Were we surprised that Dow Jones CEO Richard Zannino will be stepping aside for News International executive chairman Les Hinton, key exec for New Corp's business and mainstream news operations?

Nope.

Was it any small surprise that Gordon Crovitz, President of Dow Jones Consumer Media and the publisher of The Wall Street Journal, would be leaving along with Zannino?

Hardly.

With a changing of the guard at the top of News Corp expected and Murdoch itchy to start transforming his new property to compete with other quickly moving global news outlets it only makes sense for Richard and Gordon to move on ASAP. This is of course no reflection on their ability to guide one of the world's premium business content brands into a highly profitable stance in the business media marketplace. This duo has to be credited with managing to maintain both an institution and a highly profitable and growing audience through some of the most challenging times in publishing history. But the new boss in town rivals New York Yankees baseball "Boss" George Steinbrenner for his fixation on goals and results. Lip service to tradition, yes, but hitting your mark comes first.

The goal: build the most sophisticated and recognized global brand of business news that can be wrapped around leading executives' decision-making processes in whatever context matters most to them and to monetize it in whatever way hits the bottom line best. Pride in subscription online portals and "the value of real journalism" be damned, it's the first to crack this converging marketplace that wins the gold. And Murdoch is not alone. With Reuters teaming up with The New York Times' International Herald Tribune to deliver business news in IHT's global daily news outlet and Bloomberg, LP choosing a media investments specialist for its top spot the marketplace for business media and information is shaping up to be increasingly complex. Add on The New York Times' stellar traffic growth since dropping its subscription firewall
and it's anyone's game to build a new dominant position in business news and information services.

The odd leg out in this discussion so far, though, is Dow Jones Enterprise Media, AKA Factiva plus the remnants of Dow Jones' enterprise feeds business. The opportunity is for News Corp to enable a more aggressive melding of enterprise and media services as the differences between today's business media outlets and today's enterprise portals begin to narrow. No word yet as to whether Clare Hart is expected to move on, but with relatively little expertise within News Corp in managing subscription business information database services she may wind up being a well-positioned player - that is, if some of the industry's other merging interests don't tantalize her more than playing NewsCorp Survivor. With an established global base of clients Factiva is likely to become an important fulcrum as NewsCorp tries to leverage its way further into global business information circles.

There's a lot yet to unfold in this fascinating merger, but already we can see that promises of journalistic integrity in Murdoch's world view are not synonymous with the status quo for journalists in any sense of the word. In may ways this may turn out to be a great plus, as Dow Jones journalists get to play out their careers in an increasingly sophisticated global marketplace. In the meantime it's time for U.S. business journalists of all stripes to recognize that as much as they have been biting the hand that's fed them pretty well all these recent years this hand has been mightily slow in creating better long-term career options for them. Certainly not everyone will be happy with these impending changes at Dow Jones and some "old guard" insight is surely going to be lost along with this increased global nimbleness but there's no time to waste if NewsCorp is to make the most of the Dow Jones family of content brands. In this landscape the purity of outdated methods can be no match for the purity of mastering new ones.

Labels: Bloomberg, Business Information, business media, Dow Jones, New York Times, News Corp, Reuters, Thomson

IT Week offers an article by Tim Buckley Owen of Information World Review that is a bit of a hatchet job on LexisNexis, Thomson and other business information providers. Owen quotes anonymous sources who paint a picture of subscription database services providers defending pricey offerings against users more adept at finding their own sources online. The criticisms are not so different from what we at Shore have heard in our private research but it is interesting to see some of these in print for the world at large to consider.

Some of the key quotes include:

“Although the sector boasts a lot about listening to customers, this is largely not so,” says one independent business information consultant. “Customer consultation is often just going through the motions because it’s expected or it looks good.”

"Even the shortfalls in the content would not be so unpalatable if we were informed about them in advance, understood the rationale or had clearer information on what the content includes," a librarian at a leading law firm adds.

LexisNexis adds that it does face competitive pressures: "Content that was previously impossible to access without a premium subscription is now often available for free on the web. New open solutions have been developed and consumer expectations have risen dramatically."

While this is hardly stuff that should shock the typical business information company executive it's indicative of the frankness that many of their customers are expressing to them - and of their own recognition that the business information industry is changing rapidly. Where a few years ago some usability enhancements on a search interface and a few new subscription sources could be touted as major enhancements by subscription database providers today these same improvements ring rather hollow in the ears of enterprise customers learning how to leverage Web technologies to get smarter faster than ever before. It's not even a matter of the bloom being off the rose: the rose of business information services is in danger of being uprooted altogether by enterprises in search of competitive advantages.

This is not all bad news for business information providers. In many instances companies like LexisNexis and Thomson are already all over this trend and moving aggressively into software services that can help to enable productivity and revenue generation for their clients. But the greater truth revealed by this rantish article and our own research is that the efficiencies of relational databases are being overcome quickly by the dominance of I.T. cultures in business information companies built around inflexible relational database technologies and the equally inflexible product design and support that results from these technologies. The result is cultures ill adapted to shed antiquated product concepts and to work more flexibly in Web-centric environment to deliver the products that users really want to use in ways that they want to use them.

You can do all the user interviews, surveys and focus groups that you want but if you're applying those insights to an outdated platform your ability to leverage those insights is not going to pay back the dividends that they should. Business information providers will continue to leverage existing relational databases profitably for some time to come, but at some point in the not too distant future they're likely to face the same crises faced by information giants such as Reuters as they realized that their allegiance to profitable but outdated platforms meant costly catch-ups in both product design and corporate culture in order to survive. It's time for business information companies to embrace user-driven content aggregation and generation technologies and to start enabling productivity benefits that may have little to do with how existing platforms are configured. There are many interesting trends in business information that hold out promise that this is going to happen, but timing will be everything.

Labels: Business Information, LexisNexis, Thomson

paidContent.org notes the Dow Jones boardroom resignation of Dieter von Holtzbrinck in protest over the pending News Corp deal, but away from the acquisition soap opera are some interesting details culled from the recent Dow Jones earnings report. Though overall earnings are down notably online revenues are up 5 percent and paid subscribers to The Wall Street Journal Online grew 23.6%, buoyed in part by a USD 99 combo package for the print and online edition. These are good numbers at a time in which business news is challenged in all directions by new sources. Think of the WSJ as the world's largest country club, a point of social distinction that allows one to join an elite (kind of) group for very nominal greens' fees.

It's a model that social media plays will be leveraging more in search of high-value focused market segments, which begs to some degree when WSJ will be doing more to integrate community features into their platform. I have great respect for Gordon Crovitz and his business acumen, but the WSJ's shyness on social media is likely to leave additional "gated community" revenues to others in time. And perhaps time will be the factor - they aren't growing any more WSJs any time soon, as Rupert Murdoch knows very well, so Crovitz and others with deeply entrenched media brands seem content to let their content become contextualized elsewhere. A little imagination is in order here to consider how to build a new clubhouse at this online country club - for premium fees, of course.

Meanwhile over at Dow Jones Enterprise Media the Factiva buyout makes things look temporarily rosy on the unit's top line but Factiva's compartively thin profits dragged down the unit's operating margins to 23.2 percent. The Enterprise Media unit is another example of where Clare Hart does a magnificent job of talking about Web 2.0 but so far has not really touched its potential to change the fundamental profitability of a licensed content aggregation business. By contrast Thomson Financial's recent deal to incorporate executive background briefings and private company profiles from Generate is a key foray to use Web content to build premium content revenues via direct extensions to their core content sets. The New Aggregation that we talked about a few years ago, in which publishers and aggregators must embrace Web-generated content and contexts aggressively to generate better margins, is now being embraced by key business information providers very aggressively.

Hopefully the Factiva buyout will enable Dow Jones to infuse their Factiva investment with more capabilities incorporating Web content that will improve both margins and content quality - once News Corp acquisition formalities have settled down. In the meantime here's hoping that Dow Jones' model for online and enterprise success continues to broaden both coverage and online audience engagement.

Labels: Dow Jones, earnings, Factiva, financial information, Generate, Thomson

As Thomson prepares to subsume the assets of Reuters many eyes are on the impact to financial content markets from this historic merger. But with Reuters CEO Tom Glocer expected to take the overall helm at Thomson the more important impact might come from the lessons that Glocer is prepared to apply to Thomson's other divisions. With decades of experience in both real-time and media markets Glocer may have the opportunity to transform Thomson into a far more agile player in global markets for business information.

Click here to read the full News Analysis

Labels: Bloomberg, Deals Partnerships and Sales, News Analysis, Reuters, Thomson

The wires are ablaze with takeover rumors, the leading buzz being about an offer from Thomson to acquire Reuters. Reports put NewsCorp in the race as well, but this sounds like a tepid
"Plan B" as a backup to Murdoch's intents with Dow Jones. The matches in a Thomson-Reuters merger are fairly obvious - Thomson gets Reuters' low-latency content delivery and automated trading platforms for the investment bankers that they've been unable to woo in quantity as well as online ad revenues from Reuters' media offerings, Reuters gets fingers into the securities industry "buy side" and retail operations - but I wonder whether EC regulators are going to feel comfortable with such a dominant combination. On a global basis that would leave Thomson and Bloomberg as the only really viable content alternatives for supporting large-scale securities trading operations.

Then again, perhaps that's all we need these days: the content that's driving securities transactions increasingly comes from sources outside of traditional vendor databases, leaving enterprise-oriented content vendors to perfect data plumbing and desktop tools. In a rapidly consolidating global securities marketplace two may be the magic number for the years ahead. With plenty of cash on hand for just such a takeover Thomson is in an excellent position to tuck away a revitalized but still-fragile Reuters team.

Two may also turn out to be the magic number in online content as Microsoft and Yahoo reopen talks to figure out a better fit. The Wall Street Journal reports that the shelved discussions have been brushed off in light of Google's now-leading Web presence. Yet again, this may be a merger or alliance of necessity. It would cede that Yahoo has largely missed the boat on enterprise content while Microsoft has stumbled with consumer content, even as Google has forged highly profitable paths into both arenas.

As in the securities marketplace for Thomson and Reuters the potential for a Microsoft-Yahoo alignment is as much about global competition as it is with any U.S.-oriented concerns. Asian and European markets are tipping Google's way in comparison to Yahoo and Microsoft, a trend that may be accelerated by Google's office automation tools that would allow developing nations just starting to come online to avoid the dominance of Microsoft Office tools as a prerequisite for playing in the digital economy. It's not clear that a Yahoo-Microsoft merger would help either party in developing markets but it may be powerful enough to act as a brake of sorts on further Google dealmaking and advertising alliances in developed markets.

In both of these potential deals, as well as in the potential acquisition of Dow Jones by NewsCorp, is the looming presence of gigantism in publishing that seems somehow unable to counteract the emerging trend of micropublishing. Huge collections of copyrighted content and patented technologies don't seem to be able to make a dent in the explosion of content developed by and for peers who are able to collaborate effectively with relatively little help from media giants. If there's anything to be said for any of these potential deals to deal with micropublishing it would be to acknowledge that Yahoo has been good at attracting user content while Microsoft has an improving stable of collaboration tools. On the enterprise side Reuters has decades of experience in enabling market conversations and promises to do moreso with emerging social media technologies.

But in both of these instances it may very well be the case that the distraction of merger politics would decelerate rather than accelerate these crucial efforts, leaving these companies further behind in the race to capture value from social media. The time may be right for these potential super-mergers and the resulting balance sheets are likely to look pretty healthy at the end of the day, but gigantism may prove to be a very temporary stop-gap measure in efforts to counteract changes in publishing that seem to favor small and medium publishing efforts that grow organically from open source tools and Web-based communications standards. Which bring us back, as always, to Google, which is glad to sell people valuable contexts for monetizing all of this content in whatever medium is of interest to marketers. I'll avoid the usual dinosaur-versus-mammal metaphor and just say that in a rapidly changing publishing ecology we're better off chasing the mammoth of contextual content value than focusing on building city-states of traditional publications that rely on a vanishing economy based on the value of copyrighted content.

Labels: Deals Partnerships and Sales, Google, Microsoft, Reuters, Thomson, Yahoo