American politician Michael Bloomberg (born 1942) first gained renown as chief executive officer of Bloomberg L.P., the immensely successful financial data services and news media company.
Bloomberg was elected mayor of New York City in 2001, and during his second term rumors swirled that he would make a bid for the White House as an independent candidate in the 2008 presidential race. Buzz Bissinger, writing in Vanity Fair, called him “one of the most intriguing mayors the city of New York has ever had, in a boatload of bizarre and baffling and brilliant ones—not only because he's the first billionaire ever to hold the office, or the least popular, but also because, in his own idiosyncratic way, he's effective.”
Born Michael Rubens Bloomberg on February 14, 1942, the future Wall Street media baron grew up in a lower middle class household in the Boston area. His father, Bill, was a bookkeeper, and his mother, Charlotte, was one of a minority of American women of the era who had earned a college degree. They were also a Jewish family in a city not known for its tolerance of ethnic groups outside of the white Anglo-Saxon Protestant model. In the late 1940s, Bloomberg's parents decided to move to a neighborhood closer to Bill's job in Somerville, just adjacent to Cambridge. They found a house in Medford, a city located on Somerville's other border, but the seller was reluctant to become the first person on the block to sell to a Jewish family. “And so he sold it to my father's Irish lawyer, who resold it to my father at the same table,” Bloomberg recalled in an interview with Newsweek's Jon Meacham.
Earned Harvard M.B.A.
At Medford High School, Bloomberg earned good grades, if the subject interested him, and he also attained the rank of Eagle Scout within the Boy Scouts organization after completing its demanding requirements. He went on to Johns Hopkins University, reportedly becoming the first openly Jewish member of the school's Phi Kappa Psi fraternity chapter, and earned his bachelor's degree in electrical engineering in 1964. He then went on to Harvard University for a graduate business degree. After completing his course of study there, he applied to the Officer Candidate School of the U.S. Armed Forces in 1966, at the height of the Vietnam War, but was rejected for having flat feet, or fallen arches.
Bloomberg went to work on Wall Street instead, joining the investment bank Salomon Brothers Inc., a major issuer and trader of bonds on the U.S. and international markets. At the time, Salomon was known for its meritocratic culture—meaning that the company hired and promoted based on talent and drive, not old-money or Ivy League connections, as was the case with many Wall Street investment banks. Bloomberg's first job was as a trading room clerk for a $9,000 annual salary. “It was a pretty lowly start for a Harvard MBA,” he wrote in his 1997 autobiography, Bloomberg on Bloomberg. “We slaved in our underwear, in an un-air-conditioned bank vault, with an occasional sixpack of beer to make it more bearable. Every afternoon, we counted out billions of dollars of actual bond and stock certificates to be messengered to banks as collateral for overnight loans. By the 1980s such practices would be as quaint as the horse-drawn carriage.”
Bloomberg eventually became a bond trader, and was made a partner in 1972. By 1976, the year he married an English woman, Susan Brown, his title at Salomon was general partner in charge of equity trading and sales. A rising star known for coolly risking enormous sums in trades that nearly always proved profitable, Bloomberg was surprised in 1979 when he was given what appeared to be a demotion to director of the firm's computer operations division. Electronic trading was still in its infancy, and the job was not as prestigious as his previous title. However, Bloomberg determined that Salomon's in-house system had some flaws, and he went to work on designing a new one. In 1981, however, the privately held investment bank merged with the publicly traded Phibro Corporation, a commodity trading group. Bloomberg was let go with a $10 million severance package from Salomon, which he used to launch his own computer systems firm in October of 1981.
Launched Own Company
Bloomberg originally called his company Innovative Market Systems, and it landed its first major client in Merrill Lynch, another top Wall Street firm. Working with a team of just four employees, Bloomberg designed and programmed a stand-alone computer terminal that let Merrill Lynch traders keep up-to-date on the Treasury bond market. The company expanded to develop a proprietary computer system that provided current bond and stock prices, and could also perform the notoriously complex government bond calculations.
In 1986 Innovative Market Systems became Bloomberg L.P., and its computer system was becoming a ubiquitous presence on Wall Street. The company contracted with investment banks and brokerage houses to supply them with the so-called Bloomberg Terminals, computers that provided access to current market prices and allowed users to execute on-the-spot trades. There was a hefty initial set-up charge, followed by a monthly fee per terminal. With more and more Wall Street firms using the terminals, and monthly user fees for each one that soared to $1,500 per month, Bloomberg became a millionaire several times over with his privately held company. He reinvested some of the profits in the early 1990s in media properties such as radio stations, creating the Bloomberg News Service. It, too, became a giant in the industry, and together the two properties became the world's largest financial news and data company.
By most accounts Bloomberg was a maverick boss, who ordered the chairs in the main conference room removed so that meetings did not drag on interminably. There were no doors to offices at the company's headquarters, nor official titles, and he expected the same long hours of work from his employees and managers that he himself put in. But by the late 1990s he had emerged as one of New York City's most generous new philanthropists, donating heavily to such institutions as the Metropolitan Museum of Art. Through the private foundation he set up, he also began giving millions to his alma mater, Johns Hopkins University; at the Harvard Business School, he endowed a professorship named in honor of his father, the William Henry Bloomberg Professorship, reserved for academics who specialized in philanthropic and nonprofit ventures management.
Long-Shot Mayoral Candidate
In late 2000 Bloomberg switched his longtime political affiliation from registered Democrat to registered Republican in order to give him a better chance in the following year's mayoral race in New York City. The Democratic field was historically a crowded one in the primary race, and Bloomberg won the public support of the city's outgoing mayor, Rudolph W. Giuliani (born 1944), a Republican. Despite that endorsement, few considered Bloomberg a serious contender. “His gifts on the stump were minimal: He was brusque, infelicitous, maladroit, utterly unvisionary,” wrote John Heilemann in New York magazine.
New York City's Democratic and Republican mayoral primaries were scheduled for September 11, 2001, and were halted after just a few hours of polling when two airliners hit the towers of the World Trade Center and the city descended into chaos. As Heilemann noted, suddenly “the mood of the electorate darkened. What voters wanted now was an equable hand to keep the economy afloat and the city from unraveling.” The primary was rescheduled, and Bloomberg bested his nearest Republican challenger, former Bronx borough president Herman Badillo (born 1929). In the weeks leading up to the election, Bloomberg set a new record for New York City mayoral campaign spending at $74 million. He beat the Democratic challenger, the city's public advocate, Mark J. Green (born 1945), by a margin of two percentage points.
Bloomberg was inaugurated mayor in January of 2002, taking office at a time when New Yorkers were still traumatized by the events of 9/11 and the city was plunging into a steep economic decline that took the national economy along with it. Some of the new mayor's acts were popular, others were widely loathed: he found funding for thousands of new, affordable housing units, but also raised property taxes and wrested control of the city's ailing public school system from the Board of Education. He was commended for his handling of the East Coast blackout in August of 2003, and admired for accepting a mayoral salary of just $1 a year, but he was reviled for enacting a ban on smoking in the city's restaurants and bars. At many of Bloomberg's public appearances during his first term—especially in the more working-class boroughs of Queens, the Bronx, and Staten Island—he was jeered and booed. In his home territory of Manhattan, however, he was a popular leader, and could often be seen riding the subway to his City Hall office every morning.
Early on, the city's tabloid newspapers dubbed Bloomberg “Mayor Gloomberg,” and Bissinger theorized that the mayor might be a victim of what he termed “the Bloomberg Paradox, almost the inverse of” former U.S. president Bill Clinton (born 1946), a two-term Democrat. “While Clinton seemed to be all style and no substance, Bloomberg has substance but his style keeps getting in the way,” Bissinger explained. “Much of the time he is unable to give the appearance of caring even when he presumably does, delivering bad news in such a bloodless hall-monitor buzz-saw drone that it often sounds worse than it already is.”
Despite these failings, Bloomberg was reelected in 2005 and his approval ratings began to rebound. At times as low as 24 percent in his first term, the public opinion numbers rebounded and began to hit the 70 percent mark. Long rumored to have ambitions for a much higher office, Bloomberg seemed to give confirmation to the talk of a White House bid when on June 19, 2007, he formally resigned from the Republican Party. Declaring himself a political independent instead, Bloomberg refused to confirm or deny rumors as the year wound to a close, and with it his final year as New York City mayor (mayors are limited to two terms).
Remained Cagey about Plans
Some political pundits theorized that Bloomberg would not officially declare himself a candidate in the 2008 presidential race until March or April of 2008, explaining that unlike most candidates, Bloomberg could draw on his vast personal fortune—estimated by Forbes magazine at $11.5 billion in 2007—to finance a run that could cost up to $500 million; other presidential candidates must start their campaigns much earlier in order to raise that kind of money from supporters. As the uncertainty over a Bloomberg presidential run continued, Bloomberg reiterated that his focus remained on the stewardship of New York City, although he did tell Meacham that he believed the nation needed new leadership. “One of the sad things is that at the moment America is not liked around the world,” Bloomberg reflected. “We have this view that we can do it alone, as we are getting more into a world where you can't.”
Bloomberg and his wife, Susan, divorced in 1993, but remain on cordial terms and have two grown daughters, Emma (born 1979) and Georgina (born 1983). His mother, Charlotte, born in 1909, still lives in the same Medford house they bought in 1947, and the mayor reportedly phones her every morning before he leaves for work. Reflecting on his own background and achievements, he told Meacham, “I've been very lucky …. My academic record was never stellar, but it wasn't a disaster, either. I am a believer in what I learned in seventh-grade civics: I really down inside believe that everybody in this country has an opportunity—America is built around this premise that you can do it.”
(With Matthew Winkler) Bloomberg on Bloomberg, John Wiley & Sons, 1997.
Newsweek, November 12, 2007.
New York, December 11, 2006.
Vanity Fair, December 2003.
Michael R. Bloomberg runs Bloomberg L.P., one of the world's largest financial information, news, and media companies. Considered an industry mogul by most accounts, Bloomberg is best known for parlaying his financial information services upstart into a billion dollar media giant that competes with the likes of Dow Jones, Knight-Ridder, and Reuters. Despite Bloomberg's initial reluctance to compete on the Internet—a medium he viewed as targeting a much more general audience than the one his company served—his firm's Web site, launched in 1995, became one of the most frequently visited financial information sites on the Internet. In 2001, Bloomberg resigned as chairman of his firm, and ran successfully for the office of mayor of New York City. His term was expected to begin in 2002.
A native of Boston, Massachusetts, Bloomberg graduated from John Hopkins University in 1964 and from Harvard Business School two years later. He spent many of the early years of his career working in equity trading and sales for securities trader Salomon Brothers Inc., where he eventually achieved general partner status and headed up the development of an in-house computerized financial system. Salomon Brothers fired Bloomberg in October of 1981. After pocketing millions of dollars by selling off his Salomon Brothers stock, Bloomberg considered founding his own company.
Five months later, he established Innovative Market Systems (IMS) and put together a team of computer programmers to develop something he believed Wall Street sorely needed: a computerized information system that would grant subscribers, mainly Wall Street firms, access to real-time securities market data via a desktop terminal. In 1983, Bloomberg and his partners unveiled the first such machine to Merrill Lynch, which agreed to order 20 terminals and pay $30 million for a 30-percent stake in the fledgling information provider. Bloomberg's timing proved fortuitous. Ready for electronic access to the kinds of financial information Bloomberg was peddling, other major firms began signing up for the terminals. Bloomberg changed his company's name to Bloomberg L.P. in 1986.
Perhaps Bloomberg's keenest move in growing his company was convincing the New York Times to publish Bloomberg Business News articles with the Bloomberg byline in exchange for providing the newspaper with a free terminal. By 1992, Bloomberg had secured a similar deal with every major newspaper, virtually guaranteeing his firm's name recognition among financial news readers.
By the end of the 1990s, Bloomberg was publishing magazines and producing radio and television shows. The company also was operating a Web site with live broadcasts and an electronic trading vehicle, and making its information available over mobile devices like pagers. By placing real-time financial data at the fingertips of securities investors, Bloomberg not only launched a successful business, he also played an instrumental role in the industry's increasing reliance on online mediums. His firm's success in the twenty-first century, according to several analysts, depends on how Bloomberg handles competition from two fronts: the deluge of financial information increasingly made available for free on the Internet (a medium Bloomberg discounts as too unreliable to become a major threat) and the cheaper versions of Bloomberg-like information provided by competitors Reuters and Bridge Information Systems.
"Bloomberg Anticipates No Threat from Internet." AsiaPulse News. June 29, 2000.
"Bloomberg Steps Down." United Press International. March 6, 2001.
Dolan, Kerry A. "Bloomberg for Sale?" Forbes. September 18, 2000.
Spiro, Leah Nathans. "In Search of Michael Bloomberg." BusinessWeek Online. May 5, 1997. Available from www.businessweek.com/1997.
SEE ALSO: Bloomberg L.P.; Bloomberg U.S. Internet Index