Wednesday, April 27, 2005

Aggregators Buoyed by Economy, Core Businesses Uptick

Recent earnings and forecast reports by Elsevier, InfoUSA, and Thomson point to a strengthening market for their core database products, even as rumblings of Reuters raising pricing on its financial data offerings indicate one of the "whys": seat counts are stabilizing for the moment in major sectors such as finance that had been bleeding users for the better part of four years. For the moment the economy is providing major aggregators some breathing room and some cash flow from existing products to concentrate on acquisitions that are allowing them to penetrate new and existing market sectors more effectively. This is reminiscent of earlier economic recoveries, providing a sense that there is a certain return to "normalcy," albeit with some whistling in the wind. When you look carefully, the gains are strongest where investments in more content integration and workflow capabilities are paying off in conjunction with key acquisitions feeding these systems. This sophisticated approach to creating content value draws database publishers ever closer to being primarily software solutions providers that happen to have licensed content at their disposal, even as software providers move increasingly towards subscription models that resemble long-established content licensing models. There's reason to enjoy this recovery in the short run, but expect more solutions to reach the marketplace in the next few years that make it easier for professionals to purchase both content and functionality in a more modular, ad hoc fashion that can move very quickly to adjust to rapidly evolving client requirements. Aggregation is here to stay, but the value proposition is still on the move away from database publishers that cannot become the center of a user-centric content consumption culture.
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