New Developments in Content Licensing,
Open-Access Publishing, and More
By Paula Hane
Once again, the past month's
news has been dominated by the RoweCom/divine situation. As this issue went
to press, EBSCO had purchased RoweCom's European businesses from divine and
reported that it was making significant progress in the purchase of the non-European
operations (which primarily include the U.S., Canada, and Australia). However,
a leading Australian news source (http://www.news.com/au) reported
that both Swets Blackwell and DA Information Services were also interested
in acquiring the Australian RoweCom business. Check http://www.infotoday.com for
updates on the proposed acquisition and news about the lawsuit filed by RoweCom
against parent company divine.
Meanwhile, divine very much wants to distance itself from the RoweCom debacle
and focus the media's attention on its other products and services. The company
has just announced an upgrade to the content management platform it acquired
from Open Market 2 years ago. The new divine Content Server 5.0 makes it easier
for nontechnical users and business partners to contribute content by using
Microsoft Explorer functionality. Users can drag-and-drop documents into publishing
Other improvements include enhanced globalization features, automatic filtering
for transforming content into HTML or XML, and expanded support for Web services.
In addition, the new version features the divine Content Server Autoclassifier.
This is an advanced taxonomy and classification capability that leverages technology
divine acquired from Northern Light to automatically categorize and tag content
saved to the Content Server.
By the way, divine has closed its (Northern Light) Special Collection service.
The public site has been shut down and its enterprise customers have been transitioned
to Factiva. (For details, see the interview with Factiva CEO Clare Hart on
SPARC continues to aggressively push its agenda of "returning science to
scientists" and furthering competition in the scholarly communications market.
The organization's membership now numbers approximately 200 institutions in
North America and beyond. SPARC Europe comprises nearly 50 additional members
and is growing. SPARC is also affiliated with a number of major library organizations
around the world.
The Open Society Institute's (OSI) Information Program, along with SPARC,
has announced the publication of two new business guides for developers of
open-access journals. The "Guide to Business Planning for Launching a New Open
Access Journal" and the "Guide to Business Planning for Converting a Subscription-Based
Journal to Open Access" were developed under contract with the SPARC Consulting
Group. Both are available for free and are downloadable from the OSI Web site (http://www.soros.org/openaccess).
In a recent letter to members, Rick Johnson, SPARC's enterprise director,
said: "The staff of SPARC recognizes the financial and other challenges many
of you face this year. These certainly underscore the need for changes in scholarly
publishing. Perhaps the strains created by the RoweCom/Faxon debacle and library-funding
constraints will help broaden understanding of some of the cost benefits of
SPARC recently reviewed its 2002 activities (http://www.arl.org/arl/activities/2002/sparc.html) and
issued the 2003 SPARC Plan (http://www.arl.org/sparc/core/index.asp?page=a20).
The organization's operating priorities for 2003 are the following:
Encourage adoption of
Support community-based digital publishing in the social sciences
Encourage and enhance the
viability of alternative scholarly communications ventures
Expand grass-roots scholarly-
Propel SPARC's agenda
Raise awareness about the adverse impact of consolidation in
SPARC also announced its partnership with The Review of Economic Theory (RET),
a new journal published by the nonprofit U.K.-based ELectronic Society for
Social Scientists. RET competes with the commercial Journal of EconomicTheory,
which has an annual subscription rate of $2,228. The new publication will cost
$350 but is offered free to countries with developing and transition economies.
This partnership marks SPARC's entry into the social sciences arena.
Reuters was due to report its annual results as this issue went to press,
but no one expects the company's prospects to improve. It has been wrestling
with declining revenues (down 7 percent in the third quarter), unhappy shareholders,
and a gloomy outlook for the future. It has cut staffing and costs, but analysts
are generally not optimistic about the company's prospects.
A few companies in the information industry are beginning to show some signs
of revenue growth and increased profitability, despite the tough economic conditions
and constraints on corporate spending.
D&B reported fourth-quarter earnings of $64.3 million, compared to $53.9
million for fourth-quarter 2001. Revenue rose to $356.1 million from $337.1
million. D&Bhad announced it would cut costs, sell its European headquarters,
and put more focus on Web-product delivery.
In early December 2002, D&B made a $7-per-share purchase offer for Hoover's.
(See the NewsBreak at http://www.infotoday.com/newsbreaks/nb021216-1.htm.)
Hoover's shareholders were due to vote Feb. 14 on the acquisition, but this
was complicated both by a lawsuit that seeks to block the purchase and by a
competing bid of $8 per share. Marathon Partners, a 9-percent shareholder,
teamed up with technology investor Austin Ventures to fight the D&B purchase
with the higher offer. D&B said it would not raise its bid.
Hoover's announced that it would "convene, but immediately adjourn" its special
meeting of stockholders scheduled for Feb. 14 and reconvene it on March 3,
2003. Hoover's also said that Marathon Partners agreed to dismiss its pending
lawsuit against the company and its directors. Then, as this issue went to
press, Austin Ventures and Marathon abruptly withdrew their competing bid,
making it more likely the D&B deal would go through. It sure looks as if
the lawsuit and bid were just designed to drive the purchase price higher.
Hoover's said the March 3 meeting will still be held. Check http://www.infotoday.com for
In late January, Hoover's reported its results for the quarter that ended
on Dec. 31, 2002. Net income totaled $318,000 compared to $122,000 in the same
period last year. Subscription revenues grew 31 percent over the prior year
and now comprise 81 percent of total revenue. This figure is up from 67 percent
a year ago. At the end of 2002, Hoover's had 8,919 enterprise accounts, an
increase of 244 from the end of the previous quarter.
The fourth quarter and full-year 2002 results for Moody's Corp. were even
more impressive. President and CEO John Rutherfurd Jr. said: "Moody's produced
outstanding results in 2002 after very strong growth in 2001. Moody's Investors
Service achieved significant revenue growth in most ratings sectorsincluding
global structured finance, European ratings, and U.S. public financeas
well as in global research. In addition, Moody's KMV had excellent growth,
exceeding our projections at the time of acquisition."
Moody's revenue for the 3 months that ended Dec. 31, 2002, totaled $271.9
million, up from $220.9 million for the same period in 2001. Net income for
the fourth quarter of 2002 was $69.8 million, up from $58.8 million in the
prior year's quarter. Net income for 2002 was $288.9 million, up from $212.2
million in 2001.
OneSource also closed out the year solidly, announcing its 10th consecutive
profitable quarter. But the numbers were lower for the quarter and year compared
to 2001. The company reported revenues of $14.6 million for fourth quarter
of 2002, compared to $14.9 for the same period in 2001. For all of 2002, revenues
were $57.8 million versus $59 million for 2001, a drop of 2 percent.
During 2002, OneSource launched a number of new products and enhancements.
Chief among them is Synergy Solutions, which enables customers to seamlessly
integrate OneSource data with internal and other external information in applications
such as CRM systems, portals, and intranets.
OneSource president and CEO Dan Schimmel said, "[In 2003], we plan to focus
our efforts on creating products and providing services that capitalize on
the growing demand for functionally specific solution sets." He said that these
initiatives "will require increased spending of approximately $2 million to
$3 million in 2003 compared with 2002," but the company believes "this is an
ideal time to invest in the opportunity to distance ourselves further from
The M&A Scene
One company I've covered since its launch is iCopyright, the instant licensing
service. In an interview in the November 1999 issue ofInformation Today,
Mike O'Donnell, iCopyright's founder, president, and CEO, discussed the need
for a system that automated requests for content reuse and talked about his
fledgling company's plans.
Over the years, we have reported on iCopyright's Instant Clearance System,
Publisher Central, Reprint Central, and most recently, the beta version of
its Clip and Copy news-clipping service (http://www.infotoday.com/newsbreaks/nb020909-1.htm).
More than 6 million works from hundreds of publications, including those from
Tribune, Reuters, Primedia, Reed, and Dow Jones, are tagged for instant licensing
But iCopyright struggled when the economy turned sour and venture funds dried
up. At one point, O'Donnell left the company. He then returned in April 2001
after forming Data Depth Corp. to reacquire the assets of iCopyright.
Now Data Depth has sold the iCopyright Instant Clearance Service to Reprint
Services of St. Paul, Minn. Reprint Services acquired the installed base of
publishers and end users, but Data Depth will continue to own and develop the
technology. Reprint Services will operate the iCopyright Instant Clearance
Service under a license from Data Depth, with O'Donnell acting as an executive
consultant. Reprint Services also licensed the iCopyright trademark, which
it's using to rebrand the service as RSiCopyright.com.
Reprint Services is a custom publishing reprint supplier that has been in
business since the 1950s. The acquisition will now provide customers with a
single sourcefor licensing online and offline content. In a conference call
with the press, O'Donnell said that the combined company represents the culmination
of his 5-year goal to provide an integrated solution for the publishing industry.
He noted that iCopyright had tried partnerships over the years with Kinko's,
Reprint Management Services, and others, but they had "never clicked."
O'Donnell said that Data Depth and Reprint Services share the same vision:
All copyright in all forms should be and can be instantly licensable. "Publishers
will make more money and readers will be better served," he added. Within a
few weeks, RSiCopyright expects to release the full version of Clip and Copy
and offer a sleeker user interface and other enhancements.
Infotrieve Bulks Up
In late January, Marydee Ojala reported on Infotrieve's move to dominate
the document delivery market with its acquisition ofTheScientificWorld's (TSW)
assets and RLG's Ariel software (http://www.infotoday.com/newsbreaks/nb030127-2.htm).
Ariel allows libraries to electronically convey and share scanned or digitized
documents as high-resolution TIFFs or in Adobe PDF. Infotrieve's purchase of
Ariel will allow for market expansion and technical enhancements.
Ojala rightly noted that with these two acquisitions, libraries' options
for choosing a document delivery company have narrowed considerably. She said: "The
only other company that comes close to doing what Infotrieve does is Ingenta.
Now that Infotrieve has added the editorial capabilities of TSW and the instant
delivery of scanned scholarly articles, it has much more to offer."
For the latest industry news, check http://www.infotoday.com every
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Paula J. Hane is Information Today, Inc.'s news bureau chief
and editor of NewsBreaks. Her e-mail address is firstname.lastname@example.org.