(FORTUNE Magazine) – In July, Tom Glocer will become the first American, first nonjournalist CEO in the history of Reuters, the 150-year-old British news giant. He will also be the first to have written a piece of software; the first to have used "XML" properly in a sentence; the first to be dubbed a "geek" by the press (and the first to be proud of it); the first to fly regularly to Redmond, Wash., to talk tech with Steve Ballmer; and (probably) the first to do a decent rendition of rapper Jay-Z's "Hard Knock Life." ("He raps better than Warren Beatty," insists longtime friend and record executive Steve Gottlieb.)

In short, Glocer is not the type of guy you'd expect to be running a strait-laced, old-guard British institution like Reuters. No one in England seemed to think so, either. When Reuters in December announced that it had named Glocer, then head of its operations in the U.S., to take over from retiring CEO Peter Job, the Financial Times headlined GLOCER APPOINTMENT BREAKS WITH 150-YEAR MANAGERIAL HISTORY. A former Reuters executive told me that Glocer was "not part of the old-boys network." And the old boy himself, Sir Christopher Hogg, Reuters' chairman and 17-year board member, conceded that Glocer's appointment was a "generational shift in the leadership of the company." So why is technology know-how trumping tradition? Because at Reuters right now, the Net is the headline, the lead, and the kicker.

In a four-year effort set to end in 2003, Reuters will spend a total of $800 million--more than last year's operating profit--transforming itself into an entirely Net-based company. This means more, much more, than just sending its stories out over the Web. News alone is a small, barely breakeven chunk of Reuters. More than half the company's $5.3 billion in revenues comes from providing real-time quotes, OTC pricing, data on futures contracts, Treasury benchmark curves, and just about every variant of financial information to banks, insurance companies, and brokerages around the world. (The rest of the revenues come from Instinet, its soon-to-be-spun-off electronic brokerage, and a new-media division.) Right now that information is carried over Reuters' proprietary system of dedicated lines and servers that connect to 558,000 users around the world. But not for long.

When Glocer completes his current mission, customers will be able to get those services--and a host of new ones like secure instant messaging--over any Net connection: through their desktops, laptops, Palm Pilots, mobile phones, and whatever else comes down the road. By converting the analytics, charts, and graphs to XML, Reuters should be able to merge its information seamlessly with other sites and software packages. If things go right, no banker, trader, or money runner will be able to escape the Reuters system, no matter what device he has on his belt and no matter where he's traveling around the world. Reuters already has three times as many users as its nearest competitor, Bloomberg. By converting to the Net, the company thinks it can make the gap grow even larger.

Which is how Glocer earned his new corner office at Reuters' posh Fleet Street headquarters. When it comes to the Net, Glocer gets it. He's widely credited as the main architect of the company's Internet strategy, and for the past year he has been running its overhaul. But what's happening here goes way beyond converting code. And is much riskier. "Reuters is reinventing itself," says Anthony De Larrinaga, an analyst at SG Equity Research. He points out that with creating new products for the Web comes the danger that Reuters will cannibalize its old business. But that's a risk Glocer is willing to take. He believes Reuters needs the Net to survive and thrive for the next 150 years.

It's a sunny February afternoon in New York City, and in a few hours Glocer will board a plane to move to London. For a guy who's about to relocate to a new country and take over the world's largest and oldest financial-information company, he's remarkably relaxed. Legs stretched out in front of him, sipping water from a Poland Springs bottle, he laughs about a warning from his PR guy that Reuters is in a quiet period. "I think he's worried that I sort of violate the rule of quiet period--it's almost incomprehensible to think of me as ever being in a quiet period," he jokes, smiling broadly.

A slim and athletically built 41, Glocer is no socially backward computer geek. Charming and laid-back, he's as full of self-deprecating jokes as he is of talk about the benefits of XML and instant messaging. Among friends, he's famous for throwing a yearly summer bash on the terrace of his Manhattan apartment and for randomly reciting hip-hop lyrics. He's a lawyer by training, and his knowledge of technology is mostly self taught. As a student at Yale Law, after taking a few college computer classes, he wrote a software program to simulate litigation. "Tom is something of a legend at Yale Law," says Richard Roberts, a fellow Yalie, now a Goldman Sachs vice president. "You'd go to the computer lab, turn on the screen, and his name would flash up." Every few years Glocer still tries his hand at writing a new program. "I wrote some HTML code a couple of years ago, mostly just to, you know, prove to myself that I could still do it. I'm sure it was awful code," he says. "I did it to just play around and stay a little more current and, you know, to understand the inside jokes my friends were sending around about HREF this and HREF that."

In many ways Glocer is a throwback to the birth of Reuters, when Julius Reuter created a company devoted to delivering bits of information around the world using the fastest technology available. That was 1850, and the technology was a fleet of 45 carrier pigeons. The birds took two hours to deliver news and stock prices between Brussels and Aachen, Germany, beating the railroad by six hours. The pigeons are gone, but Reuter's founding philosophy has stayed. And these days the fastest technology available is the Internet.

Indeed, for a company like Reuters, the Web would seem an obvious next step. After all, it's a cheaper, faster, better way to move data around. But the Web was no easy sell within Reuters. The company's current proprietary system works well--very well, actually. Even better than the Web, some may argue. Every second Reuters' proprietary system sends out one million quotes in real time on 165,000 equities, 541,000 bonds, and over 150,000 derivative products, from 263 exchanges in more than 100 countries. It stores 2.4 million equity-research reports covering 28,000 companies, and nearly one million news stories generated out of 181 bureaus. All this gets picked up by 558,000 computers in 151 countries around the world. On this system Reuters has built up a business that last year earned 18% pretax margins by selling its information to the likes of Merrill Lynch, Goldman Sachs, and Morgan Stanley, which pay upwards of $10,000 a year per Reuters connection.

So not surprisingly, for many within Reuters, ripping up the old system didn't exactly make sense. "The old guard believed Reuters had achieved essentially what it had been expected to achieve," says Geert Linnebank, the editor-in-chief of Reuters News. "Tom had an alternative vision of what the company might become."

Glocer began pushing Reuters toward the Internet almost as soon as he joined the company as an assistant general counsel seven years ago. One colleague remembers a management meeting in 1995 when Glocer "kept going on about this thing called the Internet." Later, when he'd been promoted to run Reuters' Latin American business, he pushed the company to invest early in Web companies--Patagon.com in Argentina, Universal Online in Brazil, and StarMedia in Mexico. At the same time he also helped Reuters start a new-media business to sell its stories on Websites. Reuters' work now appears on 1,400 Websites worldwide, from Yahoo to Sina.com.

But it wasn't until 1999, when Glocer was overseeing Reuters' information division and its North and South American operations, that he began proselytizing for a complete overhaul of the Reuters system. It was the height of Internet fever, and Reuters, like just about every company in the world, knew it needed to come up with a plan for dealing with the Web. Glocer was the chief table pounder. "What Tom did was to articulate the urgency of it," says Devin Wenig, president of Reuters Information. Glocer, displaying a few traits that he has picked up from the British, won't take full credit for the project, conceding only, "I was the dirt in the oyster."

Glocer's arguments were based not on technology but on pure business. Simply, the Net would shave costs and boost revenue. When Reuters now makes a sale, it sends out a technician to hook up a dedicated communications line and install Reuters' software--and, in some cases, servers--at the customer's office. It's an expensive, labor-intensive process. Allowing customers to plug in directly over the Web eliminates all that. Indeed, Reuters estimates that moving to a platform based on Internet protocol will cut its costs by $150 million a year. On the sales side, Glocer argued that an open system would let the company reach customers who were too small, too far away, or too limited in what they needed. With access to Reuters costing companies hundred of thousands of dollars, the company's market is limited mostly to traders at big banks and insurance companies. For the most part customers get a Henry Ford-like choice of services: all the quotes, the analytics, the charts, the tools. Or nothing. With an Internet platform, Glocer says, Reuters would be able to design customer-specific products--say, a tool that delivers only foreign-exchange information or credit-markets data. Since these offer less information and would be accessible over the Web, they would cost Reuters less to produce and would therefore be priced cheaper. That would open up new markets. Smaller fund managers, small-company CFOs, back-office analysts, even private investors--essentially anyone who needs real-time financial data--will be able to afford Reuters' information in some form or another. Its only other big global competitor, Bloomberg, which has a strong following among traders, isn't offering products designed specifically for those niche markets. Currently Bloomberg has no plans to slice and dice its services, nor is it moving off its own closed system: "We continue to pursue the strategy that has made our company a tremendous success," says a spokeswoman.

By February 2000, what Glocer calls the "seeping correctness of the right idea" won out. Reuters announced to the world that it would be shifting its network to the Web and putting Glocer in charge of making it happen. Much of Reuters was used to deadlines and working with real-time information; Glocer brought that pace to the executive level. He created an internal task force code-named Project Gazelle, charged with launching a series of Web-based products within the first year. To speed up the bureaucracy, he set tight deadlines for his staff. Team members were expected to map out what they expected to accomplish every 100 days. Glocer posted these projections on the company's internal Website. "It was getting people to think, 'I've got this looming deadline, and I've got to go back to Tom and say this is what I did and this is what I didn't do,'" he says. "Initially I got some resistance. People said, 'In 100 days I can't give you a finished product. Rome wasn't built in a day.' To which the answer was: 'Right, but during the first 100 days, the Roman army came up with a plan for the plumbing inside the Coliseum--show me that.'"

One year into Reuters' Web overhaul, Glocer has made headway. Over the next few months the company will begin rolling out its first series of Web-based products that can be paid for and accessed via the Net: Reuters Credit Market is a customized database of ratings information, news, and benchmarks on credit risk aimed at credit managers; Reuters Markets Monitor allows users to customize the information they receive based on geography and type of security--say, Indonesian debt or Brazilian swaps. Later this year Reuters will launch an instant-messaging system, created with the help of Microsoft. Designed specifically for the investment community, the program will give traders, brokers, and bankers a completely secure system on which to send instant messages to their customers and record and store those messages for auditing and regulatory purposes. By the end of the year, Reuters will also have its first customer--brokerage house Raymond James--using its new platform.

Still, Glocer has a long way to go. Who knows if customers will really pay up for Reuters' cheaper Web products? Or if they do, will that erode Reuters' traditional big-bank business? Indeed, cannibalization is the biggest risk Reuters faces in this endeavor. After all, its big customers may decide they want cheaper, limited versions of Reuters as well. But for Glocer the fears that come with new technology outweigh the dangers of ignoring it.

On the day that I visited him in New York, he picked through the memorabilia accompanying him on his move. "Here's a Reuters telegram from the 1860s reporting the execution of Emperor Maximilian," he says, pointing to a framed clipping on one wall. Beneath it is a confirmation slip for the first foreign-currency trade between the U.S. and Mexico over Reuters' system. "UBS traded $2 million worth of Mexican pesos with Banco Bilbao Vizcaya in Mexico!" he exclaims. Then he picked up perhaps his most prized knickknack: an old, worn-out Quotron keyboard. Once a staple on every trading room floor and a formidable Reuters competitor, Quotron is now defunct. "When I was growing up, Quotron was almost the only name I knew in quote machines," Glocer says, gingerly holding up the keyboard. "What killed Quotron is that they failed to invest in technology aggressively enough. They stuck with that same [machine]." Carefully setting it back down on the windowsill, Glocer adds, "I keep that as a souvenir." And as a reminder of what he won't let happen to Reuters.

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