COURT-ORDERED CHANGES IN THOMSON REUTERS MESSAGING SERVICE PERK UP COMPETITION

Posted August 11, 2008

NEW YORK – Thomson Reuters's replacement of an outside component of its messaging service, required by a court ruling in a dispute over its contract with the component's provider, proved seamless, according to a company spokesman. But that has not deterred competitors from perking up to wave their own flags.

Thomson Reuters replaced the disputed technology from FaceTime Communications Inc. in its Reuters Messaging service with its own Reuters Messaging Compliance Manager (RMCM), which it started developing in early 2008, according to Joe Christinat of Thomson Reuters.

The ruling by the US District Court for the Southern District of New York required removal of the FaceTime components by August 1, and Reuters complied on July 29, says Christinat.

"Nothing ever left compliance; there were no complaints; and the end users didn't even necessarily know this was being done, although the technology people did by seeing the coding," he says. "We started running parallel lines using both RMCM and FaceTime on July 27 and by July 29 took everything and everyone off FaceTime. FaceTime only did a portion of our collection storage and long-term archiving of instant message data."

The change in the Reuters Messaging service makes it a "one-stop shop," says Ed McDonnell, Managing Director at Pivot Inc., the provider of a competing instant messaging solution, Pivot 360. "There are alternatives in the marketplace," he adds. "Pivot can not only integrate through a partnership with FaceTime, but also seamlessly integrate in existing compliance environments at most Wall Street firms."

Pivot has a greater end-user focus, according to McDonnell. "We're focused on making sure that the technology can exist within existing compliance architectures and environments, as well as connecting directly to other platforms to satisfy those compliance and regulatory issues," he says. "Where Reuters might have gotten caught up here is they were trying to be one solution for all things. What Pivot does is focus on the end user, providing value tools, and then working with IT infrastructures to satisfy their requirements as well."

The court effectively upheld FaceTime's contention that Reuters did not renew its license with FaceTime after its expiration on January 31, and that subsequent efforts to renegotiate the contract failed. FaceTime also had expressed concern that Reuters would duly remove and replace its technology.

"While we are pleased that FaceTime's intellectual property rights are protected, we are concerned about Reuters's timetable for installing replacement technology in light of its representations to the court as to its ability to provide adequate compliance protection for its customers," says Kailash Ambwani, President and Chief Executive Officer of FaceTime Communications.

Thomson Reuters says it will continue to offer hosted compliance service to securely log and maintain all types of Reuters Messaging traffic, including instant messages and chat room conversations to help its customers meet regulatory requirements while mitigating business and legal risks with long-term archiving.