Information Today
Volume 18, Issue 6 — June 2001
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IT Interview •
Dialog CEO Optimistic About Opportunities
Roy M. Martin Jr. promises technology investments and ‘evolutionary’ enhancements
by Paula J. Hane

Thomson Corp. purchased Dialog from its British owners on May 4, 2000, and in November named a seasoned Thomson executive as Dialog’s new president and CEO. Now that Roy M. Martin Jr. has had 6 months at the helm, I talked with him about the organization’s recently announced 2001 strategies, as well as his long-range plans for the company and its place within Thomson. 

Q Before being named CEO of Dialog last November, you held several key positions at Thomson with the West Group and Thomson Legal Publishing. Tell our readers a bit about what you worked on and how you see those previous experiences helping to prepare you for the tasks you face at Dialog. 

A I’ve been with Thomson for over 8 years and before that I had about 15 years’ experience in the computer systems and software industry. At Thomson, my last position was executive vice president and chief strategy officer of Thomson Legal & Regulatory, where I spent a lot of time on business development, acquisitions, and helping to put together our international strategy. I traveled frequently and worked with a number of publishers and companies around the world. Before that I was in charge of strategic marketing for West Online, responsible for content, marketing, pricing, product bundling, and product development. Both of those positions proved to be very relevant for what we are doing at Dialog. Dialog is a worldwide business with offices in 30 countries and we do business in 100. A lot of the opportunities for Dialog are in the areas of content, pricing, marketing, branding, distribution channels, and so forth. So, a lot of what I’ve done for Thomson seems to be a direct fit with what the opportunities are at Dialog. 

Q You’ve now had about 6 months at the helm of Dialog—learning the people and the company and working on strategies. What do you think are the top challenges that Dialog faces today? 

A I think that to understand the challenges you have to look at the assets and the things you’re good at. From Dialog’s standpoint, our brands have great equity in markets around the world. Our content assets are both broad and deep. The technology-based search tools we have across all three of our product lines—Dialog, DataStar, and Profound—are among the best in the industry. System performance for us—the sheer speed of searches and the way our systems operate—is also top-notch. Those things are real strengths for Dialog. 

Certainly the opportunities for us revolve around getting pricing right on our products, and getting our product bundling and packaging correct, both in the sales and marketing areas. From the sales perspective, we have over 200 people around the world calling on customers every day. We have customer service and product support in three major locations around the world. We could probably coordinate those a bit better than we do, in order to maximize the assets that I mentioned. I think most of our customers would agree with us on these opportunities. 

Q I notice you call them "opportunities" rather than challenges. 

A Some people might think that’s just a play on words, but for Dialog I think it’s the correct way to look at them. 

Q Your recent series of announcements indicated very clearly that you would continue the company’s traditional focus on the information professional—it still seems to be your bread and butter. But haven’t overall subscriptions been going down? Isn’t this an area under stress? 

A On the first point, we thought it was important to make a clear statement to the market and our customers about our focus. Over the last few years, there may have been some mixed messages from Dialog about the things we valued and the customers that were important to us. At the core of our efforts for almost 3 decades have been the librarian and the information professional researcher. Our product revenues today are largely derived from that market and our marketing and sales opportunities are focused in that market. Part of the focus of the press releases was to make sure the market understood where we were heading and what things were important to us. 

If you look at overall subscriptions, Dialog has suffered some decline in the last few years. Some part of that was the result of the $75 per month minimum fee that was instituted by Dialog a while back. It tended to have the effect of causing smaller subscribers, who weren’t spending to that level, to look elsewhere for services. Within our core market, particularly the large companies that use our products and services, overall our subscriptions have been pretty steady. We hope to turn this into a growth area over the next few years. 

Q Besides providing this clarification of focus, your recent announcements lookedto be rather status quo. By that I mean no big shake-ups. You still maintain three separate services: Dialog, DataStar, and Profound, each with several iterations. Since you also rolled out new graphical marks for the products it looks like they will continue with no major changes. 

A There really are three themes for us as we move forward: investment, growth, and customers. A key area for investment for Dialog and Thomson is in the infrastructure of Dialog—part of it is simply business systems, billings systems, [and] customer service infrastructure. But the larger part is the technology infrastructure itself, which we will be investing heavily into over the next 3 years. We hope this will have a direct and positive impact on our products. But I think those changes will be evolutionary rather than revolutionary. We are looking to continually improve the products we have. 

In the Dialog line, we’ll be expanding from our base. We now have six products in that line, from Dialog Classic to the newly announced Dialog1. We also have the whole suite of intranet tools. In the Profound line, we’ve just completed a pretty significant overhaul of the product line, which affects performance and our ability to add new content to it. We will continue on that as well as potentially extend the Profound brand. We’re continuing to evolve the DataStar line as well. 

Q At one time there was talk about merging Dialog and DataStar. Apparently it wasn’t feasible then. Is this a possibility? 

A It’s definitely a possibility. We’re evaluating the treatment of the brands and the overlap of content. We’re also looking at the way we manage the data internally—both acquiring the content and tagging it—and the way we handle it in our data center. Certainly Dialog and DataStar are a lot more similar than dissimilar. I think Profound serves a bit different market and has a different equity with its brand, in who it appeals to. We’re looking into it and I hope later this year we can make firmer statements about the direction we’re heading. 

Q I had heard that a lot of the unique content on Profound was going to be added to the main Dialog service. So then the reasons to continue Profound would be its branding and special markets? 

A Profound actually has other unique features, besides those two, which are quite important. The InfoSort technology that we use as the underpinning for Profound lets people do some unique things when they are looking for content. For instance, on Profound, instead of buying an entire report, which in some cases can cost thousands of dollars, our customers can target smaller chunks of a report for more economical usage. 

Q And that’s not doable on Dialog? 

A Not in the way that you can on Profound, not today. Some of the content is on both Profound and Dialog. For example, we have an exclusive distribution agreement with Frost and Sullivan, and we market their reports on both. The bigger focus we have now is on aggressively adding to our market-research content. Over the next few months we hope to have a series of announcements about additional content on Profound, some of which may be available on Dialog as well. 

Q I understand that a user of Dialog can’t use his password for billing in DataStar—that there’s an accounting limitation between services. 

A We’re keenly aware of the password issue. You actually need separate passwords for all three of our products. Going back to my opportunities list, one of our opportunities is to help customers who have two or three of our products to handle that differently, as well as handle the billing differently. Now a customer gets three bills. Our larger customers have asked us to make changes in these areas, and we’re really looking at that pretty hard. We hope to have some announcements about that later this year. 

Q As someone with a software and technicalbackground, is it feasible to consider building common technical platforms for the services? What kind of re-engineering would be required to link the platforms, have them be compatible, and share information? 

A Yes, absolutely, it is feasible to consider. If you look back over the last few years, when MAID purchased KRI, one of the themes for MAID at the time was combining the platforms and product lines. From an operations and technology standpoint, that’s easier said than done. And that’s not unique to the Dialog product lines. I think there are a number of options in this area. You could combine two of the products into a third, you could separate the products, you could maintain their individuality, or you could take all three and move them to another platform. We’re evaluating all of the options. I think you’ll see us invest heavily in technology as we select our strategic options. 

Q I guess the question is, do you save through combining, or is it so costly that it’s better to maintain separate products? 

A That’s an important question. Certainly an end result in all of this should be some cost savings for us. But the focus is not cost reduction, per se; the focus first and foremost is serving our customers and growing the business. A side benefit will certainly be enhanced profitability for the business. 

Q The big question in everyone’s mind when Thomson purchased Dialog ... was how it would take advantage of potential synergies within the Thomson organization and integrate various products and services. One of these is obviously the connection with West. West users have had access to Dialog content for some time. Do you plan to make West’s legal content available to Dialog users in the near future? 

A The broader question really involves the Thomson plans and strategies regarding Dialog. As all of our customers know, Dialog already has a fair amount ofThomson content, which was one of the reasons that Thomson was interested in Dialog. There’s also a fair amount of Thomson content that’s not on Dialog—whether it’s West, or content from Thomson Financial, or another unit. Again, it’s an evolutionary process. Over time we will continue to enhance Dialog by adding content that’s strategic for the markets we are in. We will increasingly leverage Thomson’s assets. 

At the same time, Dialog is a distributor for a lot of other content. We have contracts with information providers all around the world. It’s important for Dialog to maintain its independence and be a fair distribution channel, not only for Thomson, but also for the other providers with whom we have partnerships. So, there’s a balance we’ll want to maintain, particularly in markets that are strategic for us. 

Q What I’ve been hearing from searchers is they want more full-text resources. Historically, Dialog has been heavy on abstracting-and-indexing databases, so people are really looking for you to add full text. Where that can come easily from other Thomson units, you could do it quickly. 

A I think that’s true. Customers have talked to me about that. They want more links to primary information, which we have developed in a number of our products and will continue to work on. We’ll continue to focus on adding full text. In addition, we’ll focus on greatly enhancing our content in some of the regional areas that we have operations in, such as the Asia-Pacific region, and in some of the European countries, and even in countries in North America, such as Canada, where we don’t have as much content as we’d like. 

Q What about doing more with Web linkages—adding URLs to files? Dialog seems to lag a bit behind some of the other services in being "Webified." What plans might you have for that? 

A Well, I’d say we’ve done a pretty good job of being "intranet-ified." A lot of our customers, particularly the large ones, have been very interested in having us create leading-edge ways to leverage their intranets. We’ve done that with a number of products that cut across all three of our lines. When it comes to leveraging Web development tools and being integrated into a Web environment, I think we’ve done a pretty good job. 

There are a number of issues when it comes to Web linking. The first is your own technology and how you cause the links to occur. The second issue is the relationship you have with the content provider, and how the link is going to be driven. Another issue is how you get there. In order to link to a specific journal our system has to be able to search against that journal and locate the journal in someone else’s file structure. With DataStar we’ve done a pretty good job in this area. With Dialog we have some improvements that we’ll be announcing probably in the third or fourth quarter of this year. We’re working to do it in such a way that we have strong relationships with the information providers, rather than just directing a link to a Web site. 

Q You mentioned pricing earlier, and the $75 fee that turned off some smaller customers. But, pricing was very obviously lacking in your recent announcements. Tell us what is happening in this area, especially with the issue of DialUnits. 

A I’ve talked to hundreds of customers since I’ve been at Dialog, and some customers bring up pricing as the first thing, while others never bring it up.And, the question I’m asked in almost every interview is "What are you going to do about pricing?" 

Q Well, Dialog pricing is a contentious and sore point with a lot of folks. 

A I’ve spent more of my time on pricing since I’ve been at Dialog than I have on any other topic. In an online environment, there aren’t many things that you control that define not only your brand but your product and how you deliver it to customers, and pricing is one of those. It’s a topic that’s important to us and also one that’s highly complex. 

Our first focus is in modifying and evolvingour current pricing structure. That includes not only the way we sell and market and price our products, but also the structures of that pricing, which include DialUnits, Types, Alerts, and others. We will be making some announcements later this quarter on pricing in general as well as the DialUnits issue. I will point out that DialUnits on average represent about 25 percent of a customer’s total bill. Customers actually pay us more for Types, Alerts, and other components than they do for DialUnits. That doesn’t diminish its importance, but it was an interesting piece of data for me to understand. 

On the second broader issue of what we will do with pricing for the future, we are looking at adding different pricing models. Certainly there are a number of pricing models that are accepted in the industry today that are not currently used at Dialog. You will see us adding flexibility and simplicity. We hope to make it easier to do business with us. 

Q Yes, people like choices to fit their needs. There’s a very wide range of potential users and they need pricing options to suit their setting. 

A On the DialUnits issue, we’ve identified three areas of concern. Actually, a fourth that I can’t do anything about washow it was implemented, which people didn’t like. One of the big three that people would like to see is choice. When DialUnits was launched, there was no other choice. Lack of choice causes anyone stress.Look for further word about this in the next[month or so], possibly at SLA [the Special Libraries Association Annual Conference this month]. We’ll be addressing all of these this year. 

Q You’ve talked about your strategies for 2001, laid out in this recent series of announcements. What do you see for Dialog’s future in the next 2 to 5 years? 

A Dialog has historically been an aggregator of content. There are other competitors in this space, and the calling cards for all of us are the breadth and depth of our content, how easily you can find information, with what type of precision you can find it, and what your system performance is like. Secondly, Dialog has occupied a leading position in a number of market segments, such as pharmaceuticals, investment banks, consulting firms, chemicals, advertising and media, and in legal services. Strategically, we would look to enhance our position in both those areas as we go forward. 

On the first point, that means adding more content, and offering additional ways to embed ourselves into a customer’s intranet or into their work flow. On the later point, I think you’ll find us focusing much more clearly in a smaller number of specific categories and working very hard to ensure that our products, features, and services, and the content array, really are in a leading position as we go forward. Certainly there will be a lot more focus on market segments than you have seen from Dialog in the past. 

[For more about Dialog, see the NewsBreak on page 16.] 

Paula J. Hane, co-editor with Barbara Quint for NewsBreaks, is contributing editor of Information Today, a former reference librarian, and a longtime online searcher. Her e-mail address is phane@

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