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========================================== Outsell's e-briefs April 18, 2003 A Weekly Analysis of Events and Issues Affecting the Information Content Industry ========================================== SPECIAL EVENT UPDATE -------------------- Buying & Selling eContent Tackles Big Ideas The energy of the Content Industry's best minds and most passionate champions fueled this week's fourth annual Buying & Selling eContent Conference, co-produced by Outsell and Information Today. The unique mix of well-positioned participants from across the entire content value chain - creators, distributors, buyers, integrators, and users - sparked dialogue that will help shape the future of the industry. Big ideas and hot topics: - Innovations on Display: Everywhere, we saw signs that companies are doing what we have advised during tough economic times: dabbling with new ideas, innovating using both marketing and technology. Interactive Data, Gale, and Factiva invigorated attendees with examples of market-driven innovations based on comprehensive study of content buyers' professional workflow needs. Microsoft was also a hot topic, given recent announcements of content deals to embed access to Factiva, Gale, and Alacritude content in Office 2003 products Word, Excel, and Powerpoint. - Rich Dialogue on Vendor/Buyer Relationships: Several conference sessions revealed how the conflicts between extended budget cuts by content buyers and some vendors' delivery and pricing policies have passed the pain point. Buyers, including Sun and AIG, described the application of comprehensive metrics to content usage in order to identify and cancel low value content. Sophisticated research libraries including Los Alamos National Labs and University of California demonstrated how the need for cross-disciplinary research is reshaping the structure of the services they provide. Buyer presentations painted a vivid picture of what's really going on in user markets and exploded the myth of a "typical buyer." There are some vendors who are getting the picture and dealing with it, and there are others who don't think they have much to learn from a buyer's presentation. The warning bells rang out loudly that these diverging vendor - buyer trajectories are unsustainable and will result in dramatic industry restructuring. - "e" on Display. IBM WebFountain, Yahoo Enterprise Portals, and others created a buzz by spotlighting the growing role of "e" where technology and content meet. Their "e-mojo" and new focus on content buyers' needs makes them hot new content industry players to watch. Attendees were encouraged by the potential new sources of business content IBM's WebFountain may offer, as it creates new actionable business content from large stores of unstructured and semi-structured text. - Risk Aversion and Revenue Protection: There was enough innovation and optimism in evidence to make the vendors who still speak the language of risk aversion and revenue protection really stand out. That kind of fear-based discussion needs to be over. It inherently restricts the options. The companies that aren't using marketing and technology to get to the next stage, and who are concentrating on preserving what they have, don't stand a chance in the changing world that was vividly highlighted here. Keynote speaker Larry Prusak set the right tone. The author of the new Harvard Business School book "What's the Big Idea" reviewed the difficulties that innovative "Idea Practitioners" face in getting Big Ideas implemented in business. As the conference unfolded over the next two days, the full range of Prusak's corporate cultures were in view, from the Open to the Internally Focused. The conference confirmed that the Content Industry is thriving. It showcased its hottest vendors - the ones learning to walk every day in their Buyer's shoes. It gave technology leaders a forum to invite vendors to partner in researching the key buyer needs they can serve jointly to reach a larger total content buyer market. IN THE NEWS ----------- "Being There" Not Enough for Primedia CEO The only surprise in the resignation yesterday of Primedia's Chairman-CEO Tom Rogers was that controlling shareholder Kohlberg Kravis Roberts (KKR) waited so long to pull the trigger. The departure shows that just "being on the Web" with major online acquisitions is not good enough for a traditional publisher; the online properties have to be integrated and make a contribution to the whole. After his arrival in 1999 Rogers called Primedia "a traditional media company that has been just waiting to have its new-media potential developed." To jumpstart the transformation, Primedia acquired About.com for almost $700 million in the fall of 2000, after the dotcom bust, later writing off $345 million. Primedia shares dove 25% at the announcement and never recovered. The 450 web sites were considered amateurish, were never integrated with their counterpart magazines and never diversified their business model beyond ad revenue. The wheels have been ready to fall off for Rogers for almost two years, given the 90% collapse in share price, $1.7 billion current debt, and $2.1 billion of cumulative losses since 1999 at the $1.6 billion revenue magazine, directory, and TV conglomerate. KKR is now likely to sell off its B2B business and other properties, leaving only the 145 core, profitable hobby and enthusiast magazines. EBSCO/RoweCom Deal Finalized The sale of RoweCom to EBSCO was approved by a U.S. bankruptcy court last week, pending the acceptance by a majority of publishers to honor orders placed by RoweCom customers in 2002. Most publishers are coming on board, so the deal seems likely to go through. EBSCO will pay around $7 million for the remains of RoweCom - which at this point isn't much more than its customer relationships. Meanwhile Flip Filipowski, chairman of RoweCom parent divine, Inc., which is also in bankruptcy, is downsizing his career. He and a partner recently bought the Winston-Salem Warthogs, a minor-league baseball team in North Carolina. Bertelsmann Close to Sale of Academic and Professional Unit Reuters is reporting that Bertelsmann is close to a sale of its academic and professional publishing unit BertelsmannSpringer. The sale is expected to raise over a billion dollars. Sources identified the bidders as buyout houses Cinven and Candover; CVC Capital Partners and U.S. firm Blackstone Group; and Apax Partners and UK-based academic publisher Taylor & Francis Group Plc. STM and professional publisher Taylor & Francis recently acquired another professional publisher, CRC Press, from Information Holdings, Inc. (IHI) for $95 million. FIND/SVP Acquires Guideline Research Guideline Research Corporation, a provider of custom market research, has been acquired by New York research and consulting firm FIND/SVP. The deal fills a gap for FIND/SVP clients, who will now be able to obtain survey research directly from FIND/SVP rather than third-party companies, and will add market research capabilities to existing assessment and analysis, benchmarking support, and competitive analysis offerings. Guideline's expertise includes strategic research, new product development and brand repositioning, research for the law, and advertising. It has expertise in healthcare, financial services, consumer packaged goods, apparel, legal research, energy, insurance, and Internet research. The acquisition was financed in part by a $3.5 million investment from private equity firm Petra Capital Partners of Nashville. HEARD WHILE OUTSELL-ing ----------------------- Outsourcing IC: It's Here In e-briefs a few weeks ago, we noted that we've seen increasing interest in the idea of using the big IT service companies (IBM, EDS, etc.) to handle external content management activities on an outsourced basis. As IT and IC become increasingly intertwined, it seems natural that organizations that have already established a good relationship with an IT services provider will want to offload some of their content purchasing and vendor management activities to those same service providers. Recently we've become aware of a few professional services firms that have seen library outsourcing or content acquisition written into traditional IT outsourcing RFPs from potential clients. It's another confirmation of the trend that IC functions will start to be outsourced in conjunction with IT outsourcing. OUTSELL ON OUTSELL ------------------ Outsell/SIIA Webcast Know your Users: Finance and Legal Professionals This webcast will profile corporate finance and legal professionals as information consumers. Outsell will present and analyze its extensive data about their information habits and preferences. Key attributes to be analyzed include: goals, values, and work tasks; types of information used; information spending levels; perceptions of the Internet as an information source; and information problems and challenges. Content vendors targeting corporate finance and legal professionals will come away with a solid understanding of the unique information needs of an important group of users. Presented by Roger Strouse, Director and Lead Analyst. May 21, 1:30 pm - 2:30 pm ET Register now at www.siia.net/events. Participate in Industry Study Before April 23 Outsell invites information professionals; knowledge managers; market, competitive, and business intelligence professionals; librarians; training and learning professionals; and portal/Web site managers in all industries, government agencies, academic institutions, and non-profit organizations to take part in our annual study of content deploying functions. Professionals in these roles are invited to take a survey that's online through Wednesday April 23. If you submit your responses on or before that date, Outsell will enter your name in a drawing for one of five cash prizes of $200. You can access the survey by pointing your browser to: http://www.digisurvey.com Username: Outsell Password: survey If you also received an invitation to take this survey from your professional organization, we ask you to take the survey only once. For more information about this study, please contact Karen Wilson at [log in to unmask] New Outsell Research "TrendAlert: An Outsell View Of Content Integration Technology". A companion to our earlier "TrendAlert: The State Of Content Integration Inside The Firewall," this Briefing identifies and examines the technology players that are helping organizations integrate content with user applications. It identifies the three stages of integration activities: information needs assessment, aggregation of content, and building user applications. Eleven types of technology players are discussed, and five vendors that were identified in our content integration tour as providers of content integration solutions are profiled in detail: Biz360's Market 360, Factiva's Fusion, Intelliseek's Enterprise Search Server (ESS), Plumtree's federated search component, and WebFeat's PRISM. For content deployment professionals, this Briefing is a valuable guide to the players that will help integrate content in their specific environments, and it gives advice for evaluating the solutions. For content vendors, the Briefing shows how the worlds of Information Technology (IT) and Information Content (IC) are no longer separate realms, and that more content vendors need to build interoperability into their content. Available at www.outsellinc.com. ============================================================ We want to hear your feedback, and we want to publish your comments on the events we cover in e-briefs (anonymously if you prefer). Send comments, news, insights to: David Curle Editor, e-briefs Outsell, Inc. mail to:[log in to unmask] ============================================================ Redistribution: Outsell's e-briefs is a subscription service. Individual subscribers may not redistribute to other persons without permission. Company subscribers have the right to distribute content freely within their companies/institutions, but not to persons outside their companies/institutions without permission. Subscriptions: Visit our Web site at http://www.outsellinc.com to order subscriptions to e-briefs. Rates are as follows: $395 for an individual subscription. Single reader with no redistribution rights. $1995 for a company subscription. Includes the right to redistribute to any number of readers within your company/institution. e-briefs is delivered on Fridays, 48 issues per year. ============================================================ Outsell is the only research and advisory firm that focuses exclusively on the Information Content Industry. As an independent adviser, we emphasize close relationships with our clients and deliver high-quality, fact-based research, analysis, and advice about every aspect of content strategy, deployment, and use to a wide range of vendors, buyers, and users of information. Founded in 1994, Outsell helps world-class content vendors, Global 2000 companies, government agencies, and leading educational institutions increase their understanding of users and end-markets, assess content quality and effectiveness, benchmark operations, hire and retain executives, and develop more successful internal and commercial content products and services. ============================================================ Outsell, Inc.'s information, analysis, opinion, and reports (the "Information") are based on qualitative and/or quantitative research methods and its staff's extensive professional expertise in the industry. Outsell, Inc. has used its best efforts and judgment in the compilation and presentation of the Information and believes the Information is accurate as of the date furnished, but the industry and the Information are subject to rapid change. Except as aforesaid, Outsell, Inc. makes no other representations or warranties, express or implied, concerning or relating to the Information. Copyright 2003 Outsell, Inc. ============================================================