An interesting post on the blog The Life Of Books…
Author Richard Leiter director of the law library and professor of law at the University of Nebraska College of Law writes:
Lexis and West are Loosing Money? Oh My!
Weird. I just looked up Reed Elsevier’s and Thomson Reuters’ stock quotes for the recent past. In the case of Thomson, Yahoo! Finance’s charts only go back a couple of years, and in the case of Reed Elsivier they go back much further. If stock is any indication of anything at all, it’s the company’s profitability. And over the long haul, both companies are not doing well at all. The charts show a general decline. In the case of Reed Elsevier, it’s about at the same place it was ten or fifteen years ago. Surprising? I think so. How in the world can companies with such great, vital products be loosing money?
Lack of foresight. They failed to create the next generation of information product when they had the means. They’ve stayed loyal to what they know: sell what you’ve got, and keep it that way! Instead of innovating and using the tools at their disposal and distributing their product with the greatest of ease, they have priced themselves and their products out of existence.
As Carl Malmud and others advocate for thorough and free distribution of all public information, and as technology and technologists rise to meet the challenge with elegance and facility, the Big Two (three, if you count Volters Kluwer) are marketing themselves out of existence despite a veritable intellectual gold mine in hand, the main things that make their products special: secondary titles, digests and indexes and compilations of all sorts
Full article http://thelifeofbooks.blogspot.com/2009/03/lexis-and-west-are-loosing-money-oh-my.html
We find this a fascinating analysis because both companies have been stressing how they have moved from print to digital and from content to workflow management products and have been reporting healthy operating profits as long as we can remember.
Leiter worries that without Lexis & West the dissemination of legal information will be curtailed and thus our civilisation comes to a grinding halt because we can no longer operate legal systems.
To be honest we do find this rather alarmist and aren’t particularly worried as there are plenty of others who know the profits that can be made from legal information and will happily step into the Lexis & West shoes. As yet Google hasn’t made any announcement on what they intend to do in the world of legal content.. we can’t believe that they don’t have plans. Bloomberg are developing products and we wouldn’t be surprised if News had something up their sleeve in the next 18 months.
What does concern us is if Leiter’s analysis is correct and Lexis & West haven’t been making money … how have they been creating profits quarter in quarter out for the past five years and more. Are we going to find out that it’s all been built on acquisitions and creative cash flow accounting.
