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October 20 1997
BUSINESS NEWS
Reuters to reveal computer timebomb exposure
BY FRASER NELSON
REUTERS, the business information giant, will this week reveal its exposure to the computer millennium bug that threatens to affect millions of machines in the year 2000.
The company is understood to be preparing a comprehensive audit detailing what it must spend in order to clear out faulty software. The information is expected to accompany its third-quarter trading figures on Thursday.
The company is expected to send out information to all its clients about measures that can be taken to avoid computer failure.
Reuters has admitted that its Series 3000, the newest and most advanced of its information products designed as its latest weapon against Bloomberg, a rival, could be badly affected by the bug. Peter Job, chief executive, has told shareholders that the company views the matter as "a very serious issue with wide ramifications".
Many of its rivals, however, have said they are in the clear. Dan Wagner, who is negotiating a £260 million merger between his MAID company and Knight-Ridder Information, said neither company would have to deploy any extra capital or staff to address the problem.
He has dismissed the bug as "a lot of hype which will make a lot of money for computer consultants".
Reuters is badly placed because it supplies clients with a computer and modem, magnifying its exposure to hardware problems. MAID, by contrast, allows its system to be accessed through any computer with a modem and restricts its hardware costs to the master database.
Analysts said the company's refusal to specify its exposure was beginning to create nervousness. One said: "The nervous sounds coming from Reuters management has done nothing to inspire confidence in how they will handle it. If companies like Safeway can admit it's going to cost them £40 million, we can only guess at what Reuters is going to be in for."