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LexisNexis Secures Content Deal with Factiva for the Legal Market
by
Posted On October 18, 2004
In the world of co-opetition (cooperation and competition),* changing partners can be a complex and high-stakes deal. The information industry has had some interesting content and technology partnerships, with deals usually cut for distribution to specific market segments. For example, customers of Westlaw have had optional access to Thomson Dialog and Factiva content. But, relationships can end, and, in fact, the deal between Thomson West and Factiva, in effect for the last 10 years, ends Feb. 28, 2005. Factiva has already chosen its next dance partner for the legal market—the remaining logical distribution option open to it—and just signed an exclusive agreement with competitor LexisNexis. Under terms of the 5-year deal, beginning Mar. 1, 2005, LexisNexis will provide Factiva content on an exclusive basis to legal market customers—law firms worldwide, as well as courts, state/provincial and local governments, and law, tax, and accounting schools in the U.S. and Canada. The agreement will bring the full text of The Wall Street Journal and other unique Factiva content to LexisNexis customers for the first time.

"Factiva and LexisNexis clearly complement each other in the legal market," said Clare Hart, president and CEO of Factiva. "The availability of thousands of authoritative sources, including The Wall Street Journal and Dow Jones and Reuters newswires, combined with authoritative legal, news, business, and public records content from LexisNexis, will provide legal professionals with the most comprehensive collection of business news and information available anywhere. By working with Factiva, LexisNexis will give its legal customers a competitive edge."

In effect, Factiva customers in the legal market will become LexisNexis customers—LexisNexis will handle all marketing and support in this market segment. While Thomson West had represented Factiva in selling to corporate legal departments, Hart said this is not part of the deal with LexisNexis. Factiva will retain this segment. And, individuals who want to subscribe can still do so through Factiva.com or through the task pane in Microsoft Office 2003. The deal with LexisNexis is also just a one-way channel distribution arrangement—Factiva will not gain any LexisNexis content.

Content from the Factiva Publications Library will be directly loaded onto the LexisNexis platform, and customers will use the LexisNexis interface to search across the integrated content. According to a recent study done by LexisNexis, Factiva has about 3,400 unique sources—that is, that are not duplicated by LexisNexis content. A Factiva representative said the company has not done an analysis but that this number sounds about right.

Steve Edwards, director of corporate communications for LexisNexis, said the company was quite excited about the additional international sources and highly sought content, which, in addition to the WSJ and DJ newswires, includes Moody's, Reuters, The Globe & Mail, and the Australian Fairfax publications. (Fairfax recently signed an exclusive deal with Factiva for full-text content from its newspapers and business and finance journal titles. See the NewsBreak by Marydee Ojala at http://newsbreaks.infotoday.com/nbreader.asp?ArticleID=16395.) LexisNexis has only had abstracts for the WSJ until now. Edward said the companies still have a lot of details to work out, including whether all the unique Factiva sources will be available on March 1, or whether sources would be added on a phased basis. In addition, LexisNexis would be examining some of Factiva's feature and function differences.

LexisNexis says it has around 20,000 global sources, before the Factiva additions. Factiva counts around 9,000 sources. These numbers are subject to some variation depending on how sources are tallied. (Note: Pam Foster has some discussion of this in her comparison of the two services for the September 2004 issue of VIP. The October issue will compare Dialog NewsRoom to the other two. VIP is a subscription publication; see http://www.vivavip.com.)

So, what happens to customers who accessed The Wall Street Journal and other Factiva content through Westlaw? According to a Factiva representative, customers who want to continue must switch over to access it on LexisNexis as of March 1, 2005. However, legal customers who have been accessing Factiva directly will have a 12-month grace period beginning March 1 to make the transition to LexisNexis. Basically, customers of West lose in this deal—at least for these key sources.

The evening before the Factiva-LexisNexis agreement was announced, Thomson West made its own announcement of alliances and content and said that in the coming months it would "unveil transformational business intelligence services." The company said it would be adding business analysis, current awareness, and financial news from The New York Times and from Thomson Financial News, which includes an exclusive partnership with MarketWatch, Inc. By March, Westlaw will also offer Dialog NewsRoom content from its sister Thomson company, Dialog. A representative from West stated: "Yes, we're losing the Dow Jones newswires and The Wall Street Journal—but our customers are going to have access to something comparable."

I suspect the West customers might have a quibble with this. Loss of access to The Wall Street Journal and DJ newswires is not trivial. Analysts from Outsell (http://www.outsellinc.com) recalled the removal a few years ago of LexisNexis' Shepard's Citation Service from West and commented: "This time around it will be more difficult for West to replace a source that has a much stronger brand and is impossible to duplicate—but West does have the advantage of moving forward with a news partner that comes from within the Thomson fold."

One thing's for sure: Neither LexisNexis, a Reed Elsevier company, nor Thomson West, part of the giant Thomson Corp., is letting up in the competitive fight to be innovative and serve customers. Edwards said: "Our competition has been good for customers. Like rivals Coke and Pepsi, we've made each other become better." And, each company will likely continue to seek out exclusive deals to undercut the other.

* Author's Note: Co-opetition is a word coined by Ray Noorda, founder of the networking software company Novell. It is also the title of a 1996 business management book by Adam Brandenburger and Barry Nalebuff. For information, see http://mayet.som.yale.edu/coopetition.


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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