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AOL Acquires Personal Library Software
by
Posted On January 26, 1998


On January 21, America Online Inc. announced that it acquired Personal Library Software (PLS), well-known to us in the information industry as a leading developer of information indexing and search technologies. PLS, based in Rockville, Maryland, was a privately held company, with Knight Ridder, Inc. and America Online each holding significant minority investments. America Online, founded in 1985 and based in Dulles, Virginia, is the world's leading Internet online service, with over 11 million members worldwide.

PLS had developed the core technology for search within the AOL service. Search is used throughout the AOL service, including in such popular features as the Member Directory, AOL Find and Channel Search. PLS products are well known for their power, speed, automatic concept searching, ease-of-use, dynamic updating, and scalability.

PLS technology is at the core of online and CD-ROM products and services provided by leading information companies, including AT&T, Dow Jones, The Washington Post Company, USA Today, Bertelsmann AG, and Knight-Ridder, as well as AOL.

The Official Word: A Good Fit for Both Companies

In the January 21 spate of announcements, Mike Connors, president of AOL Technologies, said: "Personal Library Software has been an important technology partner of ours for many years and is well respected throughout the industry. It has played a significant role in providing our members convenient and easy-to-use search services. Through this acquisition, AOL can better work to ensure the future of PLS technology for our members and partners."

"This joining of forces is a natural event in the evolution of search," said media analyst Paul Kagan, PLS chairman and its largest investor. "The advent of huge databases, linked by the Internet, has presented information providers with new challenges in distribution to the end user. I believe the combination of these two companies will lead to new advances in retrieval that will substantially increase the knowledge and productivity of corporations and consumers."

"PLS technology has been designed and enhanced over the years with a constant purpose: to help as many people as possible find the information they need faster, easier--and better," said Matthew Koll, a founder and former CEO of PLS who will be joining AOL. "As AOL continues its rapid growth, we have an unprecedented opportunity to help tens of millions of people--practical information seekers--turn today's potentially overwhelming mountains of information to their advantage."

In exchange for AOL's common stock, AOL will obtain PLS and its family of software products. Specific details of the deal were not released. AOL plans to manage all aspects of PLS, and will continue to emphasize development of industry-leading search software while continuing to support PLS's existing customers.

This transaction allows AOL to cost-effectively secure the future of the key technology supporting the service's core search engine. Currently, PLS software indexes and enables members to search over 500 content databases, with the number growing daily. The PLS search engine software on AOL allows members to navigate easily and efficiently throughout the AOL service.

"We welcome PLS employees into the AOL family," said Connors. "PLS is well known for its powerful and easy-to-use search engine software, and as AOL grows and makes more content available to members, efficient and easy-to-use search features become increasingly important; member satisfaction is greatly enhanced when they are easily able to find the specific content they are seeking. This acquisition of core search technology will enable AOL to continue to improve our current search features, as well as more quickly roll out new ones in the future."

Connors added: "We also look forward to working with the industry leaders who rely on PLS. AOL is committed to continuing to offer PLS clients the advanced technologies and the high quality customer service to which they have become accustomed."

Background on PLS

Personal Library Software was founded in 1983 by Matt Koll. Those of us who've been around awhile may still remember SIRE, the original product developed by Koll and some colleagues at Syracuse University for developing in-house databases. (By the way, that's Dr. Matthew Koll--Ph.D. in information transfer from Syracuse.) SIRE evolved into Personal Librarian in 1986. It was the first commercial product to offer natural-language queries, relevance ranking, concept searching, and search by example. In numerous articles over the years that tested various search and retrieval packages, Personal Librarian often took top honors. In an article in Searcher back in July/August 1995, John Houser stated, "Personal Librarian is unparalleled at text retrieval."

The company grew from modest beginnings (Koll and two partners) to a highly successful business with its software powering many of the most important online search services, CD-ROM search capabilities, and enterprise-wide applications. PLS managed an early and successful adaptation of its products to the Web. While neither AOL nor PLS would acknowledge the number of employees involved, the company employed about 60 people (as of 1996), and maintained offices in California and Europe. Following the acquisition announcement, a number of people have left the firm, including Andrew Rodnan, president and CEO since April 1997, and Joe Haley, director of marketing. Sources indicated it was likely that PLS would not continue to lease its current facilities, but would move employees into one of the AOL campus buildings in northern Virginia.

Rumor has it that Matt Koll was pushed out of the PLS CEO spot in the spring of 1997 over a disagreement with the board of directors. In a phone interview with Koll, he acknowledged that he had stepped away from the day-to-day operation of PLS but remained an active member of the board. He now views the purchase of PLS as the close of a very long (15-year) chapter in his life, and the beginning of a new chapter, moving on to additional developments and challenges and getting back closer to the technology. Koll's new role is to be an AOL Fellow, a chief scientist type of position. He will not be directly leading the PLS group. Howard Heller, former PLS vice president of engineering, has been named senior director of PLS development for AOL.

Reactions and Concerns

Many information professionals wondered what had happened with the promising AT1 Internet search service that PLS launched in December 1996. After the initial announcement of AT1, there had been no news. The service marked a move for PLS from being mostly a technology company to one distributing content. AT1 combined several PLS technologies to offer publishers and users the ability to search for content residing in databases not viewable by Web spiders. PLS had arranged participation agreements with over 20 publishers, and an agreement with AOL for placement in the Internet search area. Koll admitted that the project had not progressed past the initial stage of just sending users to appropriate sites. The second phase, scheduled for mid-1997, was to have delivered content to users' desktops and collected payment for the owner. Sources would not confirm or deny if it was decisions about this project that were the source of disagreement. AOL sources also declined to comment on the future use of AT1 at this time. It seems quite possible that the main technology for AT1 might be tapped for channel searching on AOL.

Reactions to the purchase news were mostly positive, although some in the information industry expressed concern about the AOL commitment to existing PLS customers for both product support and ongoing technological developments. Will only AOL needs and concerns drive future directions for the company? Will agreements with Dow Jones, Knight Ridder, and many other publishers remain viable with an AOL owner? AOL sources promise that it will be business as usual in support for existing PLS customers, large and small. The additional revenue source from AOL may prove to be a fortuitous gain for PLS momentum.

Carol Tenopir, library school faculty member at the University of Tennessee and long-time industry watcher and writer, has written and spoken over the years about retrieval engines and natural-language searching. She has followed PLS products closely. She had this to say about the news:

"I am pleased to see Matt Koll will be a part of AOL/PLS ... For years Matt has been able to see where the retrieval software market is going and to position PLS in the forefront. From its days as the first relevance-ranking software for microcomputer applications, to the search engine 'behind' many CD-ROM products, to its online, networked, and Web applications, PLS has moved with the times. I have often said, scratch the surface of many online or CD-ROM systems and you'll find the PLS software. I hope AOL will recognize Matt's unique abilities and continue this tradition. AOL's sheer size worries me, but it has the right customers for PLS, so it may work out."

Personal Library Software may be reached at 301/990-1155, or via its Web site at http://www.pls.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.

Email Paula J. Hane
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