Outsell's e-briefs      September 26, 2003
A Weekly Analysis of Events and Issues
Affecting the Information Content Industry


Speculation on Thomson/Wolters Kluwer

At an investor conference in New York, Thomson CEO Richard Harrington
said that Europe will be the target for much of Thomson's growth and
acquisitions in coming years.  He noted particularly that Thomson has
ridden the waves of service industry growth and an expanding class of
knowledge workers in North America, and that those same trends are
taking root in Europe.  Analysts at Delta Lloyd Securities seized on
that news to bump up their recommendation on Wolters Kluwer stock, on
the belief that Harrington's announcement signals an increased
likelihood that Thomson will make a bid for Wolters Kluwer.  Wolters
Kluwer's share price is down more than 30 percent since a year ago after
a weak first half, while Thomson's is up 20 percent, making potential
acquisition funding more favorable for Thomson.  Over 50 percent of
Wolters Kluwer's revenues are from Europe vs. only 18 percent for
Thomson, so an acquisition would achieve the goal of expanding Thomson's
European presence.  However, the regulatory issues around such an
acquisition would be huge.  There would likely be an uproar in the
buying community and strong attempts to block any such transaction as

The Outsell 100(sm) Bottom 10: Nowhere You Want to Be

Auditors for Comtex News Network have declared that recurring operating
losses and deficient working capital raise substantial doubt about its
ability to continue as a going concern.  Comtex has been drastically
implementing cost reductions and plans to continue reducing operating
expenses by implementing a lower-cost technology infrastructure and
reducing its workforce, but it has shown little inclination to change
its basic business.  In recent quarters, Comtex has been hanging out in
the Bottom 10 of the Outsell 100, our index of Information Content (IC)
Industry performance.  Just as the overall industry's five consecutive
quarters of growth make it a leading indicator for general economic
growth, the Outsell 100 Bottom 10 list has become the place not to be.
Four of its repeat members are so wrung out that they face takeover
and/or stock exchange de-listing (Penton, IRI, and RWD Technologies are
the others).  On the other extreme, new data shows that the Outsell 100
Top 10 is clearly the winners' circle.  This selection of 10 companies
provides benchmarks and models for the industry, having grown 32 percent
over same quarter 2002 and boasting a 33 percent operating margin.

Paid Consumer Content Spending on the Rise - Or Is It?

The Online Publishers Association, an industry association made up of
the new media units of traditional media companies, released its most
recent data on consumer spending for online content.  The OPA's data
shows that spending grew $748 million for the first half of the year, a
23 percent increase over the same period last year.  A number of
commentators have questioned the scope of what the OPA calls "content";
the $743 million includes spending categories such as greeting cards,
streaming audio and video, games, and an astounding $214.3 million in
the personals/dating category.  We wonder why pornography was left out -
that would give the OPA some really BIG numbers.  The point is that
defining content is a slippery business.  The nature of the Internet
makes the boundary between content and services blurry indeed.  If the
point of the study was to show that people are spending buckets of money
online, it succeeds.  If it was supposed to show a link between that
spending and the success of the traditional media companies that are
behind the OPA, the link is more tenuous.

LexisNexis Beefs Up Company Dossier

There's a small arms race going on among the company information
products of the big aggregators.  A few weeks ago, Dialog beefed up its
Company Profiles product with new content from its sister company Gale,
and new search interfaces.  Now LexisNexis is enhancing the content in
its Company Dossier service.  A significant addition is the robust
collection of legal and public records data that is finally being tied
in to company records.  The overall interface has been upgraded and
comments from Outsell clients are positive.  We're seeing heightened
competition for business applications among the big aggregators Dialog,
LexisNexis, and Factiva.  At the same time, however, Web-only players
such as Hoover's, EDGAROnline, and scores of free sites still provide
great information for free or low cost.  The challenge for the
higher-end players is staking out the specific user applications where
their more robust content is needed.


Instant Messaging: Quicksand or Life Vest?

A recent study by Blue Coat Systems highlighted some of the other
challenges presented by Instant Messaging (IM) in the workplace.
Thirty-two percent of the Brits and 15 percent of the Yanks who
responded to the study said they spend a half hour or more per day using
IM.  Most revealing were the uses to which the technology is put: 78
percent have used it to gossip, 64 percent have used it to lodge their
opinions about senior management, and 52 percent have found it a good
medium for complaining about customers.  Sexual advances, sharing music
files, and pretending to be someone else were also popular IM
applications.  With all this foolishness going on over their networks,
should companies be cracking down on IM?  We've had a small internal
debate of our own on the topic.  Some see e-mail, IM, and other
technologies as huge workplace time-wasters.  As one Outsell colleague
put it, why do we keep adopting technologies that seem to make
communications faster and easier, but not better?  On the other hand, IM
has been adopted as a workplace tool, like it or not, and since time
immemorial, employees have found ways to do personal stuff on the job.
Certainly the telephone was originally seen as a huge potential
time-waster.  What's really going on today is that technology has
enabled, and many companies encourage, 24/7 participation in their work,
so the separation of work and private life has almost disappeared for
many.  Using IM for personal business is inevitable.  The productivity
issue is not so much around the personal business aspect, but the way
these technologies encourage urgent, busy, reactive behaviors.
Meanwhile, as with any new communication medium, there is a pot of gold
for the company that can figure out how to mine those millions of IM
messages and turn them into actionable knowledge management

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David Curle
Editor, e-briefs
Outsell, Inc.
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