For all of the corporate drama that this move has generated, it's easy to forget that Smith's move to float more stock to reduce debt and to fund Reed Elsevier for more aggressive organic growth was a very sound move, even if it is one that displeases investors in the short term. The real question is whether Engstrom will be up to the challenge of using that capital effectively in a struggling economy. Certainly Engstrom's Elsevier unit is the most effectively positioned business unit in the Reed Elsevier empire today, with deep and widely successful enterprise information products and a growing folio of academic and scientific publications. Yet as relatively strong as Elsevier may be, growth will be a major challenge for Reed Elsevier, even if the economy is laid aside as a contributing factor.

The key problem that Engstrom faces is that few of the tricks that have worked for Reed Elsevier in the past are likely to lead to growth in the future. B2B magazine publishers over-romanticized the likelihood of revenues from traditional channels in the face of massive changes in online information delivery and were therefore ill-prepared to adjust to cutbacks in events attendance and slimmer online ad revenues. At the same time growth by title acquisition, licensing and data integration was making for a relatively rosy top line for Elsevier and LexisNexis but failed to leave enough room in budgets after debt and development costs to fund new product development. Fairly aggressive staff and operations streamlining at LexisNexis have improved the outlook for their business information operations somewhat, but the overall forecast for both LexisNexis and Elsevier highlights modestly incremental product development.

On the surface the smart approach would seem to be to "Glocer-ize" operations at Reed Elsevier as rapidly as possible. Thomson Reuters CEO Tom Glocer moved rapidly in recent years to pare away redundancies and legacy products with limited upside and to focus operations on enhanced integration of enterprise content services across their holdings. Unfortunately there are far fewer synergies available between LexisNexis and Elsevier than those found in Thomson Reuters holdings, with the cultures of the two divisions still remaining miles apart, both literally and figuratively. With ever-broadening competition for the core content licensing services of LexisNexis, including more aggressive development of Dow Jones' enterprise information holdings, Reed Elsevier looks increasingly like a company with one fairly stable boat and three heavy anchors failing to find a bottom.

While speculation remains in the air about a possible move to merge Wolters Kluwer operations in to Reed Elsevier, the more probable short-term solution would seem to lie in disposing of some or all of LexisNexis as promptly as possible while its asking price is still worthy. One possible solution would be to spin off LexisNexis operations to Thomson Reuters or Dow Jones to bolster their competitive positions in legal and business information. Thomson Reuters would be a better strategic fit overall for a spinoff, especially if Thomson Reuters could flip back some or all of its scientific holdings to Reed Elsevier, but regulatory concerns about merging LexisNexis into Thomson West would probably make a wholesale spinoff to Thomson Reuters doubtful. A more probable resolution to overcome regulatory hurdles might lie in offering LexisNexis legal assets to Dow Jones and its news licensing assets to Thomson Reuters, which has lacked archives depth since returning its interest in Factiva to Dow Jones.

Whatever the specific solution may be, Reed Elsevier needs cash to focus on building up its scientific and medical assets for growth as rapidly as possible. Cheap financing as a means to grow stables of titles is off the menu for a while, thankfully, so Smith's forecast for organic growth requires an acceptance that it will have to come by focusing far more aggressively on its Elsevier division. Elsevier is not without its own challenges - scientific publishing faces strong pushback from corporate and academic libraries that find it increasingly hard to afford the full range of journals that most publishers offer - but both scientific research and applied sciences are markets still crying out for productivity gains that would warrant increased product investments. By contrast, productivity in legal markets are moving away from many of LexisNexis' core database strengths, which would benefit from more integration with other platforms.

There's always the possibility that Engstrom may decide to go for short-term gains and shuffle the Reed Elsevier portfolio just enough to tweak out a year or two of decent earnings. Here's hoping that he finds the courage to make some very tough decisions as to what is likely to provide the best returns for Reed Elsevier investors in both the short run and the long run. Moving on a sale of LexisNexis, by far the most attractive disposable asset available from Reed Elsevier, will enable them to take advantage of its value while it still has some attractiveness in the enterprise information marketplace. Without further integration of their information with financial market information and successful media operations, LexisNexis is not likely to contribute significantly to Reed Elsevier growth for some time to come. We'll see how Engstrom decides to cut his losses, but here's hoping that his moves help to strengthen both Reed Elsevier and enterprise information markets overall.

Fast-forward to today, an era in which cloud computing is beginning to absorb both spreadsheet software and much of the content that can be consumed by software. It should come as no surprise then, that Google's recently launched Google Apps Script capabilities are providing publishing abilities that connect Google Apps spreadsheets to the Web in much the same way that investment banks were using them for business processes many years ago. You can now use script programming in Google's spreadsheets to trigger well-formatted emails to contacts, or to feed Web services - say, Salesforce.com, to pick one possible example. More to the point, though, some of the pre-defined scripts include formulas for converting local currencies into foreign currencies and business logic. Hmm, this is not just for casual marketing campaigns, is it.

It would be a far, far jump to say that Google Apps Script is in any sort of position to take on the sophisticated trading environments of investment banks, and, to be truthful, that's probably just as well. But it does point out how easy it has become to use the Web to be a self-programming publishing environment that can support many core business functions with event-driven automated information feeds. As more and more business logic works its way into cloud-driven programming environments, we can expect that both enterprises and enterprise publishers will be adopting these environments as cost-effective ways to deliver more valuable workflow services. Foreign currency trading via Google? Well, those early spreadsheets looked pretty crude at first, also. Watch this space carefully, enterprise publishers, there's more to come.

As with terrorist networks, many publishers and technology companies are dealing with rapidly shifting client behaviors, with lots of asymmetrical behavior that's difficult to analyze using tradional research methods. In traditional research, one formulates a hypothesis to test using quantitative or qualitative research techniques. In quantative studies, for example, someone interviews subjects and then filters down the results into a cohesive picture. In quantitative research, a questionnaire asks specific questions that requires people to respond to specific possible responses. These are both good techniques if you want to filter out a lot of possible answers that may not be your focus. But as good as that can be, many of the opportunities and threats that our clients face lie beyond this type of pre-determined focus.

An analogy as to why this is important was used in our client presentation today. We asked the people in the room to look at a short video of six people passing basketballs to one another, three wearing white shirts and three wearing black shirts, and to count the number of times that the people with white shirts passed the ball to one another. There was some disagreement on how many times the white shirted people passed the ball, but surprisingly several people missed another key input - a person in a black gorilla suit walked in and out of the scene during the passing. In other words, our ability to filter and to concentrate on specific goal not only may not give us exact anwers but may also ignore or focus on interesting phenomena that could be potentially important or a actually just a distraction.

Narrative research addresses this key gap in human perceptions in interpreting information about markets by enabling people to tell and to code unbiased stories about how they use or make decisions relating to products and services and then have them passed through software that relates their responses to key themes. When patterns emerge from this process, research sponsors can then refer to the original, unbiased stories and find new ways to analyze them. Instead of being "locked in" to specific biases or ideas that formed the information, you can refer back to the original unbiased stories and find new ways to interpret them individually or in aggregate. When you get enough stories to draw statistically significant conclusions, the result is an extremely powerful database that can answer different questions again and again over time on a very cost-effective basis. If you add more stories over time to that database, the results can be even more powerful, as you can begin to track changes in perceptions that you would not have been able to detect if you had had to form a specific idea ahead of time for testing via traditional research.

The net result for "New Rules" subscribers will be a rich, reusable resource of hundreds of stories from executives and implementers in enterprises telling how they use and make decisions on obtaining information services that they use to perform their jobs. In today's volatile economy, being able to hear unbiased stories from these complex and shifting decision makers and to analyze them quickly and effectively can be a critical factor in responding to the many changes in organizations that are compelling new and accelerated approaches to buying and implementing enterprise information services. Combined with the on-site workshops what we will be conducting for the core research subscribers I expect that "New Rules" will be the core element of many company's strategy planning efforts this year. I encourage you to investigate our prospectus and to see if you're ready to take advantage of this ground-breaking approach to market research that can power the marketing of your information products and services.