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Infonautics Provides E-commerce Archive Services for Publishers
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Posted On February 22, 1999
Infonautics Inc. is probably best known for its online service products that aggregate content. Its successful reference product, Electric Library, is licensed by schools and libraries and also provides a Web subscription service for consumers. Its newest service, Company Sleuth, uncovers business information on the Web. However, it has also been providing custom content management and online archive services to major publishers and other content creators. Now, Infonautics has announced the launch of its "next-generation e-commerce online archive technology."

According to the company, the newly enhanced service allows publishers to sell their content online, utilizing highly flexible and scaleable commerce models without incurring a large internal investment in technology, customer service, and billing resources. Bryon Colby, director of media services for Infonautics, said, "Our new archive technology lowers the barrier to entry for publishers wishing to integrate e-commerce functionality on their Web site. Customer feedback guided the development of the service enhancements and resulted in an archive solution that meets the evolving needs of the online publishing marketplace."

According to Colby, the new technology gives publishers enhanced functionality, greater flexibility and customization capabilities, and a much shorter time to market due to developments in the product's content management and site implementation tools. It also provides dedicated customer service, billing, commerce, hosting, content management, and usage tracking. Billing options have been expanded to include bundled subscriptions, discount and promotional packages, and digital cash payment mechanisms. Improvements now allow publishers to receive and monitor nearly real-time Web-based reports on the content, traffic, and revenue status of their archive.

Colby called the service "a complete solution," but stressed that the outsourced package is modular and is custom-built to what the publisher wants. He also noted that it opens the door for publishers of all sizes to provide an archive with a revenue stream. "We're confident that this new offering will catch the attention of a lot of publishers who previously viewed Web services of this kind as beyond their means." The entry-level price for the service is "a couple of thousand dollars and up," and varies by the complexity of the project. There is an implementation fee to build the site and a monthly recurring fee for services.

The search engine used for the archive service is based on the ConQuest search engine, but Colby noted that they would incorporate a different engine if it was appropriate for a client's needs. He called the company "search-engine agnostic." ConQuest is the engine used by their Electric Library service.

Since 1996, Infonautics has provided archival services to some major clients, and the technological improvements will be gradually implemented for these existing customers. Its first archival sites were done for Business Week and Newsday. Other sites are for The Associated Press, Cox Interactive, The Dallas Morning News, The Denver Rocky Mountain News, The Providence Journal, and Rodale Press.

Three New Clients

Infonautics also announced the addition of three new publishing clients for the e-commerce archive service. The company said that Media General, Editor & Publisher magazine, and The Morning Call, a Times Mirror newspaper in Allentown, Pennsylvania, have selected Infonautics to build and manage their respective online archives.

"Media General is excited to be working with Infonautics as we bring our archives online," said Mike Steele, director of new media for Media General, Inc. "Media General will expand our e-commerce efforts by offering rich, historical resources to our online customers, and Infonautics provides us with the technology and know-how to make it happen."

Chris Phillips, publisher of Editor & Publisher, said, "The state-of-the-art archive system we implemented 2 years ago had become antiquated. Infonautics provided us with a system that re-establishes us as a leader in fulfilling the information and service needs of our customers. They worked with us to develop a cost structure that closely aligned with our online publishing operations, allowing us to take advantage of this revenue stream."

The Morning Call plans to transition its current free online archive into an e-commerce initiative. "There are numerous technology and end-user issues that we faced in making this transition," said Robin Miller, electronic projects manager for The Morning Call. "With the assistance of Infonautics, we will be creating a new and improved archive that will bring additional search capabilities and functionality to our current and future users."

Company Report

The day before the archive announcements, Infonautics reported its fourth quarter and year-end results for 1998. Fourth quarter revenue was $4.6 million, representing an 88 percent increase over the $2.5 million in last year's comparable period. For the full year ended December 31, 1998, Infonautics reported revenue of $14.9 million, 118 percent more than the $6.8 million generated during 1997.

In the press release, Van Morris, president and chief executive officer of Infonautics, stressed the continued growth in the customer base and the revenue from Electric Library. He also noted the positive reaction to Company Sleuth. "It has garnered close to 100,000 registered users since its launch last October, and while revenues are not yet significant, it is currently generating over 5 million page views per month. We intend to build on this momentum by launching a new product, Job Sleuth, and a premium version of Company Sleuth early in the second quarter." The premium version is the previously announced subscription-based product aimed at the corporate market.

Tucked unobtrusively within the press release was also the news that the company had shifted away from its knowledge management service, IntelliBank. A company spokesperson confirmed that IntelliBank was a content management product that had evolved from working with some of their clients. They had initially planned to compete in this software market but had recently reassessed how best to use their resources, and had decided it did not fit well with their core mission. While conceding that it was a tough competitive market with imprecise terminology, it was termed a "market strategy decision."

According to a company representative, the e-commerce archive service for publishers is seen as a good fit with Infonautics' other products. In all of their products the company works with publishers and information producers to both manage and distribute information. Press materials from Infonautics describe itself as "a leading Internet information company." A company representative stressed that, unlike so many newbie Internet companies, some offering only vaporware, Infonautics is an Internet company with real growth, tangible revenue, and solid distribution channels. However, despite the impressive revenue gains, and similar to so many Internet companies, Infonautics reported a net loss for 1998 of $17.4 million. The full press release with summary financial data can be found on the Infonautics Web site at http://www.infonautics.com/news/press/feb_16_1999.html.

The company had reported in January that it was "taking steps to reduce operating expenses, including the reduction of approximately 20 positions, or 10 percent of its workforce, the consolidation of development and technical operations, and the narrowing of its focus on certain markets." This followed a decision following a hearing by a Nasdaq panel that trading in Infonautics shares move off the Nasdaq National Market to the Nasdaq SmallCap Market. The hearing was prompted by Infonautics' non-compliance with Nasdaq's net tangible asset requirements for continued listing.

At that time, Infonautics also announced that it had retained Allen & Company Inc., a New York investment bank, "to act as its financial advisor to explore strategic alternatives for the Company." In the press release, Morris stated that "achieving an even higher degree of brand awareness and market penetration will require greater resources than we have at hand. We can think of no one better than Allen & Company to help match us with the right strategic partner or investor to take us to the next level."

When contacted, a company representative stated, "The company won't speculate on what the outcome of this engagement might be. Infonautics is open to various structures to achieve its goals, and is encouraging Allen & Company to think as creatively as they can in this regard." So, it looks like yet another information industry player is seeking a buyer with deep pockets and an Internet vision.

Infonautics Inc. was founded in 1992, and is based in Wayne, Pennsylvania. Information about the company's online archive service can be found at http://archives.infonautics.com. Other company sites are http://www.infonautics.com, http://www.elibrary.com, and http://www.companysleuth.com.


Paula J. Hane is a freelance writer and editor covering the library and information industries. She was formerly Information Today, Inc.’s news bureau chief and editor of NewsBreaks.


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