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Vol. 20 No. 8 — September 2003

FIZ Karlsruhe, the German provider of scientific and technical information and operator of the STN service, reported that sales in 2002 were up slightly, though its revenues dropped by 3.2 percent. The company also said that it had increased its number of employees, raised its "degree of self-financing" to 83.6 percent, added databases, and experienced considerable growth in full-text orders.

Reed Elsevier, which has cut costs to make up for lower U.S. sales in business publications and textbooks, reported that its net profit for the first 6 months of 2003 was $156 million, a figure unchanged from a year ago. The company said it expects to meet its 2003 targets, which include "above market revenue growth and double-digit adjusted earnings per share growth."

LexisNexis, Reed Elsevier's legal business unit, showed underlying revenue growth of 3 percent in the first half of 2003. This was driven by an increase in online subscriptions, particularly in the small-law-firm market. The company's report said: "LexisNexis is continuing to invest in new content and functionalities for its core products as well as in expanding its services through acquisitions.... The global online delivery platform is nearing completion of the first development phase, and rollout across individual markets will provide greater utility and significantly increased efficiency."

ONLINEeditor Marydee Ojala, reporting on the new delivery platform (https://www.infotoday.com/newsbreaks/nb030728-1.shtml), said, "The single technology platform, with its emphasis on multilingual taxonomies and behind-the-scenes linkages, indicates that the strategic direction of the company is toward increased globalization and standardization."

Paying for Content

Another Web site has gone behind a subscription wall as Business 2.0 recently decided to charge for its content. Readers who link to an article from a search engine are given an enticing peek at the first few paragraphs. Only paid subscribers (and AOL members) can read the entire text.

Editor Josh Quittner explained the reasoning in the August issue of Business 2.0: "[W]e've come to realize that our Web site is nearly as valuable to readers as our magazine. It made business sense to start charging for it too. Also, a large percentage of online-only readers told us that the reason they didn't subscribe to the magazine was that they could read it for free online. You don't need to be Bill Gates to figure out what that means."

It remains to be seen whether enough users feel the Business 2.0 content is worth paying for, but the price is certainly reasonable: Web access plus six issues of the monthly publication for $4.99. Other AOL Time Warner publications, such as Time and Fortune, have moved to various paid-access models as well.

While most consumers continue to resist paying for content, they seem to be willing to pay for certain high-quality material (such as the Wall Street Journal Online) and extra services. In mid-July, NYTimes.com announced that it had surpassed the 20,000-subscriber mark for its fee-based News Tracker e-mail notification. Launched in March 2002 as a free service, News Tracker grew to a base of nearly 500,000 subscribers in less than a year. In May, it evolved to a paid service with an annual fee of $19.95. The personalized resource includes a 90-day archive of articles that match a subscriber's topics—a nice bonus, since the site charges for access to articles more than 7 days old.

It's interesting to check out the publishers' various models. Some charge for archives and make current content available for free, while others do the reverse. Some charge for everything, while others only provide selected Web content for free. Most ask for some type of user registration, even for free access. And then there are the frustrated aggregators that watch publishers launch their own initiatives or make content deals with everyone.

KeepMedia

KeepMedia, Inc. unveiled a new premium content aggregator service aimed at the consumer market. KeepMedia delivers current and archived content from approximately 140 popular magazines and newspapers. The press release boldly called it a "digital content superstore," though with just 140 titles, this is a bit overstated.

For $4.95 a month, KeepMedia subscribers get unlimited access to all magazine and newspaper archives in the system. But content from the latest issues is only available to the individual magazine's subscribers or by purchasing an article separately. KeepMedia also sells print subscriptions for its publisher partners. The company stresses the service's personalization technology, which introduces consumers to articles of interest.

Magazines from Time, Inc. and Condé Nast Publications are not included, but titles like BusinessWeek, Psychology Today, and The Miami Herald are offered in addition to niche publications like The Corn and Soybean Digest. KeepMedia, Inc. was founded in January 2002 by chairman Louis Borders, who is also the founder of Borders Books and Webvan (the failed dot-com grocer), and CEO Doug Herrington, formerly Webvan's vice president of marketing.

Incidentally, the Author's Guild and the American Society of Journalists and Authors are investigating KeepMedia to determine if it has properly acquired the electronic rights to the freelance works it's making available to the public. In a joint statement (http://www.authorsguild.org/news/com_july_31.htm), the associations said that the investigations are "purely exploratory at this phase. We're not accusing KeepMedia of any wrongdoing."

"We believe in the paid content future," said Ken Doctor, vice president of content services at Knight Ridder Digital, which is including six of its newspapers in thelaunch. "We are now partnering with KeepMedia because we believe their user-oriented tools will resonate well with readers. As a publisher, we are always looking for innovative ways to reach new customers, and we believe KeepMedia is a good step in that process."

Esquire Online editor Brendan Vaughan, said, "We were so impressed by KeepMedia's personalization capabilities that we have partnered with them to power the digital archives on Esquire.com."

Analysts from content-industry research firm Outsell, Inc. were skeptical about the new KeepMedia venture. "Successful products focus on users' needs, not suppliers'. The very idea of taking the world's content and putting it in a box sounds shockingly pre-Web today. A solution that works for the consumer market will more likely look like Google News and be ad-supported, or it will look like the P2P music world with a micropayment scheme bolted onto it. If KeepMedia succeeds, it will defy almost 10 years of post-Web experience."

While this new consumer service might trigger recollections of Steven Brill's failed Contentville venture, that site was selling articles for $2.95 each and also producing content for sale. Northern Light didn't make it with consumer sales, and eLibrary,now owned by Alacritude, has struggled to retain subscribers. If consumers are smart,they'll use free tools like FindArticles.com (which offers Gale-supplied articles from more than 300 magazines and journals dating to 1998) and the free access provided by their libraries.

Patrick Spain, CEO of Alacritude and co-founder of Hoover's, feels that services need to do more than just aggregate content. He said: "The KeepMedia business model is flawed. I know because I bought a company, eLibrary, with the same business model, and we are changing it as quickly as we can. By most accounts, we are a success. We have some 40,000 subscribers who access an archiveof 17 million articles from consumer, business, and industry publications. If we weren't developing new products, we would be a nice, profitable little company with limited growth prospects. People—including us—who focus their long-term online business on selling a selection of content will fail. What people want is single point of access to all online content—whether free or paid—utilizing compelling tools to turn that content into useful and actionable answers for their personal or business needs."

News from Alacritude

Spain notes that Alacritude has been retooling its service from focusing only on content to helping folks conduct more effective online searches. As Spain likes to say, "It's about finding the answers, not owning the answers." However, he admits that the eLibrary archive is valuable, and the company will continue to increase its licensed content.

In early August, Alacritude quietly launched a new beta site called Researchville.com. If that name sounds familiar, it's because last year the company purchased the site from Bob Poulsen, president of Researchville Group. Researchville.com originally launched in February 2001. By late 2002, it had searched more than 700 engines, databases, and newspapers. It was hailed as a simple and useful site (especially for searching newspapers), though the multitude of open windows was annoying and cumbersome.

Alacritude is now working to improve Researchville.com's metasearch capabilities, add features, and develop the site into a first-class finding tool. Spain is anxious for searchers to give it a try and provide feedback during the beta process. At this point, the service lets users search more than 75 sites with a single interface, choosing among channels such as News, Discussion, and Multimedia. The metasearch capability integrates results and eliminates duplicates. By early this month, Spain said users will be able to create their own search channels by choosing any combination of Researchville sources. They will also be able to include sites that require registration and those to which they subscribe. The official launch is expected later this month.

Alacritude also recently announced that it has secured $1.2 million of equity financing in addition to the previously raised $3.1 million last December.

Search Engine News

Once again, Google has been dominating the search engine space, with the announcement of one new feature after another. Recently, it quietly debuted Google News Alerts (http://www.google.com/newsalerts). This service is in beta and is not yet linked to the main Google News page. Users can enter keywords for tracking and opt to receive e-mail results either immediately or once a day. There's a maximum of 50 alerts per e-mail address. The feature comes from Google Labs, which serves as a showcase for technology prototypes. Some other fun searches from Google Labs include Google Glossary, Voice Search, and Google Webquotes (http://labs.google.com).

Marydee Ojala reported on the News Alerts feature in a NewsBreak (https://www.infotoday.com/newsbreaks/nb030811-2.shtml), where she also discussed Google's introduction of synonym searching. Users can just preface a word with a tilde (~), which runs a search that includesan approximation of similar search terms. In addition to free-text synonym searching, the new feature works in fielded searches. At this time, it operates only on the Web search tab, not in Images or News, and only in English.

The bigger news from Google is the announcement that, through it, researchers will be able to locate technical papers published by the Institute of Electrical and Electronics Engineers (IEEE). Google is currently crawling the abstract records for all online IEEE technical documents and standards available through the IEEE Xplore online delivery platform. There are now nearly 1 million documents in the IEEE database. The project is expected to be completed this month.At that time, Google users will see the linked content in their search results.Abstracts will be available to everyone for free; full-text documents will be available to IEEE subscribers or through individual online purchase.

The prestigious IEEE publishes 120 technical journals, magazines, and transactions, and has developed more than 900 active industry standards. It claims to be the world's largest technical professional society with more than 380,000 members in approximately 150 countries. This new link from Google will open up these technical resources to a much broader audience that wouldn't have had access before.

One question, though, is whether users will appreciate retrieving the additional content. Rafat Ali, who writes the PaidContent.org blog, said: "Google has started adding scientific/medical journals.... It is highly annoying, if you ask me, as they pollute the news search results.... It would be better if they hive off this specialty news search into a separate tab/page."

Could this indicate the beginning of Google's connections with the more traditional database space? Google boldly saysits goal is to index "all of the world's information." If more publishers partner with Google to drive traffic and potential buyers to their sites, it could further increase tensions between publishers and traditional information aggregators.

Science searchers will still want to use Scirus, Elsevier's science search engine, powered by FAST. Scirus searches more than 150 million science-specific Web pages, including many access-controlled sites, and also indexes journals, technical reports, patents, and preprints. The obvious benefits are the inclusion of quality sites and invisible Web resources and the exclusion of non-relevant sites. Scirus has twice been voted Best Specialty Search Engine by Search Engine Watch.

Finally, Google not only dominates Web search, but it continues to push ahead in the enterprise search market. It recently announced some prestigious new corporate clients for its Google Search Appliance (GSA), a turnkey hardware/software solution. New GSA customers include Pfizer, Xerox, Hitachi Data Systems, Nextel Communications, Procter & Gamble, Discovery Communications, the U.S. Army, The San Diego Union-Tribune, and the city of San Diego.

Launched in early 2002, GSA is currently deployed by hundreds of institutions in a range of industries, including aerospace, technology, broadcasting, retail, government, and education. Information technologist Rich Wiggins wrote about GSA's launch in February 2002 (https://www.infotoday.com/newsbreaks/nb020218-2.htm) and again about its upgrades last fall (https://www.infotoday.com/newsbreaks/nb020930-3.htm).

By the way, Fast Search & Transfer (FAST), a developer of enterprise search and real-time alerting technologies, announced its financial results for the second quarter and half year that ended on June 30, 2003. Q2 revenues of $9.5 million contributed to half-year new business growth of 78 percent. At $2.4 million, FAST achieved positive adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) for the seventh consecutive quarter. These are impressive numbers during tough times.

The Pressure Builds

Remember that FAST sold off its Web search business and AlltheWeb.com site to Overture in order to focus on enterprise search. Then in July, Yahoo! announced it would purchase Overture in a deal worth $1.6 billion. The transaction is subject to regulatory and stockholder approval and is expected to be completed by the fourth quarter of this year. (See the NewsBreak at https://www.infotoday.com/newsbreaks/nb030721-1.shtml.)

Yahoo! is gearing up to stay in the race with Google and other competitors, such as Microsoft's MSN. Industry analysts have been speculating about the domino effect that Yahoo!'s acquisition could have on Web search. Most observers feel that more consolidation is inevitable, and some have started to examine the takeover targetsand possible combinations.Another factor could be that MSN Search is developing MSNBOT, a prototype Web crawler robot.

And just to make things more interesting, as this article went to press, CNET writer Stefanie Olsen reported on Kaltix, a new company that was formed by three members of Stanford's PageRank team (http://news.com.com/2100-1024_3-5061873.html). PageRank is a research group created to improve the mathematical algorithm developed by Google co-founder and Stanford alum Larry Page. (On July 12, Gary Price posted news about the company on his ResourceShelf blog.)

Olsen's article quotes an unnamed Kaltix representative who said, "Kaltix is a 'stealth mode' start-up ... (leveraging) research done at Stanford University as well as several new technologies developed at Kaltix to provide large-scale personalized and context-sensitive search." Personalization means better search results because of matching to user profiles, but it also raises questions of privacy and personal data collection.

At this point, the Kaltix site just says "Coming Soon." A search in the WhoIs database reveals links to a venture capital firm in Mountain View, Calif. Olsen also reports that the start-up is attracting notice from search engine veterans, including Jan Pederson, chief scientist at AltaVista. The fledgling company might prove to be an attractive purchase for one of the big guys.

I thought that was enough news for this month, until I read about Nutch, another interesting search engine development. Nutch is a "nascent effort to implement an open source Web search engine." Rather than using proprietary page ranking, the site claims Nutch "has nothing to hide and no motive to bias its results or its crawler in any way other than to try to give each user the best results possible."According to John Battelle's article in the August 2003 issue of Business 2.0, an impressive roster of Internet luminaries—including Mitch Kapor and Brewster Kahle—are lining up behind the development effort, and Nutch "could posean enormous threat" to Google and the other search engines. Stay tuned.

For the latest industry news, check https://www.infotoday.com every Monday morning. An easier option is to sign up for our free weekly e-mail newsletter, NewsLink, which provides abstracts and links to the stories we post.