Dear Fellow Shareholder:

Highlights from 2008 and into 2009

One Company, One Vision

Several years ago, we began the process of gradually evolving our organizational structure to a more centralized approach from one that was largely decentralized with branding, sales, marketing, product development and support activities being conducted at a business unit level. As we’ve grown and gained scale, operating as “one company” has become a driving theme within our Company. We view our “One Company, One Vision” initiative as a key to accelerating innovation, enhancing our existing services, strengthening our technical infrastructure and building stronger relationships with our customers.

During the past year, we made important progress with our “One Company, One Vision” initiative. In that regard, we completed our efforts that began in 2007 to unify all of our institutionally oriented businesses under a single management structure. From a client-facing perspective, we integrated the previously separate Pricing and Reference Data, and Real-Time Services sales teams. We also expanded the number of customers we managed as part of our Major Accounts Group, which provides centralized sales, account management and support to many of our largest and most strategic institutional customers. In addition, we took steps last year, including the appointment of a chief technology officer, to more tightly coordinate our development, information technology and operations resources.

International Expansion and Acquisitions

Interactive Data services an expansive global base of thousands of institutional customers and nearly 55,000 active trader subscribers. In 2008, we continued to grow our institutional business in the European and Asia-Pacific regions, both organically and through acquisition. Although certain economies in those regions slowed in 2008, we continued to take advantage of attractive growth opportunities as a result of the trends cited earlier and drove strong adoption of our evaluated pricing, reference data and real-time datafeed services.

At the same time, we completed two acquisitions that give us a more substantial direct presence in Italy and Japan, two markets that we believe present attractive growth opportunities. We ended 2008 with 29.4% of our revenue generated outside of North America — and we will continue to fund initiatives aimed at growing our presence abroad.

Innovation and Product Development

Interactive Data continued to enhance its existing offerings and develop new ones. In our Pricing and Reference Data business, we’ve continued to expand the universe of instruments we cover by adding new asset classes. Related to this, we established an exclusive strategic alliance with Prism Valuation, a small but highly innovative firm that specializes in valuations of complex OTC derivatives and structured products. In addition to redistributing Prism’s services, we also made a minority investment in this company. At our Real-Time Services business, we kept pace with continuing surges in market data volumes, added new market sources and brought additional services to the marketplace. In Fixed Income Analytics, we advanced development of the next-generation version of our flagship BondEdge^® offering. At  eSignal, we added new features and capabilities with an emphasis on those features that can help us drive adoption of the eSignal  platform within the U.S. regional brokerage market. We also continued efforts to drive collaboration on product development initiatives across our Company.

Leadership Succession

Interactive Data has always prided itself on having a strong and deep bench of talented, experienced executives and managers. During the past year, we added to our team by appointing a number of important business, sales and operations leaders. We also put a CEO succession plan in place to provide for an orderly transition of leadership as a result of my plans to retire later this year. We completed this transition when Ray D’Arcy, who has held a variety of senior sales leadership roles during his 30-year tenure at Interactive Data, became the Company’s president and chief executive officer at the beginning of March. As I have stressed during the past year, my decision to retire has nothing to do with my feelings about the future of our business. I am, in fact, more confident about our prospects than at any other time in my career. I have been fortunate in working for Interactive Data for 40 years, and it is the right time for me to move on to another phase in my life.

I have known Ray for more than 20 years and think he is an excellent choice to be the Company’s next leader. I brought Ray on to my senior management team after I became Interactive Data’s leader in 1995, and he did an outstanding job in directing the market-facing side of our institutional business through 13 consecutive years of growth. Since Ray’s selection by our Board, I worked closely with him to ensure a seamless, orderly transition. I encourage you to read Ray’s commentary on our business and its future within this year’s annual report.

 

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