? The EU, because they were dealing with bringing together what were fully sovereign states, and now have given up some of their sovereignty, has tackled, probably, more of it. Ideas like passporting -- so if my product has been approved in the U.K., it doesn't have to be reapproved separately in Germany. As a matter of right, I can sell it -- I can distribute it there.

Organizations like the WTO, or before that, the GATT, attempt to create some form of mutual recognition or harmonization. So there are mechanisms to do it, and all I was really pointing out in this presentation was, we need to do this in a hurry, because we're going to find far more clashes and it will accelerate in pace, as opposed to, say, the last 50 years.

WHITAKER: Well, what do you do in an era where, even if you could get the big players to the table -- the state players, the big multinational corporations that have a stake in all of this -- and get them to agree, in the realm of information, they don't necessarily control how information is disseminated now with social media and so forth and so on. How does that complicate the challenge?

GLOCER: Well, I think it does in areas like libel law, and you know, whatever the relevant regime of freedom of expression is and what does it bang into -- one country's version of hate speech or another. You know, I wasn't trying to solve the complete answer; what I was trying to do is get a dialogue going on what are some of the mechanisms.

So one is a form of supernational law. You know, there are internationally binding treaties, and people can agree to a regime where everyone adopts. The trouble is, it takes a long time -- very cumbersome, hard to get folks to agree.

A second is through one or another organization that seeks to align, whether it's the WTO or now, I think somewhat promisingly, how the G-20 and the G-8 have taken up, from other institutions, most notably the U.N., which doesn't seem capable anymore, of playing that role. And then, you know, there are other things -- harmonization, passporting. So there are ways of actually tackling it, but it's got to be, one, a high enough priority at state level to get something done.

WHITAKER: When you travel around the world and you deal with some of the new players in all of this -- the Chinese, the Indians and so forth -- what is your impression? I mean, how helpful do you think that they are prepared to be?

GLOCER: Well, I think it's -- you know, it varies very much topic by topic. So right now, obviously, the issue of the day or of the week is, you know, sort of currency war breaking out, as I guess coined last week by the Brazilian minister, and what concerted pressure can be put upon the Chinese to, you know, liberalize the exchange-rate policy? My somewhat-off-the-cuff reaction to that when asked, you know, when did I think the Chinese would liberalize the regime, my answer's always been, six months after the U.S. stops asking them to do it. (Laughter.)

You know, the deeper issue is that I don't think that currency realignment alone is going to do the trick, because it's not going to suddenly magically create a generation of consumers in China, which is really what's needed. Those consumers are not irrationally saving money, right? Until there is a social safety net, a means, in a one-child family, of having an assured -- you know, some form of social security retirement savings and some form of medical savings -- it's not irrational to save a lot.

And arguably, they're saving even more than they need to because of a risk premium. So yes, it would be very helpful if we could have currency realignment, but we also need to help the Chinese sort out these larger societal programs, because otherwise, we're not going to get the huge consumption that we expect of whatever we wish to export to them.

WHITAKER: Now, you raised the issue of clarity and obviously, the other thing that I think is a big topic of conversation right now in Washington is the fact that business, despite the fact that their balance sheets are very healthy as a result of the bailout and the help they've gotten from the government since the financial crisis, is sitting on that cash and is not spending it.

And they're not spending it, they say, because of all the uncertainty out there about tax law, about the effect of the health-care plan. Now, in your verticals, you have professionals who are looking at those areas all the time. From your perspective, do you think it's still -- those areas are still too uncertain, that what Congress has produced in the last two years is just too complicated for business to figure out and to plan on, going forward?

GLOCER: You know, I think that's an aspect of it, right? It is an incredibly difficult environment to make longer-range investment plans in. We continued, over the last couple of years, to invest in large, new product platforms, in part because we were already started on the endeavors and in part because we knew that whether the markets turned up or not, in which case we'd have to just fight for market share, we needed to invest in the future of the company.

And in fact, despite the fact that we merged these two companies and did eliminate some jobs, overall, the head count of the combined company has gone up substantially over the last couple of years as a result. I think a sort of deeper issue that people don't talk about is that over the last 10 years, really, the growth in -- for businesses have come from two sources. One is leverage, which has obviously added to the riskiness of the economy with the disastrous effects we've seen.

The other is, it's been a productivity gain. You know, more and more of the success of U.S. business has been based on deploying technology, and some of the world's best technology that's still created here, to creating this sort of jobless growth. Andy Grove wrote a very interesting piece over the summer -- I'm not sure it got wide play -- in which he debunked the idea that the answer to all of our problems was in the miraculous startup environment of, let's say, California, or generally in the silicon world.

Because he said, look, the problem is not that we don't start lots of companies here or that the first 100 employees aren't in Menlo Park. The problem is, we no longer scale industries here. Look at -- you know, where are the Facebook employees? Where are so many of the new jobs being created? They're American companies but they're scaling up on a global basis.

And I think that's the overriding challenge of, what do we want to make in this country and how do we create a society that isn't so bifurcated between a thin elite, which gains all the benefits of productivity, and everyone else, who's sort of watching and saying, my life hasn't gotten any better over the last 20 years?

WHITAKER: I'm going to open it up to the Q&A in a second, but I want to ask you one last question, which is about your foundation, which I gather, among other things, is focused on training. And you know, I think that's great from the point of view of social responsibility, but do you worry at all that you're training the people who are going to come and compete with you and cause you trouble? Because in this day and age, you know, you don't have to be in the information business -- you don't have to stay in a big company. You can go out there and start the next Facebook.

GLOCER: Yeah, I mean, we don't worry about it. And if that happens, that happens. And if it weren't from us, it would probably happen some other way. I mean, the Thomson Reuters Foundation's dedicated to do three things. One is journalist safety and journalist training, which we've always cared deeply about. Two is promotion of the rule of law around the world, which is not only, we think, a very good thing generally; selfishly, it also benefits a company which provides more legal research materials and systems than anyone else.

And the third is disaster relief. And what we try and do in our foundation is not just throw money at issues, although we do a bit of that, too, but try and use the same skill set we have in the company to amplify and accelerate the efforts of others. So for example, we run a service called AlertNet, which allows -- think of it as an electronic clearinghouse for NGOs and others.

If you're responding to a disaster -- let's say Pakistani floods -- and you're a pharma company willing to donate a couple of pallets of antibiotics, how do you find out who's got a plane going in, who will insure it, what are the logistics on the ground, who's got trucks to the area? It's an electronic sort of marketplace, but rather than being destined for profit, it links up humanitarian efforts.

And we think by doing that -- and it costs some money, obviously, to run it and store it and maintain it -- we can do more than just writing a check, which we'll do as well. But this sort of captivates and means more to our own people.

WHITAKER: Okay, well, we'll do a piece on NBC the next time there's a big natural disaster. That sounds fascinating.

Okay, questions, stand up, identify yourselves. Obviously, I think you can figure out that this is on the record with all these cameras around here. (Laughter.)

QUESTIONER: Roger Parkinson (sp). I have two questions that are related. One is, with the purchase or merger, or however you want to characterize Thomson Reuters, is there something significantly different, as a company, than just an amalgamation of the parts and eliminating some staff? And second of all, what's your strategy for competing successfully against Bloomberg, and do you have any significant competitive advantages against them?

GLOCER: Sure. Well, I'll start with the second one. Customers want choice, right, whether it's in financial markets or legal markets or what we do in health care or science. No customer wants to be reliant on a sole source. And I think innovation, for the whole marketplace, benefits from having tough competition.

There is no question in my mind that the markets division at Thomson Reuters is a better company and a better competitor today than it would otherwise have been without the admirable entry by Bloomberg. It is a little bit difficult when I go inside my own company and say, you should be thankful we have such a strong competitor. Because we all -- you know, there are days where we'd all like to have it easier.

But the truth is, you know, I don't think British Airways would be anywhere as good a carrier today -- and they certainly weren't in BOAC and BEA days -- as they are now, thanks to Virgin. And I've always found it miraculous that on Asian routes, the American airlines can manage to do pretty decent service because the standard of competition is so great. So it's just a reality and actually a really good thing. And we have a whole bunch of differentiations between us, but I won't bore everyone else with them.

On the first question, I guess the point I would draw out from what was very clearly an acquisition by Thomson Corp. of the venerable Reuters is, a lot of people get into a lot of trouble in business by using mealy-mouthed words that make them feel better. So, you know, my favorites are "merger of equals," "best of both," you know, "two plus two equals five."

WHITAKER: "Synergy."

GLOCER: Right. And it's great at the time, you know, makes everyone feel a little bit better, but the trouble is, you can't run anything that way. A military couldn't run a campaign that way, and people shouldn't run companies like that, either.

So I disappointed a lot of folks, certainly on the traditional Reuters side, by being very clear that what went on was an acquisition of Reuters followed, coincidentally, by a management succession, where I was lucky enough to go and run the combined company. And that's made things a bit easier, culturally. And there's been quite a quick coming together of the two, to the point where we really don't think anymore of, oh, you came from this side or that side. And frankly, the cultures were pretty similar, or more similar than different.

QUESTIONER: Is it different than just an amalgamation, though? Has it emerged? Is there a different kind of strategy of viewing the world, or is it just put the pieces together and manage it?

GLOCER: I'd say there is a broadening of the strategy. In some ways, it's become clearer and simpler because, you know, Reuters essentially had one-and-a-half businesses: financial services and a wholesale media agency. And now what we do is supply information and software to professionals wherever they need it to do their jobs and are willing to pay for it in law, in tax and accounting, in science and health care, in energy, in media as well.

And that means there's a sort of common thread that runs through the business. And when we talk about intelligent information, it's not to arrogantly say that hey, we're the only people who write anything that's smart, in the sort of two-dimensional sense that let's say an article hopefully is intelligent, if it's written by a Reuters reporter, but we actually are trying to give what I call a 3D version of it.

So information has to be intelligent when it can be consumed by machines or agents for human beings, which means it comes with a data model. It comes bathed in metadata. It says, hi, I am this piece of data destined for this-sized object to view it or that sized, or I can tell what size the display is and reformat myself. And in that sense -- that's the sense that we sort of call ourselves an intelligent information company.

WHITAKER: Ma'am? Just wait for the microphone.

QUESTIONER: Hi, Tom. My name's Debbie Zabarenko. I'm a correspondent for Reuters. I'm also the head of the newspaper guild unit at Reuters. And as Tom knows, as you know, we're in a dispute right now with the company and it's been very acrimonious. Without going too much into that today, I want to -- and I'm really heartened to see your commitment to corporate social responsibility. That's a good thing. That's something that we share -- and your obvious pride in what we produce in the markets division. That's where the journalists are. That's where I am. And that's a pride that I share, too.

But we're very troubled by how you might square corporate social responsibility with the current company policy, now that we're in this acrimonious dispute, of cutting effective compensation to more than 400 journalists in this country, in which you have so much obvious pride.

GLOCER: Sure. Well, look, I don't want to sort of drag everyone else here into it, but you know, I do think I should respond directly. And you know, this is what I really believe: It's 400 employees out of 55,000 around the world. It comes down, in the end, really, to money.

We -- there have been -- I have to be careful what I say because there are issues as to what I can say that's maybe going on right at this moment, or over the last 48 hours, that I'm aware of, and what I can't say publicly -- but you know, my position is, if you're in the guild or not in the guild, you should have the same retirement plan and the same health benefits as everyone else. There has been flexibility shown by the company on money issues.

There will be no flexibility on, hi, this group of people have a different health plan or better benefits. And I recognize that lots of people are coming from other regimes where they've had better retirement plan, better health plan, et cetera. That was also true of a lot of the general population that, when we put through changes in plans as a result of the merger, and I just don't want to create a wedge between the person next door has these benefits and the person next door doesn't. And the rest is just money.


QUESTIONER: Yeah, Steve Charnovitz at George Washington University. I have a much easier question. (Laughter.) We have, in Washington, the Federal Register that people can -- NGOs, businesses look at every day and see what opportunities there are for notice and comment to agencies. We don't have anything like that at the international level

International organizations are increasingly, on their own website, asking for comments for reports and things that they've done. The World Trade Organization has even done that recently. But there's no way than an NGO or a business can, at one point, scan what's going on around all international organizations around the world and see what the opportunities are and where they can make comments. I'm wondering, is that a product that Thomson Reuters might be able to do?

GLOCER: Well, the honest answer is, I've never thought of it, but I bet there are people in the company who have. And you know, I could think that there actually would be a demand for it. I mean, much in the way that we publish a Washington daybook of, you know, who's Secretary Clinton seeing today, et cetera, there might actually be a demand. So we'll take a look. It's a great idea.

QUESTIONER: Corbett Daily, I'm a correspondent at Reuters, as well. I have a non-guild question, although I second what Debbie said. At the outset of this, you talked about why we, in the financial press, didn't write it. And you said, it was ever thus. That's basically saying, well, that's sort of the system.

I was reading some stuff from Charles Ferguson, who has this new documentary, "Inside Job," and he's basically -- his basic point is that he's very shocked that nobody's been prosecuted criminally, and he thinks that people should have. And I'm wondering if you agree with him, even if some of them maybe are clients? (Laughter.)

GLOCER: Well, you know, look, we wouldn't -- first of all, nobody particularly cares about what my personal opinion is one way or another. If people break the law, they should be prosecuted, right? I mean, I think that's a national government position; it's not a personal or a company one. I think the problem is with this particular crisis, it's very difficult to prove -- you know, let's take an example like the fall of Lehman Brothers, which was pretty much the epicenter.

Lots of experts, after the fact, people looking at issues of corporate governance and, in particular, remuneration, have said, well, we've got to change on the rem plans so that the people at the head of banks take more of their compensation in stock, that they're required to hold that stock. The irony is that the two institutions on Wall Street that had the highest employee sort of stock-retention requirements were Bear Stearns and Lehman Brothers. And Dick Fuld, who, you know, may have made many other mistakes, the one mistake he didn't do was sell stock. He went down with a billion dollars of his own stock. I don't think he intentionally tried to create that.

Now, every prosecutor worth his salt, federal and at the state level, has been probably trying for the last couple of years to bring that suit. And so far, no one has. Doesn't mean they won't. And I don't have an opinion one way or another. I just think it's a very hard, sort of, example to find who is the culprit and what did they do.

QUESTIONER: Hi, Esther Lee, U.S. Department of Commerce and a former journalist. Having lived through the AOL's acquisition of Time Warner, curious as to your thoughts about the future of the media industry and whether you see more mergers, perhaps with Internet companies or maybe media companies splitting up? And maybe, Mark, you can comment a little bit about that, being at NBC Universal.

GLOCER: Well, I guess -- I think the distinction of media versus Internet company was captured by that wonderful image of Steve Case wearing a tie and Jerry Levin not, right? And that was the moment in time where it mattered. That was at the same time I'd go visit our banking clients and you know, people would give me a business card that said, I'm head of Internet banking, or I'm head of the e-commerce group.

And I always wondered, you know, 100 years ago, did somebody at JP Morgan have a card that said, hi, I'm head of banking using electricity? And the other one -- I'm using indoor plumbing? (Laughter.) It just becomes a pervasive part of the infrastructure that we rely on. So I think there will continue to be mergers in part -- or acquisitions because it's often easier, for all the reasons that have been written so much about, to innovate outside of big companies.

I actually think there will continue to be a media business and that actually, there will be journalism as well. I am not pessimistic about the future of journalism. I think there are some real interesting and difficult issues about, how will societies pay for the journalism they feel is needed to maintain the sort of level of an informed electorate. That's a real tough set of issues -- luckily, you know, ones we tackle more on the foundation's side than on the day-to-day business side. But I don't have a magic potion for that.

WHITAKER: The only thing I would say is I think that there is going to be increasingly a distinction I think in the world of journalism and information in general between the people who, on an individual basis or small-group basis, can go out and get information that is readily available and the kind of investment it takes to get either a deeper level of information or to do certain technological things like we can do in television, covering live events and so forth.

And I think that for those companies to stay strong enough to be able to afford to continue to do that, I think there is going to have to be, probably, a little bit more consolidation. That you're going to have fewer and fewer media players, sort of, in the middle being able to make those kinds of investments. And I think you see that already with the shakeout in the newspaper business.

QUESTIONER: Hi, Patrick Dwyer, former Reuters employee now doing startups in the D.C. area. I'm actually curious what you think is the ongoing role of human-in-the-loop analytics and actual consumption of data in all of your verticals, versus many of your acquisitions in the last couple of years about machine-generated news, machine-generated data. Do you think there is a growing or shrinking role for human-based interaction, human-based analytics?

GLOCER: Well, I haven't, you know -- I haven't gone --

WHITAKER: That sounded like a really interesting question, but could you translate for the rest of us exactly what he asked? (Laughter.)

GLOCER: So there have been a bunch of experiments -- and we do some of them, as well -- with, can you automatically generate news stories. The easiest thing to do is, a company issues a press release. You have some sort of scraping technology that sucks it in, puts it in your format and kicks it back out as a story. It's also not worth a lot more than just reproducing, if that's all you do, reproducing the story itself. With a certain level of story, you can actually begin to add some value by, for instance, putting in the relevant quote and linking it to a graph or former stories, or there's an associated photo. So there are some things that you can do electronically without --

WHITAKER: This is sort of algorithmic editing, right?

GLOCER: Right. Now conversely, there's a -- we provide a product to the financial services industry called machine-readable news, and there are traders who will take in a news feed from us, which has a set of algorithms which sentiment-score it.

And literally, the easiest way to think of it is, if there's a given story and it says, "surprise, positive, outperform," you can assign a numerical rating to the more positive emotions in there, subtract out the negatives and come up with a mathematical model of something that was written by a human being, never thinking it would be parsed by a computer. And you know, traders will take any edge they can, and people are doing things -- and not just with our content -- we productize it.

Now back to the question. I still think human editors -- I mean, in my perfect world, I would have a single editor who did nothing other than write the daily me, and would not only do some of the, you know, searching to find everything that I say I'm interested in, but would have that marvelously human effect that I still haven't seen a computer do, which is the serendipity of adding in -- you know, you would never ask me to program an agent to look for this, but because of my experience and knowing you, et cetera, I'm going to surprise you, and I bet when you see it, you'll want to read that.

And I think that's a very human quality, and you know, maybe one day when Turing tests have been passed by the most sophisticated algorithms, you can simulate serendipity. But I won't be alive, probably, by then. (Laughter.)

WHITAKER: The corner?

QUESTIONER: Sunday (ph) Bridget Jones from the State Department. So the administration has placed an emphasis on Internet freedom in particular, looking at circumventing technologies and safe access to information for folks overseas in places like China and elsewhere. Is there something that this -- that particularly the department is missing in this that we should be looking more carefully on? You had talked in particular about the importance of rule of law for the Reuters Foundation, but should we be looking at something else?

GLOCER: Well, it just so happens I've just come from a meeting, off the record, with a legal advisor who used to be the dean of Yale Law School.

WHITAKER: Nothing is off the record, by the way.

GLOCER: Oh, no, that meeting was; this isn't.

WHITAKER: Oh, okay.

GLOCER: But you know, you have one of the deepest thinkers anywhere on these issues. I think it's laudable that the U.S. government thinks and cares about those issues. I think technology -- and the Twitter example in Iran is one, but not the only.

You know, Chinese dissidents have gotten very sophisticated about the use of proxy servers and the ability to get information from, you know, around the great firewall in China. And you know, there will be times when governments can attempt to choke off access to information and they probably can be successful. The North Koreans do a pretty good job with their own people, but not forever.

And the interesting thing we've found -- and you get a different perspective when you run a 200-year-old company than maybe a startup -- is if you go around the world and go to the countries that have had the most repression and then find freedom, those tend to be the ones who respect press freedom more than anywhere else. So the Reuters brand is stronger in South Africa, stronger in Eastern Europe than perhaps anyplace else, because they actually value and cherish what that means.

QUESTIONER: Thanks for coming to speak to us. Hi, Joe Hurd with the Department of Commerce. We're living in an age of the Internet and cable TV, where content distribution is highly fragmented and atomized, and consumers have a lot of choices where to get their content. Can you share some thoughts with us on the importance of building and maintaining a brand? And can you see a day in the future there the brand doesn't matter and the best content simply rises to the top?

GLOCER: I think the answer is contained in your question. Certainly now, brand is more important than it's ever been. And brand isn't all a bad thing, right? It's not just these evil people on Madison Avenue concocted a brand and forced us to buy things. Brand also comes from a long reputation for doing the right thing, right? So that reputation can also be lost quite easily.

And so typically, institutions like ours go to considerable lengths in journalism training, in hiring really good people like some of the people who are here today, and in creating an environment in which principles apply. You know, we have rules, for example, about what you can and can't do in editing and transmitting a photo. And that's important. We have had episodes around the world where those standards have been violated.

And those are threats to our brand, and if we did nothing about them, at some point, we would lose the trust that's in the brand. At the moment, you're right, with the ability to find a multiple of sources everywhere, yeah, you can use technology to search around a particular theme. But brand is still a very important beacon, I think, and ever more so today.

WHITAKER: You've been waiting very patiently.

QUESTIONER: I'm Mitzi Wertheim with the Naval Postgraduate School. This has been a fascinating session for me. I want to ask you about Andy Grove's article. At the end of the article, he said some things that really caught my attention. One was that if you look at what's gone on in the past -- if you look at what's gone on in the past, free market clearly outdid the planned economy. But he went on to say, neither of them are serving us well today, and perhaps we need something moderate, in between, and then finally said what he thinks we need is a jobs economy.

Now, when we have somewhere between 15 and 30 million people, depending upon who you listen to, and the numbers keep going up, what is your view of these ideas of rethinking some of these sort of hard-and-fast rules about how things ought to be done? My own perception is that in the 21st century, all the -- the rules that we used, whether it was in economics or teaching political science or in the way we were doing medical stuff, or even government rules, processes -- they don't seem to work terribly well today. So how do we get into a 21st-century set of processes?

GLOCER: Well, I think, you know, this is often coming up in the debate of, which system seems to work better today: China or the U.S.? And you know, we've marveled at the speed with which they were able to create and apply stimulus spending to the economy, how they were able to spend it -- you know, they seem to have billions and billions of shovel-ready projects, which happen to align with things like new infrastructure, genomic research, et cetera.

So I think there is an interesting debate that goes well beyond the role of Thomson Reuters on, have we reached a point where there is such a complete dissemination of information, which, when coupled with a two-year election cycle, puts us at a relative disadvantage in terms of essentially doing policy that lasts longer than an election cycle? The Chinese famously think in very long periods of time and are able to -- you know, look what's going on right now.

So there will come a point in, I don't know when, three years, five years, when we'll wake up and realize that most of what's worth buying in Africa has already been bought while we've been busy prosecuting a couple of wars. Not that that's not an unimportant thing to do, from where we stand today, but that's what somebody who's thinking 100 years down the road can do, versus somebody who's thinking, what do the polls look like at the midterm election?

And with all those imperfections, and as well as it appears that the Chinese system has worked today, it also produced the Cultural Revolution and Mao and some great disasters. So we probably should take a longer-term view of which system, on average, over a thousand-year period, delivers the results for its people. And I agree, I think we're going through a difficult time, in terms of the seeming inability of the system to do it. But I wouldn't sort of rewrite the playbook right now.

WHITAKER: Tom, I have one last question. Is there anything you're not interested in? (Laughter.)

GLOCER: Snooker. I lived in England for almost eight years and I have zero interest in snooker. (Laughter.)

WHITAKER: Well, I feel like with all the things you clearly are interested in, we could go on forever, but we've reached the end of the discussion for this evening. But thanks so much. It's been fascinating. (Applause.)

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