Database Marketplace 2001: Racing at Full Speed Content

This is the fifth annual Database Marketplace. This year we have expanded the scope, including profiles for 51 companies . Some 70 products are featured in our charts and graphs or in the narrative that analyzes the industry overall. All these companies see libraries as their major market, with academic, public, special, and school library markets ranked in that order overall. We would like to thank Emily Urban and Ed Poston, graduate students at the School of Information Sciences, UT-Knoxville, for their assistance.

If you're not a fan, a car race is a bunch of noisy, overly decorated vehicles running around in circles. From time to time, each car makes a pit stop for maintenance, only to zoom out again and join the circling throng. Occasionally, cars will crash into a wall or, more likely, into each other. At the end of all of this noise and smoke, one car gets the checkered flag and is awarded a trophy as the winner.

Why does the Database Marketplace 2001 remind us of car racing? Although auto racing garners more money and fans, its seemingly out-of-control style somewhat resembles the current state of the database marketplace.

Actually, there's method to the apparent madness of auto racing, based on teams, crews, and an industry that responds to fans' demands for bigger race tracks, faster cars, and more T-shirts and caps. Some drivers stay active for decades; others can withstand the competition and stress only briefly. The database world also must respond to demanding customers, in academic, public, school, and special libraries. In the database world, however, there is not necessarily an end and there does not have to be only one winner.

In both car racing and in the information industry, large multinational companies are major players. Though we don't yet wear the names of information companies like Thomson and Reed Elsevier on our T-shirts, their brands are on many of our products. In the last seven years, Thomson purchased Findlaw, Dialog, and Information Access Company, to add to holdings that already included Gale Group, ISI, and Westlaw. Reed Elsevier now owns Lexis-Nexis, Elsevier Science, Bowker, and Cahners Business Information (parent of LJ). Thomson and Reed Elsevier are waiting for federal approval of plans to purchase mutually agreed upon parts of the publisher Harcourt General.

The full impact of this dominance by a few hasn't set in. Neither Thomson nor Reed Elsevier has fully taken advantage of the range of content in its diverse holdings to offer fully integrated products. Lexis-Nexis doesn't include the full texts of the hundreds of Reed Elsevier science journals-it doesn't even link to ScienceDirect, Elsevier Science's growing online service.

Thomson's Westlaw offers a gateway to Dow Jones Interactive for news but no link to or integration with Dialog's rich content. Dialog and Gale were a natural marriage because so many Gale titles were already on Dialog, but the company hasn't added many more. It will, however, this year add Gannett newspapers to Dialog's full-text newspaper holdings.

Academic librarians in particular worry about the long-term impact of diminishing competition. When Reed Elsevier and Thomson each announced plans to purchase parts of Harcourt, the Association of Research Libraries (ARL) launched a campaign to stop the sale. ARL contacted university librarians and sent a letter to the Antitrust Division of the Department of Justice expressing concerns about the impending transaction. The sale would send Harcourt's scientific and textbook holdings, including Academic Press, to Reed Elsevier.

To keep a lead in this marketplace race, sometimes these big information conglomerates step back, reassess their strengths, and refocus on their closest relatives. This year, Reed Elsevier announced it will sell Bowker, Marquis Who's Who, and National Register Publishing to focus mostly on sci-tech and electronic distribution.

Smaller companies can benefit from staying within a narrower focus as well. ABC-CLIO sold ARTBibliographies Modern and ABC Pol Sci to Cambridge Scientific Abstracts to refocus on history databases-its key business. Encyclopedia Britannica's free version of its complete encyclopedia lasted just over a year; in March 2001 the company laid off almost a third of its work force to refocus on fee-based products.

Information companies that know their customers and create products in niche areas tend to do well. This doesn't mean they stand still; successful nonprofits like CAS and OCLC and for-profits like Wilson, Bell & Howell, and SilverPlatter continue to expand holdings and keep up-to-date with technology. They draw on past strengths as they build bigger bibliographic databases, forge full-text linking agreements, expand formats to include PDF and images, and offer a range of pricing options and products that appeal to their core library customers.

Just as independent drivers sometimes join larger teams to form alliances, smaller information companies not part of the huge corporations must turn to each other. Teamwork among competitors builds better products while allowing each to maintain its own identity.

Many examples illustrate the range of possible partnerships that cut across types of companies (for-profits and not-for-profits) and geographic borders. Gale Group is partnering with the Winston Churchill Archive and South Hampton University, Johns Hopkins's Project MUSE added nearly 20 participating publishers or third-party partners, IDEAL has over 15 partners, and ABC-CLIO will offer its books in partnership with both netLibrary and Versaware.

New types of products can emerge from good partnerships. Nature Publishing Group Reference, for example, partners with Scientific American, Grove's Dictionaries, Macmillan, and ingenta to create web-based scientific reference resources. Mergent's agreements with Dun & Bradstreet, Data Monitor, and Mergerstat will allow it to offer new business products in 2001.

One of the most ambitious partnerships, BioOne brings together OCLC, Amigos, ARL's SPARC, the American Institute of Biological Sciences, Big 12 Plus Libraries Consortium, and primary publishers to distribute reasonably priced scholarly biosciences journals. This will not be the last such partnership, as all types of organizations are working together to lower the prices and increase access to scholarly journals. PubMed Central, PubScience, and HighWire are similar examples.

Just as auto races are regularly held around the world, the information industry is a global enterprise, with increasing cooperation among companies from various places. In April 2001, Wolters Kluwer announced it would acquire SilverPlatter and combine it with Ovid Technologies.

Often mergers include a focus on multiple languages. Dow Jones Interactive and Reuters Business Briefing merged last year to form Factiva, a global company that is expanding its offices and markets in Asia, Australia, and Eastern Europe. Customer service is available in several languages. A Spanish SIRS Mandarin web site will be added in 2001, following the 2000 addition of a German version.

SilverPlatter's new version of its WebSPIRS software offers French, German, and Spanish interfaces. CSA introduced versions of its interface in French, Spanish, Korean, and Japanese. EBSCO has purchased translation software to allow users to request real-time translation of articles from English to French, German, Spanish, Portuguese, or Italian.

Today's race cars depend on high-tech design and a highly trained crew. Similarly, information companies are investing more than ever in hardware, software, design, and customer technical support. They are moving away from a single platform or aggregator model to a complex model of multiple platforms, multiple distribution channels, and multiple interfaces or products to meet a range of customer demands. Wilson has just initiated 24/7 technical support through telephone and the Internet.

The web is clearly the predominant platform, with HTML the most popular delivery format. Older companies are focusing their development efforts on web versions, and newer companies like Paratext, netLibrary, and Northern Light wouldn't be in the business without the web.

Among the old standards in the special library market, the databases on Questel and Orbit can now be searched together on the web with QWEB. Lexis-Nexis unveiled its new web-based nexis.com system, which replaces Lexis-Nexis Universe. Factiva has worked for more than a year completely redesigning Dow Jones Interactive and Reuters Business Briefing to create a single integrated web system. Factiva.com will be shown for the first time at the Special Libraries Association meeting this summer.

QWEB, nexis.com, and factiva.com are destination products-the companies maintain the systems on their servers and control updates, hardware maintenance, and software fixes. It's difficult enough to retool for the Internet and constantly add new features; technical maintenance for information companies is now further complicated by the demand for products that can be integrated into intranets. All the major aggregators that market primarily to special libraries (e.g., Dialog, Factiva, Northern Light, Lexis-Nexis, and Westlaw) must provide versions of their products for company intranets that allow integration of internal company information with this external information. Several also offer customized development of intranets.

Portals, which are gateways that provide access to both subject-focused proprietary content and relevant web sites, are being developed by many companies. Some of these portals are quite subject-specific and might better be called 'vortals' or 'vertical portals.' One of the first was Engineering Information Village, providing a range of content to engineers. CAB International is partnering with ingenta to develop several portals for specialized communities. Portals such as animalscience.com, nutritiongate.com, and lei-suretourism.com mix bibliographic information, full-text journals, and web links.

Gale Group continues to add topics to its Resource Center portals, first introduced last year. Both Facts On File and Paratext introduced web-based reference service portals. Dialog introduced a portal for information professionals and another for business professionals.

Drivers, under pressure from fans to go faster, 'soup-up' their engines and set new records. Information companies must respond to customer desires for more content, bigger databases, and multitype collections. Linking to full text will soon be the rule rather than the exception, as the CrossRef standard has enabled widespread linking. Over half of our respondents either currently offer links from bibliographic to full text or are considering adding links. For example, ScienceDirect provides links not only to Elsevier journals but to journals from many publishers; CAS has added links to all of its databases; CSA provides links to full text, interlibrary loan forms, OPACs, and document delivery services.

Customers clearly want quick and easy access to full texts-but this is not without problems. Prices and subscription terms still vary widely, and users may be stopped by a request for payment when they click on a link. As they renegotiate licensing agreements with more savvy primary publishers, several aggregators are concerned about continued full-text availability. Few mentioned preservation as a concern for the future.

Access to periodical articles is not the only way companies can enhance access to information. Bell & Howell, Gale, and Wilson are among those putting together large collections of information around themes-genealogy, maps, and historical newspaper collections for Bell & Howell, Churchill Papers for Gale, and biographies for Wilson. These megadatabases mix document types to create huge multimedia products.

True fans not only want more excitement, they want lower ticket prices. Libraries can find such lower prices by participating in a consortium.

Consortial pricing can be advantageous for both libraries and database companies. Companies like Lexis-Nexis, Factiva, and Elsevier Science find themselves in markets (such as small colleges and schools) that they could never reach before. Billing is simplified for both parties. One downside for libraries is that they relinquish some collection development control and may find themselves with overlapping content in multiple products. Still, the deep discounts outweigh the disadvantages for most libraries.

Beyond the web, there aren't many freebies in the content industry. This year Bowker will launch e-booksinprint.com, a free site that identifies e-books. Northern Light, PubMedCentral, and PubScience all offer bibliographic searching for free. On the other hand, Dow Jones and Excite recently ended their free work.com site and Britannica.com has cut some free content and likely will cut more. As online advertising revenues dip, expect more such contractions.

The best examples of bargains in high-quality information come from an unlikely source-scholarly journals. HighWire Press provides over one-fifth of its 239 journals for free. PubMed Central provides free access to biomedical journals linked to the free Medline indexing. BioOne will bring low-priced biosciences journals to research libraries. Project MUSE offers unlimited simultaneous use for a subscribing library. Responding to customer requests (and growing competition), ScienceDirect will allow customers to purchase subsets of Elsevier journals, rather than having to buy all or nothing.

If you have cable or satellite TV and tune into the specialized sports stations late at night or on a Sunday between sports seasons, you are likely to find races among just about anything with wheels: trucks, dune buggies, even dirt bikes. This somewhat parallels the many small or out-of-the-mainstream companies we've added to the database marketplace this year. There is one big difference: most information motorcycles hope to become full-sized race cars.

Several smaller companies focus on humanities resources and historical materials. Alexander Street Press, founded less than a year ago by former Chadwyck-Healey executives, provides primary research materials for the humanities and social sciences. Paratext offers a variety of historical indexes and humanities full texts. Fully indexed page images of old issues of Harper's Weekly are provided by HarpWeek.

netLibrary might be better compared to a monster truck than a motorcycle. Two years ago most libraries didn't even know they wanted electronic books-now netLibrary books are found in many types and sizes of libraries.

Although there haven't been many notable failures in the database marketplace this year, a few aggregators or joint ventures appear to be headed for a crash. InfoQuest's parent company, RoweCom, continues to see its stock prices fall amidst signs of trouble, including customer complaints about performance and defecting salespeople. No one knows how the recent layoffs will ultimately affect the core business of Encyclopedia Britannica.

The dot-com downward spiral is beginning to affect more respected companies, such as the information architecture firm Argus Associates, which folded in March 2001. Although this may be the fate of some companies in the database marketplace, most profiled here should remain for the long haul. These companies know who they are, know their customers, and are tuning up to keep current with new technologies and a new way of running the information business race.

Company Profiles