Monday, December 29, 2003

In Premium Weblogs: Google's Prospects, NYSE/NASDAQ Merger

Janice McCallum reflects on how Google's business model will have to evolve as it searches for ways to extend its pioneering efforts in community-driven relevance to more aspects of vContent. more...

Jack McConville looks at the pending Calpers suit against The New York Stock Exchange's specialist system and sees it far more likely that the merger with NASDAQ will take place. more...

Retreat from Scientific End-Users: Elsevier to Close Portals

According to an article by Barbara Quint, an employees newsletter, Elsevier Today, made the internal announcement that end user sites, BioMedNet, ChemWeb and Elsevier Engineering will no longer be funded, with some functions migrated to the main Elsevier site. This is a strong indication that Elsevier is being impacted by the move toward open access in the scientific community and House of Commons rumblings in UK. Elsevier has long been criticized in the library world for the price of their over 1000 journals, which include titles in rarefied scientific disciplines. Typical yearly price increases have been 20% at a time when library budgets are shrinking, forcing more scrutiny of journal subscriptions, both electronic and print, and outright cancellation in many cases. In the bigger picture, the commercial viability of these end user portals is limited. Individual scientific users have very limited budgets. The corporations and academic institutions which do have the budgets, albeit constrained, offer electronic versions via an intranet, requiring authentication, not a focused public access portal. Useful as these Elsevier portals may have been to individuals, they join the dust bin of other dot com sites which lacked the right combination of business model and valuable content.

Friday, December 26, 2003

McLuhan Redux: Book Reapplies His Tenets to Today's Business Content Culture

Familiar phrases like "The medium is the message", "medium cool" and "global village" all owe their existence and popularity to the 1960's media guru Marshall McLuhan, who popularized the awareness of electronic content culture as far more than the transference of words and pictures to new transmission devices. Now the Toronto Star notes a new book entitled "McLuhan For Managers: New Tools For New Thinking", by Derrick De Kerckhove and Mark Federman (Viking Canada) is reintroducing many of McLuhan's concepts to business executives wrestling with the realities of how to create successful content and content technologies for their companies. Nearly forty years after he coined his basic new media concepts, his once-radical predictions of hierarchical organizations and limited role-players giving way to multi-purposed players in a highly networked Web-centric work environment have become a common reality for workplaces everywhere. Content and content technologies have created pervasive changes in our work culture, the scope and depth of which even many high-tech organizations are still trying to absorb. But when the medium has become the message -and the market - for even hay and straw farmers, you know that the time has come to consider what those "hippies" were talking about.
The Social Life of XML: Opportunities for Publishers Abound
Jon Udell's recent article on XML.com contains a ton of useful insights into why XML-based publishing does and doesn't work well these days. The key quote from a content perspective, though, is this: "Documents...aren't just passive carriers of information. They're the warp on which we weave a socially constructed reality. Somehow, we need to find ways to connect that reality to the workflow and process orchestration systems now being invented." A big "amen" to this message, no doubt, inasmuch as it represents where publishing has to go in the next few years. Web services-oriented XML concepts emphasize the delivery of combined content and fictional packages into a browser or server environment, but the real question is how XML will be able to reconstruct the creating, distributing and experiencing of published content. For the most part that still plays itself out against a background of email and attachments, with a smattering of crudely formatted XML content on obelisk. We are moving towards an environment in which people author XML-based objects with unique content and functionality that they transmit email-style to one another, that are then amplified in their value by recipients and which may in turn have digital rights attached to them for security or monetization. This value-add stream of objects, especially in the organization of content into a meaningful and useful workflow, presents great opportunities for commercial publishers to reinvent their art of making valuable information and experiences on a new highly mutatable canvas. Concerns about content being commoditized will continue to cause fretting amongst publishers - until they reconsider the nature of their ability to capture and package these more organic aspects of the new publishing world.
IBM's Aggressive Content Stance: Bypassing the Office Content Bottleneck
SearchDatabase.com notes that IBM's strong position in content management across a wide array of products gives it a claimed 34 percent share of the content management marketplace, not including its most recent acquisition of Green Pasture Software. While the obvious targets of this strategy are companies such as FileNet and Documentum, it's clear that IBM has a much broader focus that takes in the likes of Microsoft, which continues to struggle with content management as a sophisicated, scalable component in its .NET framework. Without that key component, content that used to be authored in Microsoft Office applications will gradually take its original form in content managment repositories, where it's more easily repurposed for multiple audiences. Microsoft does its best to keep up with the content management movement, and has components such as InfoPath can help to facilitate independence from heavy software, but those that have the least to lose from established desktop software revenues are the ones most likely to move aggressively into content authoring and management environments that are in line with today's more efficient institutional publishing environments.

Monday, December 22, 2003

All Things Must Pass: National Online, NYNMA To Go 404
Vestiges of an era when the phrases "Online" and "New Media" were really new and powerful, two institutions from that era have passed into history. Information Today, Inc. announced the temporary suspension of its National Online show, whose birth predated the dawn of the Web, while it contemplates how to relaunch the event in 2005 with a new focus that ITI hopes will attract content buyers and sellers more effectively. The show had lagged notably in recent years, overshadowed by its own Internet Librarian events, the broadening focus of the Special Librarian Association's major events and the lack of marketing synergy between professional content marketers and providers oriented towards the public Web. Meanwhile the struggling New York New Media Association acknowledged its weakening mission and folded its membership and remaining events into the Software and Information Industry Association, formalizing a takeover that had been evolving for months. The good news in all of this is that the content marketing concepts that were pioneered in these forums have gone mainstream, minimizing the need to treat them as aberrations from normal business practices. The bad news is that associations and events vendors continue to struggle to define "big tent" events that reflect how the powerful merging of content, technology and human values are creating a merged universe of services for institutions and individuals alike. "Online" and "New Media" may have gone status quo, but few have realized the focus of what defines vContent today.
Amazon's Shifting Role: A Lesson for Aggregators?
What's the difference between LexisNexis and Amazon? Aggregation models are beginning to favor those that can enable independent presences along with aggregated efficiency. Details in our "Business Content Suppliers and Aggregators" Premium Weblog.

Sunday, December 21, 2003

Forecast Bright For Advertising Industry, But Is Online "Advertising" Measured Correctly?
Just a year ago, the 2 year slump in advertising had the entire publishing industry on its heels. Even the minority of publishers that relied least on advertising revenues were hit since their subscribers were feeling the pain of the general economic stagnation. What a difference a year makes! Internet advertising may not appear to be growing very fast, but in reality more marketing dollars are being spent on producing an effective campaign that doesn't rely so heavily on advertising. Details in our "Content eCommerce" Premium Weblog.
PDA eBook Format a Strategic Advantage for OverDrive
OverDrive Inc., a leading ebook distributor, has announced deals with leading public libraries, Denver Public Library (Colorado), Cuyahoga County Library (Ohio), and San Jose Public Library (California). The library world is driven by opinion leaders, and these libraries have already built reputations for innovative leadership. Adding ebooks to their collections is a significant step in validating ebooks for the public library sector. Details in our "eResources Marketplace" Premium Weblog.
Have Financial Market Data Vendor Fortunes Finally Turned Around?
The financial market data vendors (in particular Bloomberg, Reuters, Thomson Financial, Moneyline Telerate and the ubiquitous "others") are closing out yet another disappointing year, as are their buy and sell side customers, but vendors seem to be more positive in their outlooks for 2004. Details in our "Financial Content and Technologies" Premium Weblog.

Thursday, December 18, 2003

Kanoodling for serious business?
Kanoodle.com has just resurrected the concept behind Sprinks by hiring the core Sprinks executive team and raising VC money to develop its contextual ad business. Before its acquisition by Google in late October, Sprinks was the contextual advertising arm of Primedia. Unlike Google's AdSense or Overture Content Match, Sprinks relied on matching ads to content by "topics" rather than contextual relevancy determined through text analysis of the full text of a page. Sprinks had attracted a growing number of business and technology-related sites, including Forbes.com and Cnet. As foreseen in my paper on Contextual Ads, the impetus behind the Google acquisition of Sprinks was access to the attractive Web properties on which to place ads (which included the About.com sites), not the methodology for matching ads to content used by Sprinks.

With the new resources provided by Kanoodle.com, Lance Podell, who was named President of the content division of Kanoodle, has an opportunity to expand the concept behind the previous Sprinks to a wider group of sites in the Kanoodle.com network. But, it may be wise to specialize rather than try to compete with Google and Overture in all categories. Sprinks had a nice start with business and technology sites. I'd like to see Podell and his team continue on a focused path wherein advertisers and content sites are more tightly aligned. This would provide some reassurance to reputable business publishers that want some control over the advertising that appears on their sites. And, let's hope that with access to Kanoodle.com's text analysis technology, ad matching won't rely strictly on selecting topics, but will be made richer through a combination of both techniques.
Google's Book Excerpt Beta: A Stealth Feature Gets Maximum Publicity
The New York Times along with many other major outlets covers the non-announcement by Google of the Beta of its book excerpt feature promised earlier this fall. About 60,000 titles are said to be part of this Beta of a feature known as Google Print (don't bother going to print.google.com, it's a "this page intentionally left blank" page), about half of the titles carried by Amazon. But in searching through many current bestsellers the only results that come up prominently are from Amazon, one of Google's leading purchasers of its search technology. An example of a query that works can be seen by clicking here (fifth non-sponsored result line). The claim made by Google on SearchEngineWatch.com is that search results are being ranked the same for their book excerpts as for any other content. Given the sparseness of the actual content of an excerpt (example here), their relatively poor rankings are understandable, but it does make one wonder about the biasing of book title search results towards Amazon. The excerpts include both links to major online sellers - Amazon, Barnes & Noble and Books-a-Million - and AdWords links to related topics. Google has become an expert in creating maximum publicity for their "beta" products, drawing in audiences' interest - and online ad revenues - while minimizing the commitment to solid functionality in the short term. Like a White House press secretary doling out little tidbits to a hungry press corps, their mastery of secrecy to feed press interest and exposure is impressive.

Tuesday, December 16, 2003

Thomson Financial and Radianz Ink Access Deal
Under a new strategic agreement, Thomson Financial will use RadianzNet to provide its European and Asian clients with access to Thomson ONE and applications like First Call, SDC Platinum and Autex. Existing clients of other Thomson Financial products including Datastream also can benefit from the agreement. (Radianz, established in June 2000, is 51 percent owned by Reuters with Equant NV owning the balance.)

According to the joint press release, �Clients that already use the Radianz network for accessing or distributing financial services should be able to start using Thomson ONE and other Thomson Financial applications in as little as 10 working days.�

The interesting angle is that Thomson Financial has a strategic goal of knocking off Reuters in the market data arena. But, I presume all is fair in love and war. Radianz�s president and chief executive officer, P. Howard Edelstein, addressed that issue saying, �Our agreement is significant and a milestone in Radianz�s history because it reinforces the neutrality of our infrastructure, which is designed to empower all financial institutions worldwide to communicate with their clients.�


CalPERS Piles On The New York Stock Exchange
The California Public Employees' Retirement System (CalPERS) filed suit in the United States District Court Southern District of New York charging the New York Stock Exchange and seven specialist firms with violations of the Securities Exchange Act of 1934. The suit alleges, �(The) defendants failed to disclose that NYSE orders were not being filled at the best available prices, but, in fact, were being manipulated for defendants� benefit in violation of NYSE rules designed to protect public investors�� The 48 page brief further states, �The NYSE knew that its specialist firms were repeatedly violating the Exchange Act and the NYSE�s own rules��

This is the latest in a series of criticisms of the NYSE and the specialist system. In an early October report, the SEC criticized the New York Stock Exchange for not policing the specialists and for ignoring violations that resulted in investors being short changed. Fidelity Investments later issued a statement on reforming the NYSE because �it operates under outdated monopolistic trading rules that create a non-level playing field that favors members on the NYSE floor over investors, both large and small.�

This has all the earmarks of a real donnybrook, regulator style. I�ve long held that when the SEC looks to level the playing field, those that had the advantage end up losing out in a big way. Turn back to the 1960s when the SEC went after the odd-lot brokerage firms � deCoppet & Doremus and Carlysle Jacquelin � and cut their rates for trading odd lots to the point where they eventually went out of business. Fast forward to 1997 when the SEC empowered the electronic communications networks (ECNs). Then trace the fortunes of Instinet ever since. Seems to me that a 100-year old-plus specialist system is more than anachronistic these days.

Monday, December 15, 2003

New Opportunity: eBay as a Content Provider?
Transactions can become valuable content, as demonstrated by recent developments at eBay, which is now licensing access to completed auction transactions with fees for commercial use beginning at $10,000. Accurate pricing information has always been difficult to determine, particularly in some markets. Wholesale and recommended retail prices can be obtained, but actual selling prices, particularly in the used and gray markets have been much more difficult. Last quarter, there were a total of 235 million auctions on eBay, which translates to over 1 billion transactions per year, across an incredible array of tangible products, with real time market information about supply and demand. Now these transactions are being sliced and diced into pricing guides for niche markets: used golf clubs, computer equipment, consumer electronics, cell phones. eBay probably won't displace the venerable Kelley Blue Book for autos, but look for similar guides to develop in untapped specialty markets.

Thursday, December 11, 2003

Signs of Spring at Reuters?
Devin Wenig, an executive director of the vendor and the president of customer segments made the Reuters Group PLC presentation at the UBS media week conference. He led off with an observation that the �market is better overall, no doubt about it.� That should come as welcome news to the other vendors since Reuters is generally regarded as the bellwether of industry trends. But, he made no specific forecasts leaving that to chief executive officer Tom Glocer who will speak ex cathedra on February 17 about revenues and profits prospects for 2004. He started off with a few digs at prime competitor Bloomberg stating that our products are �better than Bloomberg�s� with no comparative illustrations. Wenig said Bloomberg Professionals are �being switched off� in favor of Reuters products in the fixed income area but didn't elaborate.

He updated participants on the Fast Forward program, well worn ground that I won�t go into here. The 2003 review highlighted the acquisition of Multex in January and how the unit fits in with the total package of services rolled out this year and those due for rollout in the new year. Multex will also be a cornerstone in whatever independent research niche Reuters carves out for itself in the post-Spitzer settlement era.

As usual, no Reuters Q&A session is complete without a tealeaf-reading question aimed at getting a fix on revenue prospects when management is not prepared to make one. When asked if December cancellations were as bad as last December, Wenig said, �this December is very different with no radical cost reductions by customers" like the ones the vendor experienced last year. But, he pointed out there are two and a half weeks to go in the month. As balance, the lousy December last year seemed to me to set the stage for the lousy first half of this year. Maybe the reverse is true this time around. Are we seeing signs of spring for the vendor as we approach the first day of winter? Stick around and come back here periodically for updates.
Dow Jones' Fortune Lies in Wall Street Journal Turnaround
Dow Jones� senior management made separate presentations at the UBS Media Week and Credit Suisse First Boston Media conferences this week. The business theme for The Wall Street Journal was one of continuing caution sprinkled with a little optimistic dust. Rich Zannino, executive vice president and chief operating officer, talking about ad linage, said, �We saw a dramatically improving trend in September (up 23% per issue), and October (up 13% per issue) continued September's momentum. But this trend abruptly reversed in November, which was down 1.2% per issue. And the bouncing continues in December, where we expect per issue linage to be back up - in the low to mid single digits. So we're clearly not out of the woods yet.� (By the way, those comparisons are with especially week year-earlier ad linage trends, but why pick nits?) Peter Kann, chairman and chief executive officer, said he needed to see three or four quarters of consecutive ad linage gains before he sees a turn. Until then, he�s �cautiously optimistic.�

From that, it looks like all the steps have been taken to position the franchise product to leverage the turn when it comes.

Electronic publishing, which is my immediate area of interest, posted a revenue gain of three percent over the first nine months of 2003. The segment is anchored by Dow Jones Newswires (67 percent of revenues in the first nine months down from 73 percent in 2002). But, Newswires revenues declined five percent due to end-market weakness in the US. That was offset by a 22 percent increase in consumer electronic publishing revenues, which includes The Wall Street Journal Online. Dow Jones Indexes revenue rose 26 percent. Operating profits for Electronic Publishing were up 14 percent and margins were 21 percent up from 19 percent in 2002.

Like The Wall Street Journal, it looks like Newswires too is leveraged for any upturn.

Wednesday, December 10, 2003

Vendors in Content Reference Forum Offer Contextual Framework for DRM
The Content Reference Forum (CRF), established by a group of media of technology firms including ARM, ContentGuard, Macrovision, Microsoft, Nippon Telegraph and Telephone, Universal Music Group and VeriSign, has announced the release of new specifications to guide the content industry in the development of standards for digital rights managment implementation. The core baseline specification [PDF in .ZIP file] being proposed by the CRF is oriented towards consumer multimedia purchases, but includes in its XML-based metadata and schema numerous contextual hooks that should be of great interest to all content creators, marketers and consumers, including content identification and description, commercial environment, technical environment, value chain participation and content reference resolution. Of particular interest is the inclusion of a value chain entity, which in theory can represent the interests of multiple parties playing a role in content sales and redistribution - including, in theory, end-users making purchases who may have redistribution rights. It's often the case that these kinds of standards, while nobly intended, collapse under the weight of interests trying to wrestle them into being, but as a starting point the CRF has created a very powerful tool that should be expanded over time to accomodate a wider range of content types and commercial models.
Can Agencies Deliver Online?
There is so much positive news about growth in the advertising spending (total US ad spending is forecast to grow 6.9% in 2004 per Bob Coen of Universal McCann) , it would be easy for traditional ad agencies to enjoy the increased demand and keep pumping out more of what they do best: television and print ads. But, even with the healthy increase in demand for ads in all media, advertising agencies should be prepared for significant changes in the product mix that they provide. Because, while companies are spending more to promote their brands in all media, they are increasingly using their Web sites as an integral part of their overall marketing campaigns. Results of the Digital Marketing Survey, sponsored by BtoB, the CMO Council and USA Today, showed that 78% of the global marketers and agencies that responded said they planned to increase their digital marketing budget in 2004. Furthermore, the respondents were not satisfied with their current online marketing efforts. Ad agencies need to improve their ability to integrate offline campaigns with Web advertising, and perhaps most important, with a Web site marketing plan that is designed to provide �highly personalized interaction, better customer profiling and analytics to determine campaign effectiveness�. This is what iProspect calls �inquiry marketing�. John Battelle prefers to call it �intent� marketing. No matter what you call it, ad agencies better figure out how to deliver it to their clients.

Tuesday, December 9, 2003

No Surprises in the Cards at McGraw-Hill's S&P Unit
At the UBS Warburg media week conference, Harold (Terry) McGraw, the chairman, president and chief executive officer of The McGraw-Hill Companies reviewed prospects going into 2004. My main interest is in the financial services area, primarily Standards & Poor�?�s. There were no surprises. For the first nine months of 2003, financial services revenues rose 11 percent to $1,274 million from $1,148 million in the first nine months of 2002. Operating profits for the unit were $488 million compared with $413 million in 2002, an increase of 18 percent. Operating profit margins for the nine months were 38 percent compared with 36 percent in the same year-earlier period. Mr. McGraw said Standard & Poor's will turn in double digit growth in both revenues and profits this year and will repeat that in 2004 although the percentage growth next year won't match that of this year. Margins are expected to remain the same. The unit will live with an expected sharp downturn in the issuance of mortgage-backed securities in 2004. International revenues, now a third of the total, will increase in 2004 and will get to 40 percent over the next several years. Mr. McGraw said delayed budget reviews for this year make for a cloudy crystal ball looking into next year for the company as a whole, but he tossed out a forecast of earnings growth in the high single digits.

Thomson Financial Prospects Detailed at Media Week
In a pedestrian presentation at the UMB Warburg media week conference, Richard J. Harrington, the president and chief executive officer of Thomson Corporation walked the participants through the company�?�s four areas of operations �?� legal and regulatory; learning; financial; and scientific and health care. He had an hour but it took only 50 minutes for the slide show and a less-than-challenging question and answer period to complete the task. It was boilerplate at its finest. As for Thomson Financial (my particular area of interest), the unit sells into a $16 billion market where it accounts for 10 percent or $1.6 billion in terms of 2002 revenues. The industry has been in contraction for the past several years and Thomson Financial was not spared in 2002 when it experienced a three percent decline in revenues. The unit has been positioning itself to better meet the needs of its beleaguered customers in the banking and brokerage businesses by helping to increase their productivity and lower their total cost of ownership. The flagship product is Thomson One, a single delivery platform that�?�s scalable and replaced a hodgepodge of prior platforms. End of commercial.

In the Q&A, the lob ball questions included an update of the status of the Merrill Lynch contract where Thomson Financial is the project manager to develop and implement a new financial workstation for Merrill�?�s US Private Client group. Revenues from that will kick in 2Q04. The UK�?�s Financial Services Authority is looking into the possible elimination of soft dollar commission arrangements. Mr. Harrington said about five percent of Thomson Financial revenues come from such arrangements.

Of note, Mr. Harrington referred to Lou Eccleston, Thomson Financial's head of sales, as "Ecclestein." Let's hope his paycheck is made out to Eccleston.

Monday, December 8, 2003

PayPal Reduces Fees for Online Music Firms
In a press release today, PayPal has made a move to become the major fee collection platform for online music by reducing its transaction fee to $.09 plus 2.5% from $.20 to $.30 plus 2%. This is a business of counting pennies, since individual songs are priced to consumers at $.79 to $.99. Then music firms have to pay licensing fees of $.60 to $.80 per song to the labels, which doesn't leave much margin for online music firm profits . So this announcement represents a significant improvement in the potential to profit from sale of online music. From my experience as a buyer, PayPal is also significantly more customer friendly than previous micropayment systems. The 35 million existing PayPal accounts used for eBay buying and selling make this a attractive platform for building the online music business. Stay tuned!
Northern Light Business Research Library: Is Less More?
Information Today covers the upcoming relaunch of its Web-plus-premium content service for institutional clients, targeted for 15 January. Priced well below offerings from LexisNexis, Dialog and Factiva, about half of NL's former premium content titles - about 1,900, according to InfoWorld - in addition to about 100 million business-focused Web pages. Northern Light certainly re-enters the arena for premium content with a great deal more focus for this particular product line, and its offering of a "business web" selection of relevant online content may prove to be a welcome simplification of the Web for professionals increasingly frustrated by the preponderance of irrelevant content found in consumer-oriented search engine results. It's a reasonable "walk before you run" approach for a company that's trying to leverage a small but enthusiastic following into a strong institutional showing, and its sharp-pencil pricing may make friends in quarters trying to hone down corporate content costs. Backed by solid search performance and a deep general-purpose taxonomy, Northern Light offers a kit that spans the space between the top-tier aggregators and other smaller content collections such as eBrary very comfortably for many smaller businesses and departmental operations. It's not the widest market niche to exploit, though, and their success is predicated largely on their ability to sell into a space increasingly dominated by portal providers locked in to their own search solutions and less supported by the infopro "friendlies" that can advocate for this kind of solution. Sometimes less is more, but it can also be not enough to make a difference.
SunGard to Buy FAME Information Services
SunGard Market Data Services signed a definitive agreement to purchase FAME Information Services, Inc., a New York-based provider of historical data management products, reference data management and services, and consulting to the financial, energy, and public sector industries. No terms were disclosed. The transaction is slated to take place in 1Q04 subject to regulatory review. The purchase is �not expected to have a material impact on SunGard's financial results, � according to the SunGard press release. To me, it looks like a logical extension of SunGard Market Data Services� attempts to bolster its straight-through-processing capabilities. It also puts them into a crowded field up against a competitor like Asset Control. Warburg Pincus, a private equity and venture capital firm, is the major shareholder in FAME. Last year, there were rumors linking FAME with a possible acquisition bid by Reuters that never happened. The FAME product suite and management team will join the SunGard Market Data Services group.

Friday, December 5, 2003

Reed Elsevier Braces for Stagnation in Business Publishing Ads
The Wall Street Journal [PREMIUM] reports that though Reed Elsevier will fare pretty well overall in 2004, thanks to continiung strength of its LexisNexis property and healthy sales in its science division, its overall performance is expected to dip to single-digit growth, in part because of expected softness in education-related sales but also because of softness in advertising sales in its business-related magazine properties. Some of this softness is no doubt related to the continuing stall of the global business cycle, but it is also pointing towards the ultimate consequences of business content going electronic at an ever-increasing rate. As businesses worldwide eliminate physical content collections wherever possible, the online versions of these publications found in aggregators' databases are increasingly the only version that professionals will see. Being able to provide ads to this audience behind corporate firewalls will become an increasingly important factor for the success of both global publishers like Reed and independent publishers trying to build market share. Opportunities abound for smart aggregators who are ready to use contextual content to leverage the value of that context intelligently for professionals through ads and other for-fee content placement.
Dialog Adds Application Programming Interface Feature, But Where are APIs Going?
LocalTechWire covered Dialog's announcement of their new Application Programming Interface (API) kit's availability, joining rivals LexisNexis and Factiva in the race to contextualize premium content more effectively in institutional portals. Being able to bring premium content into portal applications is increasing in importance to these vendors as fewer of their clients opt to have information professionals wrestle with the previously arcane interfaces of these services and instead choose to place the content where it will have the most value to users. In the race to contextualize content, though, these vendors appear to be running towards many of the same issues that financial datafeed vendors have had to face over the past decade as their previously terminal-bound premium products had to make way for content that was being contextualized by client-supplied software consuming their feeds. Their solution to avoid commoditization was to buy back the value-added desktops and distribution architectures of many of their clients' software providers so as to offer a framework for more comprehensive content solutions. But in today's more open Web content distribution environment, in which institutions play a far more active role in developing their own content solutions, few content companies involved in general content aggregation such as Dialog are going to have the clout and capability to even consider creating or capturing appropriate desktop solutions for specific market environments across the multiple market verticals that they face. Smart aggregators continue to position "workflow" front ends for their target sectors, but with the flourishing of APIs for general business content the door has been opened for organizations to examine competitive sources in a much more objective light - and for content aggregators to consider more actively where their long-term formula for content value success will be. In such an environment, providing Web services-enabled solutions that provide both contextuality and personalized service becomes all the more important.

Thursday, December 4, 2003

Important Media Conferences in New York Next Week
Those familiar with the media goings in New York in early December are anticipating the 31st annual UBS Media Week Conference that heats up on Monday December 8 and runs through Thursday December 11. Credit Suisse First Boston will also run its Media and Telecom Week in parallel (and in competition) with many presenters duplicating their efforts at each conference. The verticals include entertainment, ad agencies, broadcasting, publishing, newspaper publishers, video games, multichannel and international. For a full list of the UBS speakers, log on to www.ibb.ubs.com.

My interest centers on the market data companies like Reuters, McGraw-Hill (Standard & Poor�s), Thomson Corporation (Thomson Financial) and Dow Jones.

Over the years, these presentations give investors (and competitors) a pulse on what�s going on in the final month of the calendar year, and in some instances, a forecast for the next year. But, in these uncertain times, I feel most will defer any meaningful projections until after the turn of the year.

Log back here next week to see if any of the subject companies say anything of interest above the ordinary.

Tuesday, December 2, 2003

Convera Tools Highlight Efficient Taxonomy Development for E-Government
Taxonomies have been playing a little bit of a back seat lately in terms of buzz, but their importance to efficient and effective content deployments remains undiminished. Convera has announced how its Taxonomy Workbench kit is making it possible for E-Government initiatives to comply with Section 207 of the U.S. E-Government Act of 2002. Developing taxomies from scratch can be a nightmare, sometimes consuming huge multi-departmental committees that move slowly at best oftentimes to come up with meaningful and accepted content organization schemes. Tools like Taxonomy Workbench can accelerate this process significantly with importing, benchmarking and tuning capabilities to smooth this process. Word of warning: the tools can only amplify the efforts that are underway; if those efforts lack strong validation from taxonomy experts, there are still pitfalls that are likely to be encountered. Tools can enhance content craftsmanship, not replace it.

Monday, December 1, 2003

Search Engine Advertising Meets the Pharmaceutical Regulatory World
Pharmaceutical advertising has always been a sticky wicket for traditional media, whether print, television or radio. Large advertising budgets are involved, but each media has established guidelines on acceptable ads. Though the limits on acceptable content have expanded in recent years, still the boundaries of good taste and credibility are maintained by all the mainstream media. In addition, the FDA strictly regulates claims by pharmaceutical manufacturers, and traditional pharmacies follow the same guidelines. Now the web search engines are confronting the same issues, as evidenced by Google's announcement that it would join Yahoo and MSN in rejecting ads for illicit pharmacies. Much like adult content, advertising for pharmaceutical products has become pervasive, so policing this activity is challenging. Effective enforcement is another signal that the web is becoming established as a mainstream advertising avenue, and will be more attractive to all those advertising dollars controlled by the pharmaceutical industry.
PLOS and SSRN: Two Approaches to Revamping Scholarly Publishing

Both the Social Science Research Network (SSRN) described in David Warsh's article and the Public Library of Science (PLOS) have the goal of making scientific research more widely available, but their solutions are very different. PLOS chose to become a publisher, using the same peer-review model as existing scientific journals. PLOS has a radical pricing tactic (free for users, $1,500 for submissions), but the costs of publishing their journals are not significantly different from those of traditional publishers. SSRN chose to become a network that enables access to research papers published in other venues in their early stages before they are officially published�working papers�as the NBER has referred to them for decades, as well as officially published papers. (Note, currently, SSRN hosts all abstracts and full-text papers on its site, which may not be necessary in the future.) SSRN has a range of monetization opportunities�advertising on its site, commissions on subscription sales (users can subscribe to for-fee journals via the site), potential conference sales, and more. Plus, they can offer added value to users and contributors by providing contextual links between related content within the network as described in my recent research paper.

Both organizations have laudable goals, but if the goal is truly to encourage collaboration between and among the various global scientific communities and to reduce the time by which research is publicly available, the SSRN approach wins top prize easily. By bringing in advertising revenues (that could be shared with publishers) and positioning free and for-fee articles head-to-head in their listings, the SSRN could also put competitive pressure on commercial journals to reduce the cost of individual journal articles, and ultimately to reduce journal subscription prices.

Friday, November 28, 2003

EMC/Documentum Marriage Raises Skepticism of ECM Crowd
A recent Transform Magazine article amplifies industry skepticism that has been raised regarding EMC's recent acquisition of Documentum, but ultimately concludes that its concept of Information Lifecycle Management is not a bad idea. In ILM, content may be stored at different levels of accessibility depending on its use - deep online storage if it's not being changed or in change-management oriented storage in a system like Documentum if it's an active item. No, this is not Enterprise Content Management the way that folks selling huge output-oriented content systems would have it, but it captures a key factor in the changing face of managing content assets. With capabilities such as EMC's "Content-Addressable Storage" and the more open Digital Object Identifier (DOI) scheme becoming more prevalent, the "where" of content becomes even more abstract than the paragdigms of the Web have provided. The "hows" of content access provided by ECM vendors remain important, but with search technology bridging much of the access to content on an on-demand basis and Web services responding to individual needs for functionality , the importance of permanent portals in providing content is not as central to the long-term success of many content systems as it may have otherwise been. Expect a new generation of disruptive technology to challenge large ECM players' assumptions about how content can be best provided to audiences cost-effectively and flexibly as the Web services era unfolds.

Wednesday, November 26, 2003

The Google Chronicles: Will Chaos Overtake the Search Champion?
In the wake of Fortune's article on the world inside Google and The Register's subsequent spin of the article, it's starting to be a question as to whether the current champion of content search will be already beyond its peak by the time it gets around to its IPO next year - just in time for its portal rivals to be introducing more powerful search technology into their product offerings. Google has assembled a brilliant team of fresh-from-school technologists to assemble its capabilities more quickly and efficiently than any of its rivals, but in doing so the human lessons of creating content for service-oriented audiences that are learned the hard way in the "real world" of business are going neglected in many key areas. While user-friendly features on top of mediocre search results are not likely to pose a major threat to Google's dominance, the team in Mountain View should think a little more carefully about how to personalize their content culture and bring service dominance in line with their technical dominance - before more service-savvy competitors figure out the technology side of the business.

Tuesday, November 25, 2003

Study Shows 13 Percent of Online Citations for Scientific Articles Disappearing
Being able to use the Internet for professional research has been hampered since its inception by the inability of publishers to provide enduring citation references to content stored there. This problem was highlighted in a recent study by team from the University of Colorado published in Science magazine and highlighted at CBS MarketWatch [REGISTRATION]. Over a 27-month period, up to 13 percent of citations for articles in three major journals took a holiday. The OpenURL standards in circulation since May offer some hope that there may yet be a universal solution to this problem, but in the meantime Digital Object Identifier (DOI) System is gaining significant headway in its registration of content objects used in scientific, library and professional publishing circles. While DOI lacks some of the contextual, user-centric finesse of OpenURLs, the ability of DOIs to address the fundamental quandary of providing consistent content addressing capabilities will hopefully provide a way for content providers of all kinds to maintain consistent historical access to many forms of highly valued content. Once content is consistently addressable and in a standard format, though, it places yet more pressure on aggregators to define the value of their services to institutions that are increasingly aware of the power of their organizations to collect and manage content access and distribution on their own.
Navio Recognized for Leadership in Customer-Activated Content Sales
DRM faced another setback as CNET News reports on a hacker who has posted a workaround to Apple's iTunes copy protection scheme, yet again begging the question: why use technology to prevent your customers from helping you to distribute your content? Navio has been trying to answer that very question with its content distribution management service that emphasizes empowering affiliates and individuals to act as redistribution agents for premium content under a wide variety of commerce models. Navio can be used with or without DRM-enabled content control schemes, emphasizing instead the enabling and tracking of the distribution process to the satisfaction of content originators. It's still very early days for this concept, but it is good enough that they have announced receiving an award at the latest Consect Mobile Music Conference. Primary distributors of all kinds of premium content will continue to focus on maintaining control of content through "lockdown" schemes, but it's worth considering how capabilities like Navio may be pointing the way to distribution schemes that more closely conform to the way that people really want to extract value from the content that they purchase.

Friday, November 21, 2003

As Chinese Internet Market Enjoys its Dot-Com Boom, First-Gen Boomers Apply Lessons
Now that the world's largest country is getting serious about Internet content, the Web is doing for China what fifty years of Cold War could not do: open up a formerly closed society to free speech. As noted by the AP, the Chinese government is fighting a losing battle against keeping out dissident voices, even as it manages to set standards for Web site address quality control that could benefit the growth of the industry in the long run, according to Reuters. Yahoo! is very much in the fray in China, recently eyeing the purchase of an Chinese language Internet address firm, according to ZDNet, while it builds the popularity of its own offerings via Internet cafes in major cities in China. Love of freedom may drive use of the Internet by individuals, but its commerce at the heart of China's efforts to build both consumer markets and professional markets that demand state-of-the-art content and communications capabilities. While many native Chinese companies are thriving in this environment, there are plenty of lessons from the first wave of the Web companies such as Yahoo! that can be applied quickly and effectively to this market. How long before the Chinese begin to turn their second-generation lessons into more of a worldwide presence? Brush up on your Mandarin, we'll see where this all leads in the next few years.

Thursday, November 20, 2003

Reuters' Grigson Corrects Erroneous Dow Jones Report, Talks Up 3000 Xtra, Knowledge
[From Shore Senior Analyst Jack McConville]: Dow Jones Newswires mistakenly reported that Reuters chief financial officer, David Grigson, forecast a 2004 revenue decline of seven percent to nine percent for the market data vendor. He was referring to a longstanding forecast for this year, not next. His remarks were made at a Morgan Stanley investor conference in Barcelona today. Reuters will issue a 2004 revenue forecast in January and will have more to say when 2003 results are made public on February 17. Grigson had a lot to say about a new hosted version of Reuters flagship 3000 Xtra application that will eliminate the need for Reuters hardware and software on a user�s site, will reduce bandwidth needs and will work on legacy PC�s. The ultimate objective is to lower the user�s total cost of ownership, a problem that has plagued the vendor for the past several years. Reuters Knowledge is another new product that has been hyped to investors for most of this year. It�s a browser-based service aimed at investment bankers and research analysts and is currently being tested at 2,000 customer sites.
Factiva-Verity Agreement: A Conversation with Greg Gerdy
On October 28th Factiva and Verity announced an agreement whereby Factiva�s content, taxonomies and taxonomy expertise are to be marketed to users of Verity's intellectual capital management solution, K2 Enterprise. Last Friday I talked with Greg Gerdy, Factiva�s VP of Channel Marketing, about the partnership. The agreement fits squarely with Factiva�s strategy of partnering with technology companies that will enable it to integrate its business information with enterprise workflow. Factiva already works with platform providers of the caliber of IBM and Microsoft, portal companies like Plumtree, and application providers to vertical markets like MediaMap and Alacra. As Factiva finds itself moving away from pure content sales, contacts with customers� IT groups become increasingly important. A big plus to the agreement is Verity�s established connections in this part of the enterprise. But how will the agreement affect Factiva Fusion, Factiva�s own �intellectual capital management� solution? Grass roots co-operation is apparently budding between the Factiva and Verity sales groups, where some live opportunities are already in play. For now, the K2 Enterprise or Factiva Fusion question is being resolved at this level on a case-by-case basis. Under the agreement, Factiva�s content, general and pharmaceutical taxonomies, and the services of Factiva Client Solutions will be offered to K2 Enterprise customers. Gerdy also expects that Factiva sales people will actively search out opportunities for Verity and Factiva to work together, with packaging of Factiva and Verity products a possibility at a later date. LexisNexis taxonomies and �concept definitions�, of course, are also promoted by Verity. That agreement, says LexisNexis, remains unchanged.

Wednesday, November 19, 2003

Interwoven Content Management Networks Empowering Institutional Content Publishing
As mentioned in our earlier news analysis, publishing companies are largely still in the starting gate when it comes to the enabling of Web services for distributing their content. In the meantime, content technology companies are enabling institutions to press forward on this front to expand their internal and external content distribution capabilities. With Interwoven's recent announcement of their new Content Management Networks capabilities, the concept of content as both information and experience whose value is best controlled by those closest to their audiences takes a significant step forward. Instead of just modifying information stored in a central database whose display is managed centrally, people in local business units will have the ability to tailor both the information and the functionality to very specific user needs in a highly modular fashion. This autonomy allows departments and other grass-roots units to have much of the freedom offered by independent Web sites while maintaining consistency of contol, storage and deployment. Publishers will need to understand better how to play well in this highly modular content creation and distribution environment to provide effective distribution more quickly than they may imagine.

Tuesday, November 18, 2003

Copyright Clearance Center Extends Licensing Services to Library/Higher Education Vendors
While software and systems vendors wrestle with how to lock down content and software with digital rights functionality, Copyright Clearance Center uses the most powerful force in the world to enforce the rights of copyrighted materials distributors: the human mind. Its redistribution licensing capabilities are enforced at the institutional level, but through its evolving online services CCC provides individual users the ability to comply with - and pay for - the rights to redistribute and reprint copyrighted materials on a voluntary basis when fair use policies don't fit the circumstances. The latest moves by CCC noted in EContent Magazine provide Ex Libris and XanEdu the ability to offer their users relicensing of content via academic courseware and online library services. This should be very fruitful for CCC in both the long run and the short run. In the short run they've managed to target course materials that are high-ticket items with a strong potential for redistribution at a premium, while in the long run they're getting a new generation of users used to the idea of complying with copyright requirements voluntarily in an easy-to-use manner. Making money in content technologies is as much about cultivating profitable habits in users as it is in creating profitable content.
Is Ford�s Move to Eliminate Individual Magazine Subscriptions at Work a Bellwether Event?
Ford Motor Company is planning to save millions of dollars by ordering employees to cancel all paid-magazine and newspaper subscriptions (exempting only the public affairs staff). I decided to weigh in on this story with only the facts from the B2B Online story, since it raises many critical issues that publishers face in selling to institutional clients. I�ll gather more facts and report again when the reasons for Ford�s extreme action become more clear. It�s surprising to me that there hasn�t been more noise from publishing pundits in response to this announcement.

Here are some of the questions the news of this action raises for me:

Is it an indication that senior management will forcefully steer employees to information services delivered to the desktop and away from what management may view as redundant business news in print publications? And, is the reason because the company wants to justify the money that has been invested in systems to deliver the desktop information services and the associated content? Or, does it reflect a view from management that the information in most of the magazines can be found for less money (or free) on the Web?

Cost savings is clearly part of the rationale for ordering the cancellation of the subscriptions. But, does management have a handle on the value of information delivered via the magazines versus other media? Or, does management calculate the value of the information in the magazines to be too low no matter what the delivery medium?

If the trade-off is between print and online subscriptions via an aggregated news service such as those offered by ProQuest or NewsEdge, does management understand what is left out of the online versions of many online magazines and journals (namely ads and some articles for which publisher doesn�t hold the copyright)? Furthermore, do the online subscriptions provide equivalent value, considering the pricing models used for enterprise sales of aggregated news services, which are usually based on number of employees that have access? Basically, could management be providing a more expensive, less valuable alternative to its employees, since most of the hundreds or thousands of publications aggregated into the major collections offered online are read by relatively few employees on a regular basis? And, will employees overlook important information that isn�t compiled and packaged in the portable and browsable print format?

Heck, if the majority of the publications are general interest and entertainment magazines, I side with the CFO. He�s just eliminating a non-business related perk. But, I think there�s more to this story and that vendors that sell news and general business information in print or digital form to institutions should watch the fallout from this event carefully.

Thursday, November 13, 2003

Google (Non) Service: Is This Any Way to Run a Content Technology Company?
We've been making good use of Google's AdWords service as part of our "eating our own dog food" for using contexutal ad services to promote premium content. However, In the past week, the links to the Web pages used to maintain this service seemed to have conked out for us. Resetting routers, etc., didn't seem to help, so I decided to drop them a note on this issue. Like many portal services the links for contacting support are pretty well buried (no phone support, of course), but eventually I was able to find a link to "help@google.com" that seemed to be an appropriate bucket into which to place our request. The email reply autobot got back to us right way and let me know that they "try to send personal responses to each message." Well, 48 hours later, and they haven't tried thus far. Hopefully this is just some weird little anomaly that will make us sheepishly aware of our human limitations, but in the meantime it makes one wonder just how ready Google is for real prime-time operations as a services-oriented company. The concept of "Beta" services as revenue generating capabilities breaks down when customer service is left out of the revenue loop. Technology-oriented companies, even "friendly" ones like Google, tend to skip lightly over many of the human-oriented support issues that make up an important part of the value of an information experience.

Wednesday, November 12, 2003

Tech Market Reaching Bottom, but Content is Leading the Growth
ZDNet reports on recent research that indicates the tech sector has bottomed out at last, and that it can "enjoy" strong single-digit growth over the next couple of years, even as half of the existing tech vendors are expected to disappear, presumably through acquisition or attrition. The era of business plans based on corporations buying an endless stream of $250,000 ROI-enhancing software tools is certainly gone, due in large part to instituions purchasing these tools becoming not only more cost-sensitive but also more aware that it doesn't take huge amounts of IT investment to be a reasonably effective publisher of content, thanks to standards and increasingly open computing options. At the same time to become a very effective institutional publisher requires far more infrastructure integration from storage to Web interface than ever before, leaving purveyors of piecemeal solutions struggling for a place at the table. The tech industry has been coasting for several years on largely modest incremental improvements to fundamental technology, while the content industry has been shaken from top to bottom with radical changes that have required much fundamental restructuring. With firms like Thomson reporting more than 20 percent gains in common stock earnings over last year, expect the winners over the next two years to be those companies which know best how to marry content, technology and human requirements - while pure tech companies go back to the drawing boards to define true technology breakthroughs.

Tuesday, November 11, 2003

eBooks Come to Smartphones with Overdrive Offering
Book reading convenience moved a major step forward as leading ebook vendor, Overdrive, announced support for the Mobipocket format for their ebook titles. While the Palm reader dominates the PDA market, with Adobe and Microsoft competing for the PC platform, Mobipocket is the leader for smartphones. Their software offers cross platform compatibility not just for phones, but also PDAs and PC's. This is a significant advantage in the world of rapidly changing technical gadgets, especially the new generations of multi-function phones growing in popularity, particularly among trendy younger buyers. Look for science fiction to become a best seller in this group!

The cross platform capability is also advantageous to libraries building a lending collection, since any purchased ebooks will be widely compatible with patron devices, a moving target. Overdrive continues to build a leadership position in this market, as well as supplying the retail market. See related report The eBooks Marketplace: A New Evaluation

Monday, November 10, 2003

SAVVIS, Akamai Announcements Highlight Content as the Centerpiece of Managed Network Services
When you have tons of bandwidth and storage but a dearth of people planning to use it, what's the best thing to do? Fill it with content, according to two high-powered networking companies aiming to add a new level of value to their technology services. SAVVIS aims to target the media services market with an encompassing range of media creation, digital asset management, and content distribution delivered as a "Managed Utility Service", according to their announcement. Meanwhile Akamai, which springs from media services, says in its announcement that it is targeting content and applications distribution and management at the enterprise level via the Internet. Managed network services are an interesting and increasingly important example of the melding of content and related technologies to introduce new levels of content services enhanced by both the network and the environment into which a network connects. While not playing the role of aggregators in the strictest sense, managed network services are nevertheless providing common access to both content and technology services that facilitate the use of content in specific work settings. Yesterday's "big pipe" has become today's "big network", blending access, functionality and content in a sophisticated, cost-effective array of services.

Friday, November 7, 2003

Internet Librarian Conference 2003: Quick Takes
November 3-5, Internet Librarian 2003 came back to the superb setting of Monterey, California . As usual, the conference provides an interesting mix of technology and content, this year without the presence of the traditional large aggregators. The exhibit floor had many of the traditional services, including the few remaining subscription services. Some quick comments:

- A major theme in the sessions was incorporating the new generation of software tools into the workflow of the librarian and their clients/patrons, with emphasis on improving productivity and providing additional services, not technology per se. Using search engines effectively was a perennial topic, but consolidation was the news. MSN is hiring top search engine talent, so stay tuned for more mergers and acquisitions.

- Emergence of librarians as digital publishers was a theme throughout sessions. Elizabeth Lane Lawley, Rochester Institute of Technology, bridged the technology and content worlds, with lively presentations of �born digital publishing� illustrating her coursework, grant application, and professional blogs. Marcia Olstead, a librarian disguised as a senior product planner at Microsoft (the 3rd largest website in the world), described the positive impact of developing document standards and providing XML based authoring tools to over 100 groups who needed to publish marketing, documentation, and support materials in multiple formats. Catherine Candee of the California Digital Libraries, provided insight into the complexities involved in operating in depth academic publishing initiative, with multiple authoring groups. An extension of that role is then working with the UC Press to actual production of scholarly monographs, both in print and electronically.

- Attendees filled the room for the panel on �e-books: The Third Generation�, organized by Don Hawkins, Information Today. Cindy Hill, Sun Microsystems, described using user surveys to obtain funding for ebooks for the engineering groups, then getting rave reviews on the completed projects. Dennis Dillon detailed University of Texas usage statistics developed over six years, which showed significantly lower costs in utilizing ebooks over print books. Both organizations utilize the "one book, one user" model of NetLibrary.

- Meanwhile, the next generation of ebook providers were on the exhibit floor, with Christopher Warnock describing the eBrary implementation at Stanford University. Both eBrary and Knovel have significant added value of context searchability across multiple books and digital content, with pricing based on users, not volumes, an attractive service model for libraries. And for all these customers and providers, the biggest hurdle is getting the titles they want in electronic form!

- XML has become the standard format, supported by the new generation of library tools and software. The very popular sessions on blogs (aka weblogs) were indicative of the growth of this flavor of author friendly XML tools. Web design sessions are a standard topic at the conference, but now with an emphasis on improving the user experience.

- Fund raising is not a topic usually associated with being an internet librarian, but an evocative evening session on funding dilemmas for public libraries was quite apropos, given the budget crises in California and other large states. The challenge is that about 90% of funding for public libraries comes from tax monies. Funding from multiple sources is a superior model, and has been accomplished by National Public Radio. In my backyard, the new Martin Luther King Library in San Jose has been a smashing success in combining a public library with a university library to improve services for both constituencies�and opportunities to appeal to both for contributions. Kudos to Rebecca Jones, of Dysart & Jones Associates, for focusing on the bigger picture of ensuring that money is available to purchase the technology and fund the librarians.

Thursday, November 6, 2003

Will Success Spoil the Search Engine Marketing Party?
At this week�s Ad:Tech conference in NY, Search Engine Marketing (SEM) was a hot topic. According to MediaPost Communications, there were at least 11 panel discussions devoted to SEM. At an estimated $1.4 � 1.6 billion in ad revenue in 2003 and growing by leaps and bounds, SEM is deserving of the attention it has been getting from the media, especially due to the success of Overture�s and Google�s search engine ad networks and contextual ad placement programs.

But, as big name advertisers increasingly get involved in a territory that was formerly dominated by Web content managers and publishers, how will the expanding supply of paid listings affect the costs of SEM? And beyond ad cost, how will the popularity of SEM affect the quality of the search experience for the user? The providers of the ad networks that place paid listings and contextual ads will have to refine their processes for accepting and posting paid listings to ensure relevancy for the users. With contextual ad placements, the challenges are even greater since there are three parties to please: the advertiser, the user of the Web site who sees the ad, plus the publisher of the site where the ad is placed. To be most effective, the ad content needs to be relevant to the user who is viewing the content on that Web page and it needs to be acceptable to the publisher of the Web site. Clearly, there is lots of room for innovation in the �contextual ad� space and the increasing dollars being spent on online advertising by the major players in advertising will help encourage further investment in technology and applications, which should benefit Web publishers and information seekers alike.

Wednesday, November 5, 2003

Comtex Tightens Relationship at Wholesale Level with Integrator Pinnacor
Comtex News Network has announced that they are expanding their relationship with content integrator Pinnacor to further its wholesale business of providing streaming news feeds to institutions in finance and other sectors. The news feed aggregator business has fallen on hard times in many ways, along with other content aggregators that do not offer significant integration capabilities. While it's too early to make the call for a buyout of Comtex by Pinnacor, they are caught between the pressures of news search engines on the open Web and the need to rely on B2B integrators to position its content in institutional portals that no longer try to emulate the "dot com" look and instead focus on business process integration. Wholesaling content will have its place, but without a strategy to provide a wider range of value-add services and its sources becoming ever more adept at XML-based normalization of their services, Comtex, like many aggregators, faces the uncomfortable prospect of becoming little more than a subscription agent for a range of content services that's likely to decrease over time. Unless Comtex and similar companies can provide more value-add services to their content suppliers, they will probably be better off merging with those that can provide better services to their content consumers.
Dow Jones Counting Web Noses Along with Print Subscribers to Boost WSJ Circulation Numbers
The Wall Street Journal [PREMIUM] reports on a 16 percent rise in its paid subscription circulation - based on the inclusion of paid online subscriptions with its print base. With average weekday circulation of the WSJ flat at 1,800,650, the 400,000 online-only subscribers (counted as about 290,000 for paid circulation purposes) represents a significant increase, and brings the Journal within spitting distance of USA today's leading circulation. While advertisers are a little uncertain about what this means to them on an apples-to-apples basis when comparing online to print populations, it's a clear indication that online sales are going to lead the news industry out of its perceived slump. The Journal's willingness to accept the necessity of taking online sales seriously early on has certainly yielded them major benefits. Those publishers that lag in creating effective monetization strategies for their online publications will certainly suffer the most, yet it's far from clear the the WSJ's transferral of its general subscription model at a lower rate to Web-delivered content is going to work for other less-prestigious publications - or for the Journal itself in the long run. Building online content value through a widely engaged community will require new techniques for monetization barely explored by most online publishers.

Monday, November 3, 2003

Alacritude Takes the FAST Track to Power eLibrary and Encyclopedia.com Searches
Online premium research and reference provider Alacritude has chosen to power its online searches using the FAST Data Search platform for both its eLibrary and Encyclopedia.com properties, according to FAST. The FAST technology is well suited to Alacritude's needs, which span professional, academics and consumers looking for a reasonably priced alternative for access to a broad range of premium content. FAST plays a strong second fiddle to Google and others on the public Web, but in institutional settings where more finely tuned searching and indexing is required to meet the needs of professionals trying to locate premium content and to track its usage effectively, FAST is a smart step to take to get more of a thoughful, premium feel to search results. For highly structured content such as the journals and papers in eLibrary's collection, this is a good move, just as Google and other engines more focused on unstructured content have their own strengths. A properly matched search engine is essential to online success, but it cannot replace the need for content that's worth the price of admiission. Finding what you're looking for has to assume that your needle is actually in the haystack - which is why so many people still prefer the open Web for finding facts to higher quality but more limited subscriptions sources. Hopefully more services will combine the strengths of the open Web and premium content not just for technology, but for content, as well.

Friday, October 31, 2003

Yahoo! Enterprise Integration Falls as Its Focus on Individuals Clarifies
In the wake of Yahoo!'s termination of paid video services, CNET News reports that their move to profitability is now sending its Enterprise Software division out to pasture. Unfortunately the sophistication required for most business-oriented portals has eclipsed the ability of most consumer-oriented portal development tools to compete in the increasingly crowded market for Enterprise Content Management. The move towards tighter corporate governance is creating far more complex content management solutions than those offered by consumer-oriented portals, even as new collaborative and content seaching requirements have pushed most major institutions towards solutions that are highly tailored to the specific publishing requirements of task-driven professional communities. Companies like Yahoo! will continue to thrive in the professional space, though, through their ability to service professionals as individual consumers and as members of a greater professional community outside of the firewalls. Being able to leverage that more public professional arena is the greatest untapped potential of the public Web today.

Thursday, October 30, 2003

Yahoo! Pulls Plug on Paid Video Service, Ponders Possible Packaging
CNET News reports that Yahoo! has decided to call it a day for its paid video clip service, while considering other models under which to monetize streaming video content on the Web, including a possible fold-in to its Yahoo Plus service. This is just the most recent of a string of concessions on the front of video subscriptions for consumers that sprung up in the "we must make it pay" craze of the post dot-com era. With Microsoft offering ad-supported video that is free to consumers via MSN, it's not surprising that these earlier models are withering away. On-demand streaming video is a highly valuable source of content, but its image quality limitations and competition from hundreds of cable and satellite video channels make it difficult to determine its true value based on the merits of delivery alone. Streaming video needs much more context-oriented content that can be produced around it and add value to the video experience to justify premium prices charged to online consumers. A picture may be worth a thousand words, but having the thousand words on tap that match its value is the true key to online distribution success. It works for audio content on the Web, and it works for video on DVDs, so there's no reason to think that online video content can't consider the same model for success more actively.

Wednesday, October 29, 2003

Hyperfeed Spins off Realtime Financial Market Data Clients to IDC to Concentrate on Integration
Hyperfeed Technologies announced that IDC's ComStock unit will be picking up its financial market data clients for USD $8.5 million, along with transitional licensing rights to their client-side and ticker plant feed management technologies. Paul Pluschkell, HyperFeed's President, emphasizes that it's a move to enhance their technology licensing business, which has seen a number of strong deals in the past few months, but certainly the increasingly strong relationship between Moneyline and both of these companies has to play a significant role as well. Moneyline's flexible approach to content integration allows players like Hyperfeed and ComStock to fit into the picture on a partnership basis with major clients very effectively. Content aggregators and their content suppliers in many market sectors are taking a similar approach to deployment technologies, trying to focus on providing value to their core collections through whatever deployment technologies bend themselves to the needs of their clients. Companies like Hyperfeed are smart to elect to be a highly competent technology piece in a highly collabrative approach to content delivery, rather than a moderately competent solution to a greater part of the content delivery problem, and leave the broader questions of providing content value at the level of business solutions to players like Moneyline, and questions of managing content collection subscriptions to players like IDC. Where this leaves companies like Reuters, which has decided to outsource much of its content solution "smarts" to Accenture, remains to be seen.

Tuesday, October 28, 2003

Enabled By Technology and Interactivity, Web-based Directories Emerge as Marketplaces
Thomas Register, the venerable 33 volume directory of industrial products, is alive and well at over 100 years old. And, although the print version is still used by many sales and purchasing managers, the Thomas Register has thrived because it has become a online marketplace where buyers and sellers interact. Buyers can find the precise goods they need, download CAD drawings to include in their bill of materials, select a vendor, and even place orders from the site. Sellers benefit from including more detailed product descriptions (with aforementioned CAD drawings), product catalogs, along with services that allow buyers to place orders directly from the site. Thomas Publishing clearly understands the value of providing technology-enabled content solutions to its core audience.

I had the pleasure of hearing Ruth Hurd, the VP, Publisher Operations at Thomas Industrial Network, speak at the InfoCommerce 2003 conference held in Philadelphia October 27-28. Infocommerce, a new incarnation of a long-held conference for directory publishers, is now in the very competent hands of Russell Perkins and his InfoCommerce Group .

Russell put together a diverse group of new and veteran directory and database publishers, including well-known names like D&B, infoUSA, Martindale-Hubbell (and several other Reed-Elsevier representatives), along with some more specialized names, such as Columbia Books which publishes an intriguing database that lists lobbyists and their clients, and Eliyon Technologies , which creates a database of profiles of business people using technology that scans the Web and extracts data uses algorithms to determine if information relates to a person and his or her job and then uses matching algorithms to compile additional information on each individual entry. Jonathan Stern, CEO of Eliyon, is first to admit that the current algorithmic approach is far from perfect, but it quite good for top level executives (with lots of coverage), and the positive response to the database, perfect or not, has demonstrated how much demand there is for people information on the Web (I suppose Classmates.com has already proven this point).

The opportunities for directory publishers on the Web are glaringly obvious. Like search engine users, users of a directory are in inquiry mode, often with the aim of buying goods or services. With the interactive capabilities and ecommerce technologies, Web-based directories can provide tons more value than print to users in terms of faster access and streamlined (and more informed) purchasing.

But, in an ironic twist, if you start with a major search engine, you won't likely find results from these rich sources of product information at the top of your search listings, partially due to the text-oriented search algorithms and in the case of Google, its page-rank algorithm. This is beginning to change as directory publishers work with the big search engines to find a solution. As they get closer to a more functional solution, search engine users will certainly benefit from the rich information they will find in directories. And directory publishers will benefit from greatly increased traffic when the greater universe of search engine users at Google, Yahoo, and MSN start being directed to product (and other) directories for relevant queries. With search engines eager to include more quality sources content in their universe of coverage and Web advertising growing at a fast clip, now is the time for directory publishers to be working on their plans for leveraging the monetization possibilities that are inherent in being the owner of a marketplace on the Web.

Monday, October 27, 2003

Warm User Reception for Amazon Book Search Feature
Amazon.com's new capability to search the texts of books in its catalog, which we previewed in this Weblog several weeks ago, is finding a warm reception from users and librarians alike, according to the San Jose Mercury News and other outlets. This capability opens up a whole world of content for Web-trained consumers of all kinds, who now have the ability to browse true premium content online. The search is as simple as any other Web site interface, and returns the book title, purchasing info and an excerpt showing search text in context. Click on the page reference link, and you get an image of the page with the phrase "Copyrighted Material" embedded in the image. A little awkward, but perfectly acceptable for many browsing needs. Getting the most relevant context for a given phrase is still somewhat a work in progress: Entering the phrase "now is the winter of our discontent" returns a critical analysis of William Shakespeare as the first choice, but the bard's play Richard III that opens with this line was not to be found - perhaps not among the texts provided by the 190 publishers participating in this exercise. It's early days, so no doubt it will take some time to get meaningful correlations between user iterests and titles, but overall it's an encouraging performance. The ability to browse book content online elevates books and book browsing into a new realm of relevance and value, and through Amazon's aggressive promotion of search integration technologies it should make its value known not just to consumers but to institutions as well in short order.
Reuters Group 3Q Results in Line, No Revenue Turnaround in Sight
Reuters Group PLC issued its third quarter trading statement this morning in calls with analysts and portfolio managers in London and New York. These trading statements do not include profit disclosures, which Reuters is obligated to report only twice a year. Group revenues for the three months ended September 30 were �658 million down 12 percent on an actual basis from �716 million in the same year-earlier quarter and were in line with expectations. Chief executive officer Tom Glocer reiterated forecasts of an 11 percent decline in recurring Group revenues for 2003. He will provide 2004 revenue guidance in mid-January. Glocer�s presentations are a bit like reading tealeaves. Analysts and portfolio managers hang on his every word and nuance for signs of a turnaround, i.e., plus signs in front of revenue disclosures as opposed to the steady stream of negative comparisons over the past several years. Most see the turn coming 2005. Glocer disclosed that Reuters would make the JPMorgan eXpress electronic trading platform available to its global customer base as another offensive/defensive move against Bloomberg in the fixed income space. Glocer also said that TIBCO would file a registration statement within the next ten days covering the planned distribution of part of Reuters� 49 percent interest in TIBCO shares. Proceeds from the sale are estimated at US$230 million. Reuters also intends to float a bond issue in the next several weeks with the proceeds being added to working capital. No details were disclosed.

Friday, October 24, 2003

Primedia Continues to Rationalize, Sells Sprinks Ad Service to Google
At the SIIA's Brown Bag lunch panel this week, Sprinks General Manager Lance Podell characterized the service's capabilities as being somewhat the "anti-Ad Sense" approach to contextual advertising with its more topic-oriented approach to ad placement. No doubt with the announced purchase of Sprinks by Google noted by Reuters and other sources, future wording of these differences will be noted as being "complementary". Sprinks avoids a lot of the inherent pitfalls of trying to come up with effective contextual matches on a page level when placing ads in sites by sticking to a topic-based placement, and this seems to be an effective approach for advertisers who are trying to capture broader audiences efficiently. All the stranger, then, that Primedia would dump this property to raise cash for shoring up some yet-to-be-defined core of stable print publications. Primedia's loss is certainly Google's gain as it becomes an increasingly powerful force in the online ad world, but one wonders what Primedia will do to grow its business in the long run without securing key elements of online profitability. Print as a medium will exist indefinitely, but for those companies that cannot adapt an effective and profitable online identity to complement and bolster the print medium, print as a business will continue to look bleak, no matter how many babies are thrown to the wolves.

Thursday, October 23, 2003

Online Ads Booming as Traditional Outlets Suffer
Maybe if you build it they will come...as WSJ Online [PREMIUM] reports that major media players are suffering great softness in their traditional advertising bases, Silicon.com reports that online ads are growing strongly in European markets, paralleling similar online ad growth reported recently in U.S. markets. With the generally weak global economy, print is a luxury that fewer can afford on a regular basis, wheras the typical consumer's online investments are relatively fixed assets that can deliver new information and experiences without having to truck down to the local newsstand, and viewed increasingly as essential to both personal goals and professional goals such as job searching. Print will continue to provide a very valuable, portable and persistent advertising medium, but our latest economic downturn may have marked the turning point of print being thought of as the leading advertising medium. Online advertising is still a nascent and primitive art for the most part, but its potential to drive both personal and professional content and services is beginning to ascend to a leading position in driving content economics.

Wednesday, October 22, 2003

OpenText Picks Up IXOS as Content Management Continues Consolidation
As noted at Internetnews.com and other outlets, OpenText's purchase of the German ECM firm IXOS takes some pressure off of the content collaboration company's market positioning as a less-than-complete publishing and management solution for content. In general, though, this is a continuation of a trend in which partial managment of the entire content lifecycle via technology is just not cutting it in the marketplace. The productivity benefits for content creators and publishers fall increasingly on the top and bottom ends of the publishing spectrum: on the top, the ability for individuals to communicate effectively via content to highly targeted audiences, and at the bottom, persistent storage and retrieval options that are independent of specific delivery platforms. CMS publishing systems between these top and bottom layers are important, but only one of a wide variety of content sources that need to be integrated for most institutions. In essence, CMS as a standalone concept is falling victim to the same forces of disintermediation that are engulfing the world of professional publishers. OpenText's move is a solid one from a technology sales perspective, but challenges still remain ahead for them and other technology companies as they try to add value to content that's increasingly in the hands of its creators to manage and distribute.

Tuesday, October 21, 2003

Harvard Skepticism of Elsevier Journal Bundle the Tip of the Iceberg
The Library Journal reports that Harvard University is weighing seriously its renewal of a multi-year package of eJournals from Reed Elsevier, a package made available through the Northeast Research Library consortium. As much as the bundle can be a saver with the 20 other universities that purchase the content collectively, tight budgets are forcing Harvard to consider how to purchase specific journals that return value more efficiently and effectively. Harvard is not alone, apparently: the article cites a recent Association of Research Libraries (ARL) study in which 40 percent of respondents indicated that they were "planning to cancel or were considering canceling a bundled package this year." The emerging trend towards research being distributed through non-traditional channels is doubtless part of Harvard's concern about signing a relatively long-term deal. It's a quiet way of saying that the aggregation business is going to be very different three years from now - and sooner.