Interfax News Agency

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Interfax News Agency

1-aya Tverskaya-Yamskaya Ul. 2
Moscow, Russia
Telephone: (07 495) 250 98 4
Fax: (07 495) 250 97 27
Web site: http://www.interfax.ru

Private Company
Incorporated: 1989
Employees: 450
Sales: $98.3 million (2006 est.)
NAIC: 519110 News Syndicates

Interfax News Agency is Russia’s leading independent news agency. Established amid the breakup of the Soviet Union, Interfax has played a central role in providing news and other information services covering Russia, the CIS, and other former Soviet-held or dominated countries. The company’s operations in these regions include offices in all of Russia’s federal districts as well as subsidiaries Interfax-Ukraine, Interfax-West, in Belarus, Interfax-Azerbaijan, and Interfax-Kazakhstan.

In addition, the company operates information bureaus in the Czech Republic, Hungary, Poland, and Slovakia, as well as other Central and Eastern European markets. While Russian and other former Soviet bloc markets remain Interfax’s major zone of operation, the company has successfully expanded its base onto a global scale, opening a network of representative offices around the world, including major offices in Germany, the United Kingdom, and the United States.

In the middle of the first decade of the 2000s, Interfax extended its reach into the Chinese market, establishing its Interfax-China subsidiary there. In addition to its news bureaus, Interfax has launched a variety of market-specific subsidiaries and products. These include the Interfax Center for Economic Analysis, which publishes financial products such as CIS Insurance Companies and CIS Banks; Interfax Corporate News Agency, providing coverage for Russian and other companies in the region, and publisher of SPARK, a database providing extensive coverage of regional corporations; Interfax AVN, which focuses on the security and defense market; Interfax Gas Information Agency (GIA), providing coverage of the Russian and CIS natural gas markets; and Interfax Petroleum Information Agency (PIA), which targets the fuel and energy sector. Interfax has also struck up partnerships with many of the world’s major information players, including the Moody’s Interfax Rating Agency; an investor relations partnership with Thomson Corporation; and distribution agreements with Reuters and Bloomberg. In 2006, Interfax teamed up with the United States’ Experian to launch the first credit history service in Russia. Founder Mikhail Komissar remains head of the privately held company, and is its controlling shareholder. In 2006, Interfax posted revenues of $98 million.

REPORTING ON THE SOVIET BREAKUP IN 1989

Interfax News Agency was born amid the glasnost era, and the liberalization of the Soviet Union’s tight control over the country’s media that broke the monopoly held by official government news agency Tass. The impetus toward the creation of Interfax also stemmed in part from the growing power of then-Moscow mayor and future Russian president Boris Yeltsin. Yet at its start, Interfax itself was formed as part of the government-controlled Gostelradio (State Committee for Television and Broadcasting in the Soviet Union). In 1989, Radio Moscow, part of Gostelradio, formed a joint venture to create an independent news agency in partnership with the French-Italian group Interquadro.

The agreement called for Interquadro to supply the technology, specifically facsimile machines and equipment, while Radio Moscow supplied offices and a pool of journalists. Leading the group was Mikhail Komissar, born in Kharkov in 1953, who had worked as an engineer and an academic before joining the State Broadcasting Committee of the USSR as its editor-in-chief of foreign broadcasting information services in 1985. The name Interfax stemmed from the new company’s strategy of using the relatively novel fax technology to broadcast news items to a subscriber base equipped with machines supplied by the company. In this way, Interfax was able to avoid investing in costly wire services used by other international news agencies.

As the first new and relatively independent news agency in the Soviet Union, Interfax enjoyed rapid success. The company rapidly built up a subscriber list of customers—50 by the end of 1989, 100 by the end of 1990, before achieving exponential growth in the early 1990s. Interfax drew its initial subscriber base from the large diplomatic community in Moscow, as well as the numerous foreign journalists and news and media organizations present in the capital city. The first Interfax News Bulletin was sent out in August 1989, and immediately established the company as a serious source of more or less impartial news and information in the Soviet Union and beyond. The company’s pool of experienced journalists, as well as its own insider status, gave the company access to information and government officials unavailable to foreign journalists. As such, the company’s clientele rapidly expanded beyond the Soviet Union and included a growing number of governments and heads of states, such as François Mitterand of France. The company quickly extended its fax broadcasts, in Russian and English, to three bulletins per day.

From the start, Interfax displayed a willingness to develop a range of specialized products. In October 1990, the company, which then had a staff of just 15, launched a second product, the Business News Bulletin. This was the first such news product targeting the Soviet Union economic and business sectors in the country.

By the end of its first full year in operation, Interfax was described as “indispensable” for foreign journalists covering the collapse of the Soviet empire. The company’s profile was further heightened by a series of scoops that placed it ahead of its chief rival Tass. Soon, Interfax became a major source of news and information for the Soviet Union itself, and was even given its own regular column in the daily newspaper Izvestia —claiming the space formerly occupied by Tass.

SURVIVING A POWER GRAB IN 1991

Yet Interfax’s success came to haunt the company at the beginning of 1991. The end of the Soviet empire had left the country’s media outlets and news agencies scrambling for hard currency. Interfax, which received its payments from customers in hard currency, became all the more an attractive target. In January 1991, Gostelradio—then led by a former Tass chief—made an attempt to take control of its fast-growing subsidiary, cutting off Interfaxes services on January 11. Within hours, however, Interfax moved its offices and by the 12th had resumed its fax transmissions from its temporary headquarters—at the headquarters of the Russian Supreme Council led by Yeltsin. By April of that year, the company had moved to its permanent home, and took up life as Russia’s first independent news agency. Komissar himself then gained control of the company as its largest shareholder; an undisclosed number of the company’s journalists were among the company’s other shareholders.

The scuffle with Gostelradio had the effect of raising Interfax’s profile to a global level. The company signed its first international partnership, with Kyodo News Agency, in February of that year; by July, the company had founded a U.S. subsidiary, Interfax US Ltd. (later Interfax America Inc.) in order to distribute content to that market.

COMPANY PERSPECTIVES

Working for decision makers. Interfax Information Services Group provides news and other information products that are essential for decision-makers in politics and business.

Interfax also profited on its proximity to the ongoing collapse of the Soviet regime, becoming the first to report on the August 1991 coup led by Yeltsin. The company also launched a number of new products, including Diplomatic Panorama Reports, which focused on Soviet foreign policy; the daily Soviet Business Report; and, by the end of the year, the first in a series of specialized weekly reports covering the banking and finance, food and agriculture, and oil and gas industries. Other specialized reports followed, such as the Mining Weekly Report launched in February 1992.

Interfax boosted its international presence that year, opening its European office in London. The company also established an office dedicated to newly independent Ukraine, followed by the opening of its Interfax West subsidiary in Belarus in 1993. By then, Interfax had added a second European office, in Germany, and had formed a contribution partnership with the Dow Jones–Telerate network. The company continued to broaden its product offering, adding the Interfax-Financial Agency in 1993, and the Interfax Petroleum Agency and the Interfax-Eurasia News Agency in 1994. Interfax also set up a dedicated office in Kazakhstan. By 1995, the company was granted the status of an interstate agency for the CIS region, confirming Interfax’s emergence as the leading news agency serving those markets.

By then, Interfax had shifted away from its original fax machine-based services, launching a new joint venture, Interfax Trans Radio Communications Ltd., using FM radio data transmission technologies to broadcast its reports. At the end of 1994, the company launched its first online news services. At the same time, Interfax developed new partnerships, including a long-term agreement with Knight-Ridder Financial Inc. and Financial Times Information.

New products at the middle of the decade included the Argumenty I Fakty newspaper (later Interfax Vremya ), which debuted in 1995; the Interfax Company and Industry Profiles, launched in 1996; the creation of the National Rating Agency in 1997, and the launch of subsidiary Interfax Market & Company News Ltd. in 1998.

INTERNATIONAL NEWS AGENCY IN THE NEW CENTURY

At the beginning of 1999, Interfax took its first step to expand beyond the Russian and CIS markets, opening its first office in Eastern Europe, in Poland. By the end of that year, the company had also opened offices in the Czech Republic, Hungary, and Slovakia. By then, the company had reached an agreement with Reuters, placing Interfax’s content on the world’s leading news service. This agreement was soon followed by a new agreement with Bloomberg Professional, and with Factiva, operated jointly by Reuters and Dow Jones.

Interfax increasingly looked beyond Europe at the dawn of the 21st century. The company launched its first China-focused products in 2000, including the China IT & Telecom Report Weekly and the China Weekly Business Report. The company then opened its own office in China, in Shanghai, building up a team of some 30 journalists to cover that fast-growing market. In 2003, that office launched its own product, the real-time China News newswire in Russian.

Interfax’s position among the world’s news agency leaders was further confirmed in 2001 when the company signed a cooperation agreement between its own rating agency and that of Moody’s Investors Service to focus on the Russian market. The company then set up information agreements with most of the world’s major stock exchanges, including London, New York, and NASDAQ.

Back at home, Interfax made an effort to extend its coverage nationwide, announcing plans to extend its network into all of Russia’s federal districts. The company’s Interfax Urals and Southern Federal District offices opened in 2002, followed by an office in the Northwest Federal District in 2004.

KEY DATES

1989:: Interfax News Agency is formed as a partnership between Radio Moscow (part of Gostel-radio) and Interquadro.
1991:: Gostelradio shuts down Interfax service in an attempt to take control; Interfax moves offices and establishes itself as independent news agency.
1999:: Offices opened in Czech Republic, Slovakia, Poland, and Hungary.
2000:: Subsidiary is formed in Shanghai, China.
2005:: Experian-Interfax credit rating joint venture is established.
2007:: Russian and Azeri-language web portal is set up as part of regional expansion effort.

The company also continued to target specific industries, launching such products as the Interfax Gas Information Agency, set up in 2003 in order to cover the Russian natural gas market. By then, the country’s vast gas reserves placed it as the world’s leading supplier of natural gas. Gas revenues, in turn, were seen as vital for the resurrection of the long-troubled Russian economy. Other specialized information services include the Interfax Religion Internet-based information service, established at the end of 2004.

Interfax entered another new market the following year, forming a joint venture with the U.S.-based Experian to form the Experian-Interfax credit bureau, the first in Russia. That business became operational in 2006, issuing its first credit history report in March. By the end of that year, the company had processed some 500,000 credit searches. Other new partnerships signed during the time included agreements with Thomson Corporation, and another with Business Wire.

Interfax remained committed to building its international presence as well. The company added a press center in Kazakhstan, in 2006, which was followed by the launch of a new Russian and Azeri-language web site in January 2007. Interfax News Agency had successfully grown into one of the region’s, and the world’s, leading information providers.

M. L. Cohen

PRINCIPAL SUBSIDIARIES

Experian Interfax; Interfax AGI; Interfax America Inc.; Interfax AVN; Interfax-Azerbaijan; Interfax Center for Economic Analysis; Interfax China; Interfax FIA; Interfax-Kazakhstan; Interfax International Ltd.; Interfax PIA; Interfax Telecom; Interfax-Ukraine; Interfax-West.

PRINCIPAL COMPETITORS

Reuters Group plc; Hearst Corporation; Bloomberg L.P.; New York Times Company; Dow Jones and Company Inc.; Gestevision-Telecinco S.A.; United Business Media plc; Vocento; United Press International Inc.; Associated Press; Agence France-Presse S.A.