Friday, February 27, 2004

The New Third Party Way: Relegence Rides on Radianz

Wall Street & Technology notes the distribution agreement obtained by Relegence to make their realtime premium and Web-based content categorization and distribution engine via the Radianz network to over 12,000 global users in the financial industry. Relegence acquires information from global news-wires, regulatory feeds, television broadcasts, news and corporate web sites, bulletin boards, discussion groups and internal corporate sources and packages it into easy to use interface objects using a wide array of tools to score relevance and provide alerts channels. Most notable in the Relegence suite of capabilities is its neutrality in sweeping through potentially valuable content sources to define what's important content at the moment, be it internal, external, premium or client-supplied - realtime aggregation akin to a Google news service, albeit for more sophisticated ends. Time was when a deal of this sort would have been a major announcement via a major distributor such as Bloomberg or Reuters, but increasingly it's network infrastructure providers who are becoming the aggregators of highest business content value as Web-based services no longer require the services of proprietary vendor networks and user platforms to reach their client bases. A bit like cable TV companies with more competition, if you will. With network vendors managing more content-oriented elements of client connectivity for professionals, they are beginning to regain leverage once lost to the winds of technology commoditization and other more margin-rich players. Expect these network companies to expand their offerings to include content and service billing capabilities that will further pressure traditional content aggregators to define their value points for premium content services.

Thursday, February 26, 2004

Reuters Launches New Portal, Lays It All Out

After years of puttering with half-hearted online presences, Reuters lifted the veil today on its new home site portal. This is far from half-hearted - it's a masterful positioning of the global news, finance and media content company's wide spectrum of assets in a highly usable and attractive venue. The ad-supported site features a general news and multimedia main section complemented by a finance section that highlights Multex-based research, alerts, tie-ins to corporate events sponsored by Reuters and a "Reuters Recommends" section of featured picks from its services. The finance section is oriented towards individual investors, but with a wide array of stock picking and evaluation tools, strong fundamental data and a risk alert evaluation tool, it's a pretty good kit for off-floor financial professionals as well. There's also a convenient individual and corporate signup for Reuters Messaging to encourage the growth of this online investor community. Within the scope of its domain this is a very strong offering in almost every imaginable way. Main weaknesses: it is, as always, a Reuters-only world, which is probably par for the course for a company that is sorely in need of establishing a stronger vContent brand value. Over time hopefully we'll be seeing capabilities to integrate in general Web and third party contextual content sources, which have helped portals such as nyt.com to develop strengths where its core editorial team and ad presences needed a boost. But when one thinks of the painfully slow progression of the Baron's online home from a brochureware nonpresence to various half-hearted interpretations of engaging individuals with Reuters content and capabilities, this represents a statement that Reuters is going to try everything that it knows how to do to compete effectively in the markets for individual content for consumers and semi-pros.

Monday, February 23, 2004

A Hit-a-Person Web Site - Without a Publisher in Sight

I've been reflecting a bit about the CNET News report that highlights the spectacular online interest in NASA's latest Mars mission. According to the report, NASA claims that its home page alone received some 6.5 billion "hits" in the past six weeks - more than one hit for every person on the planet (current population: 6,350,181,520 and counting). CNET notes that raw "hits" are not a very accurate estimate of true Web traffic - unique visits, a more accurate estimate of true human traffic, generally are a very small fraction of the hit rate - so NASA's enthusiasm may be a bit overblown. But still, here is probably the number one Web phenomenon at the moment that has grown almost exclusively from direct lookups and Web search engine referrals, not from the efforts of any publisher or ad machine - powerful mindshare collateral to leverage at the cost of a few Web servers. Probably of more interest to contemplate is the latest estimate on total Web pages that surfaced in a New York Times article on Web search engines - 10 billion pages, if we are to believe the NYT. Looking at the same baseline, that's more than 1.5 web pages in existence for every person on the planet. That brings a whole new dimension to the concept of global content markets, does it not?

In Premium Weblogs: MasterCard Buys Tower Group, Thomson and TradeWeb, UBS Moves to RMDS, Reuters Improves Trends

In our Financial Content and Technologies weblog Shore Senior Analyst Jack McConville reports on Reuters finally shedding its Tower Group research unit, buzz around Thomson's possible acquisition of TradeWeb, UBS moving from its Triarch platform to RMDS and a detailed look at the improvements in Reuters financials. more...

Saturday, February 21, 2004

Reed Elsevier's LexisNexis Improves Profit

It helps to be diversified. LexisNexis had near flat revenue growth in North America, but the legal division of ReedElsevier's (RE) revenue growth was positive (in constant currencies) due to faster revenue growth in its International division and the online segments. Better yet, as the Dayton Business Journal reports, profits were up in the legal division by 10% in 2003 versus 2002. LexisNexis wisely focused on cutting costs and devoting resources to new online initiatives and acquisition of legal application providers (such as Applied Discovery), which are resulting in strong growth. In the webcast to analysts and the preliminary results report for 2003, RE's CEO, Crispin Davis, refers several times to "weak demand" for business information in the UK and "flat" revenues in the US corporate and federal markets. LexisNexis was able to offset the slow or negative growth in these segments and report a profit of 10% because of its efforts to provide additional value to its legal customers through such product initiatives as the interactive versions of its Martindale-Hubbell directory, which includes a separate Web site, lawyers.com, devoted to the small law firm market. Mr. Davis states that lawyers.com currently has 1 million visitors per month, and with the interactive version, Lexis is finding new ways to provide client development services to the lawyers and law firms who are included in the directory. Lexis' current directions represent an excellent example of creating vContent: combining high value content, enhanced with technology, to meet specific needs of its community of users.

Thursday, February 19, 2004

Dow Jones Buys Alternative Investor Group, Seeks to Broaden Base

Dow Jones has announced its intention to acquire Alternative Investment Group, a Wicks Business Information stable of databases, newsletters and conferences for the venture-capital and private-equity markets, for USD 85 million. Rafat Ali sat in on the announcement conference call and notes in his weblog that Dow Jones 'fessed up in the call to a "significant contraction amongst its key customers," noting a 29 percent drop in their domestic user base. Put simply, the Joneses have been out of touch with many core equities market events as of late, skimming along on general news, market commentary and pungent editorials that do little to give people detailed insights into key deals on upcoming companies. In my daily skimming for headlines I try to make it a point to peruse WSJ Online out of respect for their historically strong coverage, but as of late it's too oftent that I fail to come up with significant information on key content companies that is not just a rehash of press releases or very focused on large media companies that are not at the heart of much of the true growth in content and related technologies. Bolstering its resources available in the Alleys and Valleys is certainly an important factor for capturing a younger and more venture-oriented readership that is adapting ever more quickly to new sources of market-moving news on young and developing companies, but packaging their content in a way that can keep up with those markets' expectations may continue to be a challenge for Dow Jones as they try to leverage one of the most enduring franchises in business content into the 21st century's expectations.

Tuesday, February 17, 2004

Factiva Integrates with PeopleSoft Portal Using Web Services Kit

Confirming the importance of Web services as a tool for enterprise portal integration, premium aggregator Factiva announced the availability of their content via PeopleSoft's ECM platform using their Factiva Developer's Kit, a Web services-based application programming interface that allows Factiva content to be displayed contextually within a user's web page and to be able to use the "pagelet" interface to initiate searches for additional content. While not the first premium content provider to offer their wares via a major ECM portal provider using Web services integration, it is certainly a very significant offering that underlines the importance of content providers developing personalized content delivery services that recognize the primacy of enterprise content management tools as the context in which content is being consumed at the institutional level. As major organizations learn to leverage the power of their own content resources with ECM tools and other publishing and collaboration capabilities, vendors such as Factiva can expect to refine their "content concierge" capabilities within this user-aware environment using far more than mere taxonomy tools to refine content sets to the needs of specific users and the problems that they are trying to solve. Web services provides the easy-to-integrate modular approach to delivering such services, and is the key venue that premium sources can expect to exploit in the next few years to deliver maximum value to their institutional clients.

Media Market Failure, Marginal Cost Pricing, and Economic Collapse

Holy smokes! I've been waiting for an economist to chime in on the open access debate and the issue of whether digital content should be priced at marginal cost. All I can say is: be careful what you ask for! The FT article by Eli Noam, a professor of economics and finance at Columbia University paints a bleak picture of the direction the media industry is headed. While I agree with many of Professor Noam's points about the problems for content producers if they are forced by competitive pressure to sell their goods at marginal cost, which for digital goods approaches zero, I don't think that disaster looms for all media companies. The biggest hole in his argument relates to the commingling of broadcast media with exclusive (or user-selected) media. Noam says that "Online publishers cannot charge their readers, except for a few premium providers such as the FT." And states further that "Newspaper prices barely cover the physical cost of paper and delivery; the content is thrown in for free." Well, newspapers have been surviving on the "free" content model for decades. They rely on another source of revenue: advertising. Almost any media outlet designed to reach a large audience with diverse and divergent interests traditionally has depended on advertising revenue, largely due to the difficulties in asking users to pay for a large collection of content when only a small portion is highly valued by them.

However, exclusive content, or what Noam calls premium content, has traditionally been priced and packaged to appeal to a smaller, more homogeneous audience. It's with exclusive content that Noam's argument stands up to scrutiny. Why should exclusive content that is highly valued by a well-defined segment of the population, and only of peripheral value to the vast majority, be forced to price at marginal cost and absorb all production costs even if it results in a loss? It shouldn't. In the media industry, value pricing is essential. With broadcast media, the value has to be set for some low common denominator. But with exclusive media, the value should be reflected in the price.

Buzz About Local Search Continues

Monday's NY Times article, New Sources of Online Ad Revenue, plugs into the attention that is getting lavished on the Interactive Yellow Page (IYP) segment. As the IYP sites such as Superpages from Verizon and Switchboard.com have improved their functionality and have started adding contextual ads, the online advertising community has focused its attention on obtaining a share of the advertising dollars spent by local merchants in traditional Yellow Page directories. The Times piece states that "traditional Yellow Pages providers express doubt that local search advertising will take away from their traditional print business revenues." The statement isn't attributed to any particular Yellow Pages executive, most likely because whoever expressed the sentiment was either fooling himself or hiding his true feelings. Print Yellow Pages advertising grew a measly 1% last year and is projected to grow at the slowest rate of any advertising segment in 2004, according to Bob Coen of Universal McCann. Based on the accelerating shift from print to online in total advertising, I think Coen may be too optimistic with respect to print YP advertising growth and that more listing companies will shift their dollars to IYP and other online advertising vehicles. Just as search engine advertising has grown in popularity, due to its measurability and reach, IYP advertising is getting more interesting for all types of merchants who have previously advertised in traditional YP. If 44% of customers are performing more online searches to find local merchants (as the Kelsey Group report quoted in the Times article indicated), then the advertisers had better pay attention and explore online advertising outlets, whether it be IYP or other sites that can effectively match local merchants with interested customers. [See additional commentary on local search in earlier Weblog.]

Sunday, February 15, 2004

In Premium Weblogs: Special Searches Shine, U.S. Copyrights Bind, OneSource Switches, MarketAxxess IPOs, Merrill and Earnings Update

In our Content eCommerce weblog, Shore Senior Analyst Janice McCallum examines the role of iPhrase and other highly targetable search services in content environments that bring together buyers and sellers. more...

In our Financial Content and Technologies weblog, Shore Senior Analyst Jack McConvile profiles the pending IPO of the bond trading service MarketAxxess, Looks at Thomson's latest financials and the migration of Merrill's FirstCall clients to the Thomson ONE platform, updates changes at Goldman Sachs, peeks at the Reuters report on an SEC proposal to eliminate exchange market data fees, puts Reuters' buildup to financial results on the 17th in the spotlight and examines the potential entry of Eurex into U.S. commodities markets. Phew! more...

In our Business Content Suppliers and Aggregators weblog, Shore President and Senior Analyst John Blossom highlights ValueAct's taking off the bluff and putting in an offer for OneSource after all. more...

In our eResrouces Marketplace weblog Shore Senior Analyst Jean Bedord takes a look at Google's paper-based venture into enycylopedia co-branding while John Blossom notes how U.S. trade pact moves for Australian are placing new demands on libraries for copyright fees. more...

Friday, February 13, 2004

Mouse Trapped: A Brief Take on the Comcast/Disney Deal

The whole Disney/Comcast flap is consuming the mainstream media, so it seems to be worth at least a quick look. Our recent news analysis on building content brands went to the real heart of the matter in some ways: content companies that rely on artificial controls such as copyright enforcement to prop up the value of underpowered content assets inevitably face trouble. Disney walked away from its key competitive advantage - industry-leading animation technology - and decided to rely on the power of ancient brand icons that no longer build margins. Moral: pass on value-enabling content technology and your profits and power will pass you by. As for the rest, talk to the mouse.

Thursday, February 12, 2004

Smooth Sailing for Online Advertising Growth?

The latest numbers from the Interactive Advertising Bureau as reported by Cnet show record-breaking results for online advertising sales in Q4 2003. Ad sales of $2.2 billion for the quarter topped the best previous results from the height of the dot-com boom (Q4 2002, which were $2.12 billion) and represent an increase of 38% over Q4 2002. Given that advertising sales across all media were up in the quarter and are projected to grow 6.9% in 2004 (as projected by Bob Coen of Universal McCann), one can safely predict that the rising tide of all advertising will raise the online advertising sales' boat in 2004. Add to the overall trend the ongoing shift from print to online, especially in the B2B space where print advertising has been lackluster at best, and the forecast of smooth sailing for online ad sales growth is a good bet. Throw in the fact that major advertisers, notably car companies like Ford, DaimlerChrysler, and of course Mitsubishi's SuperBowl ad, are having great success with multi-channel campaigns that use TV ads to drive viewers to a Web site, and it becomes difficult not to be jubilantly optimistic about the prospects for online advertising. But, is the outlook all bright skies and smooth seas? Unlikely. There are bound to be some choppy periods while search engine paid listings and contextual ad programs work out some kinks. These are still very new programs that will undergo some growing pains as they try to serve a range of business marketers who don't want to be glued to their computers checking on their bidding position and budget balances. Corporations that publish on the Web are also in early stages of figuring out how to create a Web site that is designed to work in harmony with its online advertising tactics so that the Web site responds appropriately to various types of visitors, who may be coming to the site to research the product offerings, buy a specific product, find the address of the company, or look for jobs posted on the site. But, it looks as though we're heading for a fun and interesting year, full of new advertising opportunities for content-rich Web sites that offer appropriate ad locations for the fleet of advertisers ready to hand over their dollars.

Lycos U.S. Abandons Content Portal Strategy, Goes Social

According to Internet News and other sources, the U.S. operations of international Internet portal and services provider Terra Lycos have decided to call it a day with its lagging search-and-content portal efforts and to devote its operations entirely to becoming the center of a "vast social network." Already successful with dating-oriented services and its Tripod web site services, The Lycos crew seems to see the future in inverting the content equation - making socially-defined content the valuable core of a Web portal and other content peripheral. When you're no longer in the running for a dominant presence in the traditional portal market, it's not a bad idea to try to flip things around and to center your unique content-generating assets. As indicated in the New York Times, technology is evolving rapidly to increase both computing power and bandwidth radically over the next decade, a factor that is sure to accelerate the migration of valuable content into the hands of its creators and consumers more than intermediaries. General-interest portals are here to stay, but increasingly the trend will be towards content services that start from the individual on out, not the content on in. Social content will be the backbone of such services, so Lycos may be on to something, here.

Wednesday, February 11, 2004

Tarzan Economics: Is There a Better Way Forward Than DRM?

The Register features an interview with Jim Griffin, CEO of Cherry Lane Digital LLC and a key participant/instigator of Pho, a movable feast of digital arts luminaries who contemplate the intersection of content, technology and people - vContent - from a media perspective. Jim's take on what he sees as the inevitable democratization of content distribution is that today's copyright defenders are clinging on to existing concepts of content distribution control like Tarzan clinging to a vine while seeking out the next safe swing forward. What's the next big leap? If you believe Jim and Harvard University Professor Terry Fisher, it's to put in effect a tariff structure on ISPs or some similar common choke point and then meter out revenues to copyright holders based on calculated usage, similar to what's done today with radio performance royalties. Professor Fisher reckons that this could boil down to as little as USD 6 a head monthly for music rights - a bit cheaper than the $20,000 it would take to fill an iPod with 99-cent songs, as Jim Griffin points out, and certainly more equitable in concept. Is royalty estimation a fair or practical system to implement for digital content? While this concept has some merit, it assumes that it's going to be easy to track usage in a way that estimates actual usage. With a multiplicity of platforms and peer-to-peer content sharing allowing increasingly localized content sharing and creation, this model has some hard limits that are difficult to overcome. But selling licenses to own an experience in a specific venue or context is not easy to do when the value of "owning" digital objects is still an ambiguous and evolving concept, so it's understandable that a levy may appeal to major interests that can leverage governmental controls easily. DRM is likely to become a strong concept not from the efforts of major publishers but from the efforts of individuals and institutions trying to penetrate markets with unique and socially defined content that's not easily forced into a "water through the pipes" tariff model.

FindWhat Well Poised In Local Contextual Ad Space

FindWhat.com made the headlines with its news about finally signing a deal to acquire UK based Espotting Media. It's healthy earnings for Q4 2003 and 57% growth in revenue compared to Q4 2002 are also newsworthy. But, the bigger news may be the upcoming relaunch of Verizon's SuperPages with pay-per-click listings provided by FindWhat. If FindWhat can establish themselves as a leader in providing pay-per-performance advertising services to merchants that advertise in Interactive Yellow Page (IYP) directories, they will be able to ride the wave of growth in local search. Their simple key-word model works well with yellow page content, and they are packaging their PPC service with features that appeal to small businesses, such as automated bid management. According to a study released by the Kelsey Group in December, 2003, only 3% of the $22 billion spent on local advertising in 2003 was spent on online search advertising. With so much attention focused on growth in the local search sector, combined with the measurable effectiveness of pay-per-performance online advertising, FindWhat is in a good position to profit from the shift of advertising dollars from offline yellow pages to online IYP and other local search sites. [See also complementary Weblog on InterActiveCorp, Local Search, and Specialized Directory Search.]

Goldman Sachs Reportedly Sacks Equities Traders and Staff

According to stories from Reuters, Goldman Sachs reportedly sacked a number of equities traders and related staff. The investment bank would not comment. Reuters' unnamed sources indicated that the cuts involved "employees that generated the least profits in a variety of equities businesses. The so-called cash equities area -- executing plain vanilla stock trades -- has been hit the hardest, they said." I phoned around and no one would go on or off the record to confirm or deny the reports. But, cutting marginal businesses makes good sense regardless of where we stand in the cycle. The equities end of the business is marginal at best if one looks at the simple task of taking an order from an institutional client and executing it. Institutional clients are not spending five cents a share for executions anymore. So for a sell-side firm to keep a structure intact that involves block desk traders, sales traders, research analysts and support staff does not make sense. The ominous side to the report? Less bums in seats means less monthly revenues from terminals and accesses, a fact that Reuters, Bloomberg, Thomson Financial and Moneyline Telerate must keep in mind.


Monday, February 9, 2004

Reuters Offshoring Movement Takes on Editorial Desk Functions

As reported by the Associated Press Reuters Group PLC is going to use six journalists in their Bangalore, India offices to provide basic corporate announcement reporting on some 3,000 U.S. companies. Reuters reports that these are new positions that are not going to result in the replacement of any existing journalists in U.S. or other markets. Reworking corporate press releases and earnings statements has always been a news desk nuisance, never fully automatable but never taking a high level of jornalistic support, so this indeed represents a step forward for journalists heretofore assigned to low-value news items. There are surely any number of offshoring horror stories to be heard these days, but independent of the politics involved this movement promises to be a huge boon to the professional content industry, which is hard-pressed to defend licensed database margins using labor-intensive quality control techniques. If content companies can follow the Reuters example and create new opportunities for skilled employees in local and Indian markets through offshoring, they can build better margins not only through lowering production costs but by concentrating the efforts of the highest-skilled workers on the products that will provide the highest value.

Is the Internet/Intranet Gap Widening? Moreover Study Points to Strong Trends

It's been established for some time that institutional content users have been using the Internet for serious business searches, but now comes data from a study conducted by Moreover Technologies which implies that the public Web may be a far more serious source of content for business than ever before. According to Moreover's announcement, the survey of 2,200 knowledge workers indicated that 57.8 percent of respondents said that the Internet was their primary information resource in their daily work, compared to 10.9 percent who considered the Intranet to be their main source of information. 47 percent of survey respondents claimed that all of the information they needed for work was available on the Internet, while 69% labelled Internet content "very valuable" to their work. These kinds of statistics can be very misleading - do people really know what an Intranet is, even today, as opposed to an internal Web site or portal that they may not be able to distinguish in their minds from the public Internet - but they point to the increasing value of the open Web as a serious busines resource that is not going to go away anytime soon. Services such as Salesforce.com that make it easy to integrate professional-grade content into a relationship management system easily accessed via the public Web, as well as the increased presence of serious business content sources available for subscription online, only add to the inevitable gravitas that a public network offers to serious content purchasers. Publishing organizations need to continue to recognize that their ability to have an organization that knows how to publish with at least the same efficacy of public sources is a key to ongoing competitive success.

In Premium Weblogs: Reuters Results Razzmataz, CBOT/Eurex Moves, Web Services' Progress and Google Encyclopedia Links

In our Financial Content and Technologies Premium weblog, Shore Senior analyst Jack McConville previews earnings results from Reuters and the press push leading up to them and digs into the escalating challenges that Eurex poses to the Chicago Board of Trade's model. Shore Senior Analyst and President John Blossom attended the Web Services on Wall Street conference and reports on the slow but steady progress of Web services in specific market niches, while Shore Senior Analyst Jean Bedord takes a look at a Google-branded children's encyclopedia in our eResources Marketplace weblog.

Sunday, February 8, 2004

Australia Government Gets Serious about Digital Content, Clamps Down on KaZaa

In an interesting juxtaposition of events, the Australian federal government announced at the Australian Interactive Multimedia Industry Association (AIMIA) awards in Sydney a new initiative to focus on the growth of its digital content industry, according to Australian IT on the very day that investigators working on behalf of a trade group representing Australia's recording industry office conducted a raid on the offices of the KaZaa file sharing service to search for evidence of copyright violations, according to CBS News and many other major sources. Australian trails the U.S. and the U.K. in media content's share of their GDP, according to Australian Federal IT and Communications Minister Daryl Williams (3.3 percent versus the U.S. 5 percent and the U.K.'s 7.8 percent), but at AUD 19 billion it is hardly a drop in the bit bucket. It's not clear from the news reports that there is any connection between the KaZaa raid and the Australian government's trade negotiations with the U.S. but on the surface it would seem clear that the Australian feds are sending a message to their U.S. and other media counterparts that they're willing to support global efforts to clamp down on copyrights if that's what it takes to play more strongly in the electronic content big leagues. While the move against KaZaa is sure to please Australia's partners, it is not likely to tone down the public's interest in pursuiing legitimate sharing of intellectual property. Content is an industry, to be sure, but one in which the cottage aspects of production are beginning to loom larger in comparison to the content factories of earlier generations.

Friday, February 6, 2004

Will Google be a Player in the Print World?

Google IPO chatter is the hot topic here in Silicon Valley, feeding hopes that venture capital will flow freely once again. Though the poster child for a creating a successful online business, Google is now using the time honored strategy of moving into multiple channels, and that includes the very traditional print medium. I opened the January/February issue of my slick color copy of EContent magazine with a two page color advertising spread for Google AdSense, plus a print article about "Content Goes Googling for Dollars". Publishers have content, Google has traffic, and advertising generates money. But the selling of that concept is more effective, and reaches deeper advertising pockets in the print world, not the online world. Five years after its launch, the two worlds are starting to look integrated in the Google context. See related research on contextual advertising models by Shore Senior Analyst Janice McCallum

Thursday, February 5, 2004

Rescuing Reuters: Turning the Corner?

BusinessWeek reports on the progress of Tom Glocer's efforts to turn around the venerable content company from its revenue tailspin. As subscribers to our newsletter already know, our own Jack McConville's research on market share was quoted in the article, their share of market revenues in 2003 continued to hold steady (40 percent) even as Bloomberg has gained significantly (44 percent, a 3 percent jump over 2002), according to Jack's estimates. Glocer's solution: simplify the product mix from some 1,300 worldwide products, cut costs, improve service, keep people focused on the bottom line and not the "OxBridge" debating society niceties that used to prevail oftentimes in the "old" Reuters. The simpler tiering of products and price points is bound to be beneficial, but in addition to that there needs to be more of a match of product image and mystique to the needs and interests of the Bloomberg audience it is trying to displace on the high end. Just as GM is retooling both the image and the substance of its product line from its prestigious Cadillac division on down to humble Chevrolet, Reuters must create a "must have" aura at the top of its line that appeals very broadly to the financial marketplace - even if the content and features are not a complete match to utility in all sectors and user roles. Content products must appeal to the "gut" as much as the mind to gain that extra share of margins that "vContent" products demand. Sometimes utility is as much about who we would like to be as it is about who we are.

Schimmel Out, Martin Kahn In as Interim OneSource CEO

OneSource Information Services, Inc. has announced the resignation of Dan Schimmel, OneSource's CEO of twelve years. The CEO position will be filled temporarily by Martiin Kahn, OneSource's board chairman and Venture Partner at Rho Ventures, a major OneSource investor. A special committee was established in October by OneSource to evaluate options for the company's ownership model in response to leading stock holder ValuAct's desire to take the company private. Having failed to find a buyer through this committee process and having leading stock holder ValuAct souring on taking OneSource private, OneSource will now take a look at its options for re-energizing content aggregation and distribution strategies, most likely as an independent public entity. While revenues continue to look solid for OneSource, their financials released today for their Q42003 indicate flat performance and annalized contract values down 6 percent from the same 2002 period. OneSource has a lot of good options for themseves to return to solid growth, which we'll explore later in our Business Content Suppliers and Aggregators premium weblog, but the nutshell view is that OneSource must extend its business model to acquire new client bases more aggressively in those portions of the economy that will be growing most quickly in the months ahead. This will require breaking "out of the box" of enterprise licensing models and extending their value-add equation with new tools and methods, some of which are already coming to fruition. OneSource is an excellent source of quality content: getting it to be vContent will be the key to improved margins.

Monday, February 2, 2004

The Gathering Storm: Microsoft and Google Parry at Davos Retreat

The New York Times headlined its Sunday business section with an in-depth look at the brewing search wars between the two online giants. The lead illustration for the article depicts Bill Gates peering through the often-tweaked double "O"s that appear on Google's home page. Google really raises Microsoft's hackles from any number of angles: they run open-source Linux operating system software on their servers, they have trumped Microsoft early and often with clever desktop integration features and they are still, generally, very well liked for their anti-hero image. So when Gates says at the Davos, Switzerland executive retreat that "We'll get them," one senses that it's more than just Netscape redux that Microsoft has in mind. Will Microsoft crush Google with superior search technology? On the merits of technology alone Microsoft may achieve some kind of parity, but on the level of business models it may be hard for Microsoft to dissect Google any time soon. Unlike Netscape, Google has been extremely innovative in defining new ways to make money on the Web without asking anything of its users except to use them. There are no software fees to undercut, no overambitious developers thinking to take on Microsoft head on with bloated office automation software. Lack of humility can undercut any young and successful company, but Google's ability to accept and adapt to the existing terrain of desktop technology and to focus instead on content value may yet steer them away from a fatal encounter with Redmond.