Vendors strive to pull through
Jinfo Blog

8th August 2009

By Tim Buckley Owen

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Vendors are putting a brave face on things as a crop of interim results over the last couple of weeks indicates. Tough times continue for information companies – but where does this leave their corporate information manager customers, struggling with their own cost issues and anxious to strike the best deal they can? Thomson Reuters has reported a 2% increase in revenues and 11% in underlying operating profit, citing the recurring subscription basis on which it principally sells its information as one factor underpinning its resilience in ‘difficult global economic conditions’. It’s also benefiting from savings resulting from the integration with Reuters, with more to come over the next couple of years (http://digbig.com/5badqt). Reed Elsevier reports revenues up 3% and adjusted operating profits up 5%, and highlights LexisNexis’s acquisition of ChoicePoint as driving a ‘significant’ increase in its risk business. But it also acknowledges that acquiring ChoicePoint and terminating the sale of Reed Business Information (see http://www.vivavip.com/go/e22264 for background on this) have resulted in its carrying ‘more debt than is prudent’, and it’s raising new equity to address its ‘stretched credit metrics’ (http://digbig.com/5badqw). Informa, which owns Lloyd’s List and Datamonitor, has had to take drastic action to contain costs and reduce its debt (see http://www.vivavip.com/go/e20022 and http://www.vivavip.com/go/e21777 for background). Reporting revenue growth of 1.4% and adjusted operating profit up 4.6%, it says that its debt concerns have now been ‘alleviated’ (http://digbig.com/5badqx). Meanwhile newcomer and rank outsider Jigsaw says that its revenue has continued to double year-over-year for the fourth year in a row and that it has achieved profitability in the last two quarters (reported at http://digbig.com/5badqy). As a user-driven business contact database, it only provides a tiny fraction of what the other three established players do – but it claims a ‘disruptive business model’ which could conceivably spread to other forms of business information. Despite tough times for suppliers, information managers should expect the horse trading to be as tough as ever, LiveWire suggested when Thomson Reuters and Reed Elsevier announced their 2008 year-end results last February (http://www.vivavip.com/go/e16562) – and the major players’ continuing ability to find ways through their difficulties suggest that that’s still the case. So can Outsell’s recently published Vendor Portfolio Management Toolkit (purchase details at http://digbig.com/5badra) offer vendors’ beleaguered customers any respite? Apply tenets of investment portfolio management to the operation of your information services, to maximize return while managing risk, is the advice offered by the Toolkit’s creators Joanne Lustig and Leigh Watson Healy. Let suppliers know you’re going to use it and share with them the measures against which they’ll be compared to their competitors. Confrontational tactics? Or win-win?

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