FORTUNE — For New York Mayor Michael Rubens Bloomberg, the second week of February 2010 was particularly hectic. In addition to his usual frenetic role running America’s largest city, he was dealing with a dramatic blizzard dubbed “Snowpocalypse,” which closed courthouses, offices, and schools, and sent battalions of city workers into overtime, plowing and clearing streets.
Yet the mayor still found time on two evenings that week to deal with his own private business, attending briefings at the gleaming headquarters of Bloomberg LP, the data-and-media giant that has made him a billionaire many times over.
Since he became mayor back in 2002, Bloomberg has publicly distanced himself from his private company. He agreed with a city ethics board that he’d have “no involvement” in its day-to-day operations, limiting his role to big decisions that “significantly” affect his 85% ownership stake. Just last month, he said at a press conference: “I’ve recused myself from anything to do with the company.”
The press has periodically questioned whether he was really abiding by that pledge. For example, a 2007 New York Times article examined the issue closely, noting the mayor’s regular conversations with the confidants he left in charge and his personal role in the hiring of a new company PR officer. The mayor and his spokesmen insisted his involvement remained within the bounds of his ethics agreement.
But with the mayor only weeks from the end of his final term, four months of reporting for an in-depth Fortune feature on the business of Bloomberg LP (“The Trouble at Bloomberg,” subscription required), reveals first, that the mayor’s role at the company has been deeper than understood, extending to strategy sessions with leaders of company initiatives. Second, even when Mike Bloomberg has personally approved new strategies, that hasn’t halted ongoing internal conflict at his company. (Fortune, it should be noted, is a competitor of Bloomberg News and its magazines.)
In that snowy week in 2010, the mayor first appeared at company headquarters on Tuesday, Feb. 9, for an early evening briefing on plans for Bloomberg Government, an ambitious new venture based in Washington, D.C. aimed at selling data, news, and analysis to businesses and lobbyists. The meeting took place in a sixth-floor glass-walled conference room. Hosting was Dan Doctoroff, the former deputy mayor that Mike (as he is known at Bloomberg) placed in charge of the company in 2008, along with the two leaders of the new business, who led the detailed briefing. For about an hour, the mayor heard, discussed, and approved the project’s plans.
The second session took place two days later, with an executive schedule discreetly noting the scheduled 5 p.m. appearance of “MRB.” This concerned the plans for a redesign of Bloomberg’s website. It was held in a conference room next to the fifth-floor desk of Andy Lack, the former NBC News president recruited to shape up Bloomberg’s “multimedia” (television, radio, and website) operations. In 2008, when Lack arrived, those operations collectively lost $218 million and they continue to be unprofitable.
Doctoroff and Lack were joined at this meeting by digital chief Kevin Krim, a rising star hired away from Yahoo (YHOO) to reinvent Bloomberg.com. The mayor remained for more than an hour as Krim detailed his business plan and showed screen shots of the redesign, set to launch a few months later. It represented a radical departure from the content and dated appearance of the site, whose appearance at that time — a black background with orange letters — mimicked the look of a Bloomberg terminal.
Despite the hour and the stormy weather, the mayor was in an ebullient mood, winking and telling jokes to the small group of men gathered around the table. He was sorry if he seemed tired, he grinned — his girlfriend had kept him up late. This new approach should appeal to a far broader audience, Krim explained, allowing Bloomberg.com — then drawing relatively few eyeballs — to better compete with that other New York media baron, Rupert Murdoch, owner of the Wall Street Journal.
The mayor, who cares deeply about expanding his influence, expressed his pleasure after hearing it all. “Just don’t misspell my name!” he teased Krim, before heading off into the night. (Asked about the mayor’s ongoing role at Bloomberg, LP, a City Hall spokesperson says, “The mayor has not been involved with the day-to-day operations of the company for a dozen years now. His agreement with the conflicts board does permit him to weigh in from time to time, consistent with his being the majority shareholder of the company.”)
In the strange world that is Bloomberg LP, even the blessing of “MRB” — and Doctoroff — didn’t resolve the matter. In the months after the mayor’s two briefings, Bloomberg Government and the redesign of Bloomberg.com would be the subject of furious internal battles, mostly involving two powerful veteran figures inside the company: Matt Winkler, the editor in chief and founder of Bloomberg News, and terminal boss Tom Secunda, a billionaire co-founder of the company.
Both forced restrictions on the website’s content that would have the effect of making it less appealing. Anxious that the site not cannibalize Bloomberg’s lucrative terminals, Secunda insisted that articles generated by the company’s business news wire be available for posting only after paying terminal customers had 15 minutes to see and trade on them first. The website would also carry only a limited number of Bloomberg News’ full-length stories. It would offer no real-time stock prices, even though plenty of other free websites have them. And Bloomberg — famous for its financial data — would provide far less information about public companies on its website than investors could find on Yahoo Finance.
Matt Winkler had his own objections. He preferred the website’s black-and-orange look and wanted control over which articles appeared on the site. And he was outraged that, like many websites, Bloomberg.com was “aggregating” — linking to articles from rival news organizations, such as the Wall Street Journal. Winkler lost the battle over the website’s look.
But by September 2010, even after being publicly promoted and introduced as a feature of the “new” Bloomberg.com, aggregation was gone — and, a year later, so was Krim. (He now oversees CNBC’s digital operations.) The turf battles over the new Washington business, as well as a unit designed to offer legal data, were even more difficult, and they are detailed in Fortune’s new article, “The Trouble At Bloomberg.” It offers a striking view into a huge successful private company grappling with an identity crisis as it struggles to transform itself from a chaotic upstart built around one product into a mature, diversified, professionally run operation.