Tuesday, October 12, 2004

Telecon with Clare Hart of Factiva: Further Details on the LexisNexis Deal

I tweaked our earlier entry based on some details from tonight's analyst telecon with Clare Hart, CEO of Factiva, but some additional details and thoughts are worth mentioning from comments on the call follow. [14 October- CORRECTION FROM FACTIVA: It is FACTIVA clients in the Legal sector who have a year from next March to migrate from Factiva's platform to LexisNexis. Thomson West clients will no longer receive Factiva content from 1 March 2005 onwards. Our apoligies for the incorrect info, entry has been corrected below.]

- Terms of deal remain undisclosed in all aspects - including the length of the contract. Not entirely unusual, but if I'm a customer being told that you're going to have to cut over to LexisNexis, I'd sure like to know what I'm getting myself in for. Is there more to this deal than we're seeing thus far? TBD.

- Legal clients using Factiva will have 12 months from March 2005 to cut over to LexisNexis. As of 1 March 2005 Thomson West clients will no longer have access to Factiva.

- Reaction from clients is all over the map, a fair amount of enthusiasm no doubt in some quarters, but also a lot of questions as to what it all means. Hopefully we will be of assistance in this regard.

- This is a deal strictly for the for the Factiva publications archive, in essentially the same form that was provided to Thomson West. LexisNexis becomes the sole provider of this archive for the named Legal sectors, and apparently will have little if any technology transfer from Factiva - including any of its value-add content analysis tools. It's questionable whether LexisNexis would use its Total Search capability to provide a federated search of Factiva, my sense of it is that the content's coming in the back door of LexisNexis infrastructure for the sources that it already doesn't have - mostly content from Factiva's parents.

What does this all mean? Nothing much came out in the telecon in terms of strategic motivations, but my sense remains much the same as in my original posting: there was an opportunity to move Factiva content into key LexisNexis contracts, an opportunity to slow down Thomson's own strategic moves into improved news services, and thus an opportunity to gain some time to reposition Factiva for the long run or further restructuring of ownership. It is certainly a dramatic development for clients of Factiva in the Legal sector, but perhaps less of a dramatic development overall for Factiva as it may seem in the short term. The true drama is where Factiva goes with its marketing model overall. If it continues to cede the desktop high ground in other major verticals, it's hard to see where it's going to be able to advance its value proposition strongly without further bold deals in either technology-based or licensing-based veins. The LexisNexis deal is a content coup for Factiva, but now it needs to consider how it can better position itself for vContent supremacy.
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