FEATURE
ProQuest: Adding Dialog to the Mix
by Phillip Britt
ProQuest, a part of the Cambridge Information Group (CIG), continues to take giant steps to enhance its business. According to officials at the Ann Arbor, Mich.-based company, these enhancements are designed to position the firm for worldwide growth in its niche market, a direction the company has taken ever since it merged with CSA in 2007.
This year has been particularly busy for ProQuest. For starters, 2008 generated plenty of new growth:
• This winter, ProQuest acquired RefWorks, LLC, web-based research services for academic and research communities.
• This spring, it acquired federated-search pioneer WebFeat.
• This summer, it purchased Dialog from the Scientific business of Thomson Reuters.
• And most recently, this fall it partnered with Google to digitize millions of pages of local newspaper collections for the open web.
“Both [ProQuest and CSA] have had histories of growth through acquisition,” says ProQuest CEO Marty Kahn, acknowledging that the earlier combination “is by no way complete.” He says the companies are continuing to integrate their technologies, which is a critical step so the company can maximize the benefits from its most recent additions.
“ProQuest is doing a good job picking up the right pieces for the right reasons,” says industry analyst John Blossom, president of Shore Communications. “Content aggregation is not what it was 20 years ago. It is no longer sufficient just to license different collections. To bring in revenue in order to thrive and survive, you have to offer value-added services.”
Big M&As
The biggest recent acquisition was the purchase of Dialog from the Scientific business of Thomson Reuters this summer for an undisclosed price. Dialog, which provides controlled searching of online databases, adds more nonacademic search, which ProQuest officials expect to help the firm better position itself in corporate and worldwide markets.
“We’re working hard on becoming a global company,” Kahn says. “The market is tough in the U.S.; the market is growing faster outside [of this country]. That’s not a surprise. We thought that over time that information markets would become more global. That means selling ourselves throughout the world.”
Dialog will help ProQuest because it has “a well-recognized global brand,” particularly in sophisticated research, pharmaceuticals, chemicals, and government markets, Kahn says.
A Rich Retrieval Heritage
Founded 40 years ago by Roger Summit, Dialog was the world’s first online information retrieval system used globally with commercially important databases. Dialog online-based information services help organizations across the globe seek competitive advantages in such fields as business, science, engineering, finance, and law.
“The companies’ content and market strengths complement each other and just as important is the match with our values—we share a deep understanding of the library community and commitment to serving it with high-quality information tools,” Kahn says.
Dialog retains access to databases owned by Thomson Reuters, including Derwent World Patents Index, BIOSIS, Investext, SciSearch, and Trademark Scan. Dialog also has access to more than 15 terabytes of content from many of the world’s most authoritative publishers.
The acquisition of Dialog also includes the company’s DataStar unit, which has access to more than 350 databases of worldwide business and technical information. The data offers rich information about companies in Europe and in the biomedical, pharmaceutical, and healthcare industries, according to Kahn.
Dialog will operate as a separate business unit with its headquarters in Cary, N.C., though Dialog and ProQuest will share human resources, accounting, and financial departments. As a separate business unit, Dialog will have control over its product development, management, and other functional areas as well as its own resources (facilities and equipment). The company is also in the process of rebuilding its sales force. The sales unit remained with Thomson Reuters following the sale.
Rebuilding the sales force and upgrading the company’s technology to include Web 2.0 and other features are key elements for Dialog, says Suzanne BeDell, Dialog general manager. BeDell moved to Dialog from her position of senior vice president of ProQuest’s higher education publishing area since 2006. Though Dialog will operate as a separate business unit, she will report to Kahn.
“Adding the corporate and worldwide information available through Dialog is part of the vision we’ve had since we merged with CSA in February of 2007,” BeDell says. “We needed a strong presence in the corporate market. Dialog gives us that.”
Rolling Out New Products
Yet BeDell acknowledges that there are challenges that must be overcome even before Dialog attempts to launch new products.
“We are a dedicated sales and marketing team and building a product development and platform management team,” she says. “These people will help to guide the technology investment. The Dialog product platform is outdated, and we will refresh the Dialog and DataStar applications by migrating them to a new platform, integrating infrastructure and the back office for efficiencies while continuing to support the existing business of high end mediated, transactional search.”
Though officials from both sides of the sale agreed that Dialog was a better strategic fit with ProQuest than with Thomson Reuters, Kahn expects continued competition from Thomson Reuters as well as from Reed Elsevier and EBSCO Industries, Inc.
Kahn admits that it could be some time before Dialog can produce all of the expected benefits because it will take some time to upgrade Dialog’s underlying technology. There hadn’t been much investment in Dialog when it was part of the Thomson Reuters family, Kahn says. ProQuest plans to “aggressively invest” to build out Dialog’s suite of databases to open up the architecture for more precise searching.
“In the short term, we will look for ways to leverage ProQuest’s proprietary and licensed content,” says BeDell. “The combination of CSA’s proprietary bibliographic files, new capabilities like Illustrata and the recently acquired RefWorks, full text licensed by ProQuest and the Dialog search capabilities make for a powerful combination.”
The two companies already had an association, even before negotiations started with Thomson Reuters earlier this year. Dialog already carried 10 databases from ProQuest and 28 from CSA. Technology integration will be critical to adding more databases from ProQuest and CSA.
Dialog’s New Offering
Though much of the future direction of the company is still being worked out, Dialog is already beta testing one new product, NewsRoom Plus, to be launched in December. NewsRoom Plus is Dialog’s newest business and news information offering, BeDell says. It provides access to more than 12,000 business and news publications alongside 26 million hours of video and more than 10 billion web documents.
The NewsRoom Plus material is contained within federated search, which BeDell says gives users access to premium business and news information while providing a contextual view of user-generated content on the open web.
Kahn adds that ProQuest parent company CIG is committed to investing and building Dialog. “Some say it will take many years to realize all of the benefits,” he says. “We’re not kidding ourselves, it will take time.”
When complete, the technology upgrade will enable customers to search and collect content behind the company’s firewalls and on the open web to provide comprehensive source material, according to Kahn.
Whereas BeDell and Kahn acknowledge that moving forward with integrated technologies will take some time, they see integration of personnel as a much easier matter. Sometimes a clash of cultures ensues between the two different companies in corporate mergers; no such challenges are expected here.
“We felt that the culture and the approach to the market for the two companies has been similar,” says Libby Trudell, vice president of marketing for Dialog. “Our community understands ProQuest’s business. Dialog brings a loyal, global customer base. This is a good strategic fit.”
Further down the road, Dialog, ProQuest, and their customers can expect to benefit from an electronic billing and payment system, Kahn says. More companies in various industries are going to electronic invoicing and payments, which removes paperwork, reduces errors of rekeying information from one system (accounts payable) to another (inventory), and minimizes disputes because billers and payers have access to the same invoicing and payment information.
Other Acquisitions
Though Dialog was ProQuest’s biggest acquisition in the last year, it wasn’t the only one.
In mid-January, ProQuest acquired RefWorks, LLC, a provider of web-based research management, writing, and collaboration services for the academic and research communities. Parent company CIG had an ownership position in RefWorks since May 2001. When CIG acquired the remainder of RefWorks, ProQuest was able to integrate RefWorks into its COS business (which serves the same market) to create single-source networking and management tools for scholars around the world.
RefWorks tools complemented COS Scholar Universe, Kahn says. With RefWorks and COS joining forces, researchers will be able to turn to one source for tools to help them identify colleagues with similar research interests around the world, establish alliances, and manage joint research projects, according to Kahn.
In August, following the purchase of Dialog, ProQuest announced new features for its RefWorks business unit. Users can now use author linking with profiles for COS Scholar Universe and non-English multilanguage custom formatting.
The author-linking feature, Author Resolver, links author’s names from the RefWorks database, which includes more than 1.7 million authors, university faculty members, and other scholars.
The new RefWorks features debuted a week after ProQuest announced that it had added newspapers and online historical documents to the company’s offerings. ProQuest now offers customers The Scotsman, Scotland’s newspaper of record since 1917, and newspapers from Ireland, South Africa, New Zealand, and the Middle East. Also included was an online version of Documents of British Policies Overseas that provides online searching for tens of thousands of U.K. government documents relating to Britain’s international relations, including foreign policy instructions, letters, memos, business reports, and other documents.
Earlier this year, ProQuest also acquired WebFeat, a pioneer of federated search to tap into all an organization’s databases simultaneously. ProQuest merged WebFeat with Serials Solutions, ProQuest’s Seattle-based business unit and developer of e-resource access and management tools for libraries.
“We’re not looking to make three acquisitions every year,” Kahn says. “But we were able to do these without adversely affecting our balance sheet.”
Another big move ProQuest made without affecting the bottom line of the balance sheet was a partnership with Google to digitize the content of small and large newspapers and bring the content to the open web. This new partnership doesn’t impact ProQuest’s other digital newspaper collections such as its ProQuest Historical Newspapers, which will continue to be developed for researchers who need more serious research tools. A standard variety of advertising and ecommerce models will support the content delivered via Google’s platform in the open web. The partnership has already started and is expected to continue for years to come.
Kahn adds that the company is making these acquisitions with the goal of “investing and building the company over time,” but there are no plans to become a publicly traded company.
Analyst View
At least one industry analyst sees ProQuest’s moves as beneficial for the company.
There is little or no value in the simple collection of information because of all the free information available on the internet, says Blossom. So the value-added services are what the customers will pay to have.
While the acquisition of Dialog and the evolution of RefWorks broadened the business for ProQuest, the company still needs to work on its value proposition for customers, Blossom says. “This may take a while. RefWorks will help toward that, but it’s more of a starting point than an end point.”
So Blossom recommends that ProQuest focus on value-added services, particularly in the higher education marketplace. Though Thomson Reuters and Reed Elsevier are stronger in the scientific, technical, and medical marketplace right now, that part of the publishing business is fluid, with opportunities emerging on a regular basis. ProQuest will look for potential opportunities there as well, says Blossom.
ProQuest could also benefit by integrating its offerings more effectively with the information that customers and prospects can find on the open web, he says.
Though other acquisitions may occur in the future, ProQuest is more focused on growing internally than going through acquisitions, according to Kahn. The company’s most recent moves are designed to make its offerings more appealing to a worldwide market.
Turn to page 38 for a first-hand account of the DataStar days; turn to page 27 for more about Suzanne BeDell.
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