According to Peter Nientker, global strategy director of Elsevier Science, "The combination of Ei's products and services with our journals and electronic products, like ScienceDirect and Elsevier Electronics Subscriptions, will create a unique integrated service to the engineering community."

John Regazzi, president of Ei, said, "The integration of Elsevier's technical and engineering publications with Ei's databases and access programs will provide a strong basis for developing high-performance, high-value information services for professional engineers and engineering students." Regazzi has agreed to head up the new business for Elsevier Science, which will operate under the corporate name Elsevier Engineering Information Inc.

Background on the Companies

The February 1998 issue of Information Today features an interview with John Regazzi conducted by IT journalist Richard Poynder during the International Online Information Meeting in London this past December. The issue was already at the printer when the news broke about the acquisition. In the interview, Regazzi relates the unusual history of the company that was chartered in 1934 as a not-for-profit organization, but with no members, no public money, and relying on subscriber revenue only for support. In 1994, the company was restructured from a non-profit to a for-profit organization, owned by employees and management plus a group of private investors.

Regazzi also discussed with Poynder the transformation of Ei from print to electronic, from distributor sales outlets to direct sales, and from an old-style indexing and abstracting service to an aggregator of a range of resources on the Web. Under his leadership, Ei has clearly shown itself as a company willing to make some tough strategic choices--and choices that seem to have worked during a time of great upheaval and uncertainty in the information industry.

Ei has been famous for over 100 years in identifying and organizing information about the published engineering literature, and its Compendex products are the most comprehensive interdisciplinary engineering databases in the world. The Engineering Information Village was one of the first full-service sites on the Web to offer a variety of services and information products to the engineering community. Ei's sales in 1997 amounted to $10 million.

Elsevier Science, with its headquarters in the Netherlands, is a member of the Reed Elsevier plc group, with offices in Europe, the Americas, and Asia Pacific. It publishes approximately 1,200 scientific journals in all major scientific, technical, and medical disciplines. It also offers a substantial range of database and electronic library products, including Elsevier Electronic Subscriptions. Organizations gain access through Elsevier Electronic Subscriptions to Elsevier ScienceDirect, an online host database that will make available all of Elsevier Science's academic journals and those of other participating publishers.

The Future for Ei

In a phone conversation, Regazzi provided some additional information about the acquisition. The 42-person company will be a wholly owned subsidiary of Elsevier Science and will remain in its New Jersey headquarters. There are to be no employee layoffs, and Regazzi anticipates additional growth as the new Elsevier Engineering Information works to integrate existing products from Ei and Elsevier.

He said that as Ei had assessed market needs, the request most heard from customers was for access to full text, and that this clearly weighed in their decision to accept the Elsevier offer. With the ready availability of Elsevier publications, he views the purchase as a win situation for Ei customers. Ei had been moving beyond just delivery of citations and in the direction of linking or delivering the actual articles, so this seems to be a logical progression. Elsevier also provides Ei with a greater global presence, something the company had been striving to achieve.

Elsevier—The European Microsoft?

Recently, Reed Elsevier has been on a buying binge, snapping up companies large and small—competitors, successful electronic products, Web start-ups. Late in 1997, it announced a merger with Wolters Kluwer, its Dutch rival, that would create the largest scientific publishing and information group in the world. (See Richard Poynder's coverage on page 1 of the November 1997 Information Today.) While still working through the merger timetable, Reed Elsevier announced in quick succession the agreement to acquire the Beilstein database, and the purchase of several companies from the Current Science Group including BioMedNet and ChemWeb. (See the news announcement on page 3 of the December 1997 issue of IT.)

In a December 29, 1997 article, The New York Times reported that Reed Elsevier's aggressive expansion had bred resentment, and it told of the faculty of Purdue University refusing to absorb price increases for Elsevier journals and canceling titles. Reportedly, even some corporate customers have canceled Elsevier subscriptions, one company doing so after a cost-per-article study.

In the spring of 1997, the Reed Elsevier group signed an agreement for a strategic relationship with Microsoft Corp. Some observers say they see a lot in common between the two companies: They are both huge, cash-rich corporations that are busily buying their competitors, influencing pricing, and angering customers. There had been grumblings for some time about the high cost of Elsevier science journals, but the news of the Ei purchase set off a flurry of anti-monopolistic comments on library and engineering listservs.

Consolidation and striving toward economies of scale are definitely trends in the information industry, as in other high-tech sectors, and they make good economic sense (and analysts love it). But Elsevier has now taken on the same public relations problem as Microsoft faces. Disturbed customers say that competition is stifled and prices are being driven up. It is also possible that U.S. or European regulators may require some concessions.

But, back to the Ei-Elsevier perspective: There is definitely the "potential for a nice alignment of objectives," as one industry observer expressed it. John Regazzi will have his work cut out for him, although the infusion of funds must certainly be welcome. He has molded Ei to be very agile and quick to respond to the marketplace, and Elsevier is a sprawling publishing giant. Can he steer the new Elsevier Engineering Information Inc., managing the contrast in corporate cultures, and making decisions that please upper management, shareholders, and customers? The information landscape is definitely changing.