The Internet may be sounding the death knell to some information providers. Companies such as Bloomberg, Bridge Information Systems and Reuters have traditionally relied on selling their proprietary news and analysis to research companies, financial institutions, large and small corporations and media companies.

However, increasingly, much of that information can be obtained free on the Internet. Combined with tighter corporate budgets there is more pressure on a company such as Bloomberg to justify the cost of its proprietary terminals.

Michael Bloomberg, founder and chief executive officer of Bloomberg L.P., is concerned that he is losing business to the Internet. He realises that he may have to move his service on to the Internet to hold on to his customers.

Mr Bloomberg made his name several years ago when he was a partner at Salomon Brothers. In 1981, he was asked to cash out his partnership and was given $10 million (£6.5 million). What he did then has revolutionised the delivery of information in the US and internationally. He built his own computer program and leased it to brokers.

He wanted to give them relevant information instantaneously and used computers to store that data making it easy for them to access that information. This became known as the Bloomberg box.

Now he earns $200 million a year by leasing the Bloomberg box. The box contains information on 65,000 corporations, drawn from 800 different data sources. Users pay $1,640 a month for one box, $1,225 each for more than one.

Mr Bloomberg said recently at the Financial Technology Expo in New York that in the 1980s customers spent freely on several different terminals. "Now we have to justify ourselves," he said. "We have to sell, add value and hand-hold our customers."

Bloomberg, which has 4,500 employees and expects 1998 revenues to come to $1.6 billion, can still grow, its founder said. In fact, the company is growing by 30 per cent a year. Nevertheless, he said, Bloomberg will probably have to begin delivering information over the public network.

The Internet is a good communications device, Mr Bloomberg conceded.

Bloomberg, the company, used solely to focus on the financial markets. There was not a trader or broker on Wall Street who could do his job without having a Bloomberg terminal at his desk.

But other companies like Reuters and Bridge have spent millions updating their systems also to provide real-time financial news and analysis and the Internet has spawned many start-up companies doing likewise.

Now, Bloomberg is moving into general news information and Mr Bloomberg has said he wants to create a news service to rival the New York Times and Wall Street Journal.

He often distributes his boxes free to newspapers so that each time they use a Bloomberg story, the company is given credit. This way he gets to distribute his product without paying for distribution costs.

The intention is to provide a 24-hour news service on demand through television, radio, telephone and through its terminals.

Mr Bloomberg maintains that in the news business, context, trend and analysis are what makes sense. He believes that with increased competition and more 24-hour news from around the globe what will differentiate companies like his is customer service.

"Customer service is the only thing that will matter in the next couple of years," he said. He's annoyed that he did not focus enough on it in the past.

Mr Bloomberg said information companies will only do well if they can explain why the service being bought is worth the money being charged. He sees some commercial sense in moving to the Internet.

One way to make money from the Internet, he said, is through subscription fees. The most successful example, he pointed out, is the Wall Street Journal Interactive edition which has more than 200,000 paid subscribers at $49 a year. Companies like Bloomberg and its competitors Bridge and Reuters could do something similar, he said.

A less promising approach, he said, is to sell advertising on a website. "Prices are plummeting for Internet advertising because the click-through rate - the measurement of how many people click on an ad for further information - is virtually zero".

Though the Internet lets advertisers track and measure how users examine adverts, he said, "the outlook for advertising revenue for all these Internet companies is not great".

As for electronic commerce on the Internet, "the danger is that someone else can come along and build something that your customers want," Mr Bloomberg said. At that point, he said, competition switches to comparisons of customer service, reliability, ease of use and price.

So for someone who is saturating the world with information by electronic means, he also believes in the traditional paper approach, witness his book Bloomberg by Bloomberg and the numerous magazines he publishes.

Throughout all media, his overriding belief is that "information is power" and there are multiple ways to deliver that information.