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NewsEdge Announces a Change in Direction with New E-Content Strategy
by
Posted On May 15, 2000


The last year or two have seen continuous change and market adjustments for the NewsEdge Corporation (http://www.newsedge.com). In 1999, it created the subsidiary NewsPage.com to offer products for individual subscribers, then renamed it Individual.com, and shortly thereafter sold 80 percent of it to Offfice.com in order to focus on the business-to-business market. The company agreed to be purchased by RoweCom in December 1999, but by March 2000, that deal fell through, leaving the two companies agreeing to a partnership. (See the NewsBreaks from December 13, 1999, "RoweCom Signs Agreement to Acquire NewsEdge," and March 20, 2000, "RoweCom and NewsEdge Cancel Acquisition Agreement, Announce Strategic Partnership.")  Meanwhile, it has added and subtracted a number of key executives, and struggled with a stock price that declined over 60 percent in the last 12 months and is currently near its all-time low.

Now, in May 2000, as it announced rather disappointing first quarter financial results, it also revealed a "strategic realignment that dramatically broadens its focus from serving knowledge workers in Global 2000 corporations to providing digital e-content to over 2.5 million business oriented Web sites worldwide." The plan leverages the company's core strengths in technology (the NewsEdge Refinery), editorial staff, and contracts with content providers to move into the hot but competitive market of providing targeted business content to extranets, portals, and public Web sites. The company reports that it has reorganized its resources around e-content management and is developing new applications and adding sales channels. Nearly half of the company's resources are being dedicated to working on this new strategy.

"This is the biggest change in direction in the company's history," said Cliff Pollan, president and CEO. "We have been very successful selling news to knowledge workers for the past decade and are using that success as the foundation for our move into new markets. Currently Delphi values the e-content market at $13 billion. We will now leverage a considerable portion of our resources to help current clients and other businesses extend their customer and supplier relationships onto the Internet."

The company then announced that its first product for this new initiative is eTopics, which delivers daily business content from over 200 information sources to portals, extranets, and e-commerce business exchanges. The product has been available on a limited basis over the last 8 months, and, according to the company, it has generated annual subscription orders worth over $1 million from more than 60 clients. Many of them are already enterprise customers for NewsEdge Insight, its product for internal use by corporate knowledge workers.

Sources available in eTopics include The Associated Press, Phillips, IDG (InfoWorld), and Bridge. Insight provides access to over 600 sources, three times the number included in eTopics. The sources available in the products are determined by the distribution rights granted to NewsEdge by the information providers. For example, sources for enterprise customers of Insight, but not available in eTopics, include Dow Jones Newswires, The Economist, Reuters, AFP (Agence France Presse), IMS Word Publications, and Nihon Keizai Shimbun America, Inc. (Nikkei).

Customers of eTopics can choose among 1,500 Review Topics, or they can opt to work with NewsEdge editors to create custom topics to be maintained and delivered to their sites. The NewsEdge site offers views of sample implementations for three of their customers.

"With eTopics, business Web sites can give their users timely, fine-tuned business content, which is a proven means for successfully extending brand, building audiences, and increasing habituation," said Pollan. "NewsEdge is unmatched in the breadth of topics it offers and depth of expertise from editorial industry specialists who build filters and review content. eTopics brings to bear our expertise in information ‘shaping' for a new and promising market."
 

Q1 2000 Results
NewsEdge also announced its financial results for the first quarter of 2000. The company reported a net loss of $7.1 million on revenue of $17.3 million, versus a first quarter 1999 loss of  $1.3 million on revenue of $18.3 million. Ron Benanto, NewsEdge CFO, indicated that the Individual.com transaction and the terminated RoweCom acquisition had one-time adverse effects on the numbers.

Despite the reported loss, Benanto indicated that the company was in a good position to move forward on its new strategy. He said that it was logical to go for other content distribution opportunities, since the company already has a large share of the current awareness corporate market, which therefore constitutes a limited area for growth. He estimated that market to be about $200 million, of which they have about one-third. (Compare that number to the $13 billion estimate for the e-content market, and you can easily see the appeal.) He also indicated that the company was working on other products and services to follow the eTopics product. When asked about the competition (Comtex and other content syndicators), he stated that no other information aggregator offered the breadth of information for business-oriented sites.


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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