Agence France-Presse

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Agence France-Presse

3, place de la Bourse
75002 Paris
France
Telephone: +33 1-40-41-46-46
Fax: +33 1-40-46-32
Web site: http://www.afp.com

Private Company
Incorporated: 1835 as Agence Havas
Employees: 1,400
Sales: FFr 1.4 billion (US$233 million)(1999)
NAIC: 51411 News Syndicates

Agence France-Presse (AFP) is the world’s oldest news agency and one of the world’s top three, behind the United Kingdom’s Reuters and The Associated Press of the United States. Unlike its publicly traded rivals, AFP remains largely controlled by the French government, along with a number of its top media clients. In this capacity, AFP’s operations are restricted by a series of requirements first legislated in 1957, such as precluding opening the company’s shares to private investors and a requirement that AFP present a balanced budget for each year. These two restrictions, in particular, have limited AFP’s ability to raise the capital needed to invest in new products and outlets, including the Internet, and to compete head-to-head with its wealthier rivals. Nonetheless, AFP maintains an unsurpassed reputation for the integrity and independence of its reporting. The company’s 200 photographers, 1,200 reporters, and more than 2,000 stringers, located in over 160 countries, allow AFP to offer more extensive coverage than its competitors. Each day the company distributes more than two million words in French, English, German, Spanish, Portuguese, and Arabic. Moreover, AFP is the leading supplier of news and images to the Asian, African, and Middle Eastern regions. Through subsidiary AFX News, AFP also offers specialized coverage of the world’s financial markets. Its archives of seven million photographs, dating back to the 1930s, is one of the world’s largest. AFP operates editing facilities in Paris, Hong Kong, Cyprus, Montevideo, and Washington, D.C. Under the new leadership of Eric Giuily, named CEO in 1999, AFP has focused on pressing for changes in the rules surrounding its corporate status, pertaining particularly to allowing the company to take on private investment capital. In 1999 AFP broke a long tradition when it hired a non-French editor-in-chief, Eric Wishart, a Scotsman.

Founding a News Service in the 19th Century

In France, the liberty of the press was first guaranteed under Article XI of the Declaration des Droits d’homme, published in 1789. With this guarantee, the country saw a sudden jump in the number of newspapers and periodicals available, with some 1,500 appearing in just six months of that year. While the press suffered a series of setback in the rocky political climate of the early 19th century, a number of technical developments had made printing easier, cheaper, and faster; the printed press was more widely available than ever before. As the technology for distributing newspapers developed, a need arose for new sources of news and information, not only on a local basis, but on a national and even international scale.

Charles-Louis Havas founded his Agence Havas in 1835 in order to provide this information for France’s newspapers, periodicals, and magazines. The creation of an agency devoted to news gathering and dissemination marked a first worldwide and was soon emulated in other countries, leading to the development of Associated Press, formed in the United States in 1848, and the Reuters news service, founded in the United Kingdom in 1852.

At first, Agence Havas used traditional news distribution methods, such as carrier pigeons, horse-drawn carriages and coaches, and mounted couriers to transmit news during a period of widespread social and political strife. Then the creation of France’s railroad system in 1842 offered new alternatives for distributing news. The invention of the telegraph in 1845 gave Agence Havas its first taste of modern news transmission and quickly became a primary means of distribution throughout France and across Europe as well. By the end of its first decade, Agence Havas was already an international news distribution service.

Until the middle of the 19th century, advertising had remained a rarity. The development of new distribution systems, however, gave rise to new markets for publicity and advertising initiatives. Agence Havas quickly recognized the potential of adding advertising services to its distribution activities, forming a specialized ad division in 1852. This activity was boosted in 1857 when Havas merged its publicity business with that of the Société Générale des Annonces. The newly enlarged Havas division took Havas firmly into the advertising industry, where the company became one of the foremost advertising agencies in France and throughout Europe.

Offering both news distribution and advertising services gave Agence Havas a great deal of prominence among political circles as well, as the company was able to use its powerful position to influence public opinion on the day’s crucial issues. Holding more or less a monopoly on news distribution in France also made Agence Havas a much sought after partner for foreign companies and businesses eager to achieve the recognition and approval of the French government and people. At the same time, Agence Havas was able to serve the country’s interests overseas, especially during wartime. The use of propaganda had become increasingly sophisticated in the early years of the 20th century, and took on a higher degree of importance as Europe geared up for a new war. For France, Agence Havas played a key role in helping to disseminate the company’s propaganda across the continent.

Yet this same powerful position in the French news and media markets came to be Agence Havas’s downfall. With the outbreak of World War II, Agence Havas was stripped of its news distribution service, which was placed under French government control and renamed the Office Français d’Information (French Information Office, or FIO). This new agency was quickly seized by the Nazis after the French capitulation in 1940. During the war, the former Agence Havas’s international distribution network was used to serve Nazi and Vichy government interests.

Postwar Rebirth

The taint of collaboration doomed the FIO by war’s end. Legislation was passed prohibiting the collaborationist press—that is, all newspapers and journals that continued to publish after 1942—from continuing their activities, putting an end to the FIO. The same legislation, however, seeking to stimulate the creation of new, untainted newspaper and news organizations, also promised government financial assistance, of up to one million francs, toward the formation of new journals.

In 1944, the FIO news agency’s operations were taken over by a group of former members of the French Resistance. Renamed Agence France-Presse (AFP), they resumed operations that same year and quickly recaptured much of the former Agence Havas’s worldwide reputation and structure. Yet, heavily subsidized by the French government, which also became the company’s chief client, AFP was soon placed under the government’s control.

AFP remained a government arm until the mid-1950s. By then, the company faced new competition on the domestic front, in the form of the Agence Centrale Presse, operating since 1951, as well as internationally, particularly with the growing strength of the Associated Press, as well as the Reuters news service, both of which had benefited from the Allied victory after World War II. While these agencies operated as independent, commercial businesses, AFP found itself limited by its status as a government-led agency. Under the direction of Jean Marin, who had been named CEO of the company in 1954 and remained in this capacity until 1975, AFP began to agitate for a change in status.

In 1957, AFP was granted its liberty, firmly establishing its independence for not only its commercial development, but, more importantly, for its editorial policy as well. Nonetheless, the French government retained a strong control over the company. Along with legislation establishing AFP as a commercial entity, the news agency found itself placed within a series of restrictions. While the new legislation, passed in October 1957, qualified AFP as an “autonomous organization with a civil character,” it also prohibited the company from raising capital through sales of shares to private investors, while at the same time demanded that the company present a balanced budget for each year. A further burden for the company was the provision for the presence of its major clients—including eight representatives from the country’s major daily newspapers and some five government representatives—on the AFP board of directors.

If AFP had gained its independence in name, these restrictions effectively placed the company in a position of continued reliance on the French government, which, through its various agencies, remained AFP’s principal source of revenues. The situation well suited the French government, which, especially during the De Gaulle administration and later during the period of political dominance by the Socialist Party, enjoyed a tight control on much of French industry and commercial life.

AFP soon found itself at a vast disadvantage vis-à-vis its competitors. Where Reuters and the Associated Press were quick to adopt new technologies for information distribution—Reuters, for example, had begun investing in using computer-based data networks as early as 1964—AFP, lacking the capital for such investments, would be forced to rely on the slower, traditional transmission methods until as late as the 1990s. AFP’s influence diminished especially among the world’s financial markets, which turned to Reuters in particular. If the French news agency remained influential in certain regions traditionally favorable to the French, such as the Middle East and North Africa, its position was eroding among the more economically powerful Western world.

Company Perspectives:

Agence France-Presse is the world’s leading news and photo agency. We are fast, we are balanced; above all we are accurate.

Jean Marin’s continued efforts to guarantee the company’s editorial independence—which, although required by the 1957 legislation, faced constant pressure from the French government—eventually cost Marin his job in 1975, when the government, led by Valery Giscard d’Estaing, forced Marin to resign. AFP now entered into a period of revolving-door CEOs; the 1957 legislation had, in effect, made this possible by calling for the election of a CEO every three years. With the departure of Marin, the CEO position became something of a political football, as the newspaper representatives on the board of directors, seeking pricing benefits, negotiated with the board’s government representatives, who, in turn, sought to place in position CEOs favorable to the government’s policies and political objectives.

By the mid-1980s, AFP found its financial position in disarray, with a steady string of losses—culminating in some FFr 200 million in the red in 1986—and annual revenues, at around FFr 700 million, representing only a small percentage of those of its major competitors. In 1985, the company took steps to modernize its operations, taking into account the developing global realities of the era. After some 150 years operating from its Paris headquarters, Agence France-Presse restructured, decentralizing its operations into a new worldwide network, with headquarters and distribution facilities not only in Paris, but also in Washington, D.C., Hong Kong, and Nicosia, Cyprus. These new offices strengthened the company’s ability to respond to the particular nature of the European, North and South American, Far Eastern, and Middle Eastern and African regions, respectively.

These moves helped improve the company’s financial position, boosting revenues to FFr 850 million by 1989, and putting it—temporarily—in the black. Nevertheless, more than 50 percent of the company’s sales were generated by the French government.

Diversification for the 1990s

At the start of the 1990s, AFP began to take steps to regain its technological edge and to improve its position among the financial and business communities. In 1991, the company launched a new subsidiary, AFX News, a financial news wire service, in a joint venture with the Financial Times of England. The success of the AFX service, which extended its operations to more than 30 offices across Europe, North America, and Asia during the 1990s, led AFP to take full control of the subsidiary in March 2000.

Despite the success of the AFX venture, AFP, continually hampered by budget restraints, lagged behind its competitors, who were rapidly adopting new technologies, perhaps most importantly the Internet and World Wide Web, for their distribution activities. The early adoption of these technologies led to a wider gap between AFP and its competitors. By the mid-1990s, for example, AFP’s annual sales had reached FFr 1.13 billion—while Reuters was posting annual revenues some 16 times greater.

Toward the end of the decade, however, AFP began diversifying its activities, adding new technology and targeting new markets, such as the satellite broadcasting market with subsidiary PolyCom, a joint venture with France Telecom and the Bourse of Paris. By the year 2000, PolyCom had extended its network to more than 5,000 stations in over 100 countries. Another initiative, launched in 1999 in cooperation with Agefi, the France-based financial news provider, was Companynews, dedicated to providing press releases and financial commentary on corporations worldwide, yet with an emphasis on French companies, which made up some 50 percent of Companynews’ company list. The new subsidiary was technology savvy from the start, offering its services not only through satellite and internet, as well as through fax and France’s Minitel network, but also through the booming GSM mobile telephone market.

In 1997, AFP made its delayed debut on the Internet, with the launch of a financial information service directed toward the world’s stock markets, “Mine and Yours Trésorie,” in conjunction with leading French broker Groupe Roussin. That same year, the company began placing its photo archives, one of the world’s largest with images dating to the 1930s, online as well.

By the late 1990s, analysts were forecasting that the mobile telephone market would become the world’s dominant means of both data and voice transmission in the early years of the 21st century, a forecast that appeared increasingly more likely with the introduction of the WAP (wireless application protocol) standard in 1999. AFP made a strong move toward establishing a position in this new market when it signed a global cooperation agreement with mobile telephone giant Nokia, of Finland, in December 1999. Under terms of the agreement, AFP began providing sports, financial, and general news transmissions in English, French, German, Portuguese, and Spanish to a market expected shortly to undergo a huge expansion; by 2005, industry analysts expected mobile telephones to replace personal computers as the chief means of accessing the Internet.

Key Dates:

1835:: The agency’s precursor, Agence Havas, is founded by Charles-Louis Havas.
1852:: Agence Havas launches an advertising division.
1857:: The agency’s advertising activities are merged with Société Générale des Annonces.
1941:: The agency’s news division is spun off as Office Français d’Informations (French Information Office, or FIO).
1944:: The FIO is disbanded and reforms as Agence France-Presse (AFP).
1957:: Independent status is granted AFP in a 1957 legislative decree.
1985:: Decentralization of operations begins.
1991:: AFP enters a joint venture, called AFX News, with the Financial Times.
1997:: AFP launches Internet financial new service called “Mine and Yours Trésorie.”
1999:: Companynews Internet news service is initiated.
2000:: AFP purchases 100 percent controlling interest of AFX.

As AFP entered the new century, however, it remained hampered by its quasi-governmental status. New CEO Eric Giuily, elected in 1999, began his tenure proposing changes to the legislation governing AFP’s operations. He was particularly interested in opening the company to private investors; he also promised to orient the company more toward English-language news. Vehement protests to the latter by the company’s journalists, who shut down the company during a strike, forced Giuily to back off from this proposal. Nonetheless, it seemed evident that in order to maintain its position as one of the world’s top three news agencies, AFP needed a new and more financially independent status.

Principal Subsidiaries

AFX News; AFP GmbH (Germany); Sports-Informations-Dienst (Germany); Poly Com (joint venture); Company news (joint venture); Nolis; Inédit.

Principal Competitors

The Associated Press; Reuters Holdings PLC; Bloomberg L.P.; Corbis Corporation; Crain Communications, Inc.; Dow Jones & Company, Inc.; Knight Ridder, Inc.; United Press International, Inc.