In the pre-Internet world before anybody had ever heard of online content syndication, lots of publishers made extra revenues by licensing their content for use in the corporate enterprise marketplace. The big guys often had sales teams to sell licenses direct. But even they, along with the smaller fry, also often licensed their content to Dow Jones Interactive or Reuters Business Briefing for redistribution to companies seeking business information.
In May '99 these two leaders merged to form Factiva. The company is a true powerhouse, with offices in 58 cities in 34 countries, including a new HQ in Manhattan. This week we interviewed CEO Clare Hart to learn more about how Factiva's doing and what kinds of deals publishers can do with it.
Q: First things first, how has the Internet's wealth of free information affected the corporate enterprise market?
Hart: I've been in the industry a long time. My recollection goes back to character-based screens ... then we went to Windows. The Internet just makes everything so much easier from a technology perspective. Everyone has access to the Web on their desktops.
We have a very clearly defined market: the global 4,000. We target key industries which have a strong need for news and information: financial, computer hardware/software, pharmaceutical, energy, media & entertainment, telecommunications, government, advertising & PR, automotive, consumer products, aerospace, chemical and insurance.
The Web has done a fantastic job of training our customer base! Ten years ago, it was the PR department, the library and maybe it was an information system. Then along came Lotus Notes and the more progressive companies made stuff available to all their employees. It was big step. Then the Web in 94/95 turned everything upside down.
Before the Web who knew what a Boolean search was? Now everyone knows how to do a search online. The Web's doing a great job training the user base because everyone's comfortable doing a search, accessing a site. It's also created a need for a service like ours because in the last couple of years the novelty of 'Let's just surf around and find stuff' has worn off.
Now people are stressed for time and they need to find information quickly. We have a huge content set -- 7,000 sources. The beauty is it's all universally coded by over 300,000 codes: by industry, by region, by subject matter, by company. You'll get much more relevant results because of this indexing.
So the Web has made it easier to roll out news for everyone in the organization, and provided training to our customer base.
Q: But hasn't the plethora of free stuff online made it hard to get cash for your content?
Hart: We go through phases. We went through a phase where customer contacts, who were either information professionals, sales and marketing, or corporate communications, sometimes ran into internal resistance when selling their organization on doing business with us. Objections were, 'Why pay for content? Isn't it free on the Web?'
So we've done a lot of work on two ROI [Return on Investment] studies comparing surfing the Web to find stuff versus using our service. In both cases there was a clear return on investment for our customers. They were making money by advancing a sale or saving money by saving time. In the comparison of our service versus a Web search there's no question you'll get more relevant content more quickly from us.
Those objections which came up a couple of years ago, then they died down a little, then they went up again and now they are coming down.
Q: So you're marketing content as more than just content -- what you're actually marketing is ease-of-search?
Hart: We sell content and intelligent indexing to people who are willing to pay for it.
The other things we provide are technology and services. We started offering enterprise roll-out services a couple of years ago to help the enterprise champion. Say an individual at Microsoft decides to roll out to thousands of users, our consultants help them market that internally. Plus our technology consultants help customers past the standard technical hurdles. We also provide value-added specific services for the enterprise, such as a partnership with Media Map for the PR function.
We're not only investing in the content, we're investing in the value-add. The services, the support, the indexing, the 300 client services staff in 38 cities around the world.
If you're a large bank, for example, and you're making a buying decision to serve users around the world, there's a great comfort in knowing Factiva has this terrifically experienced staff to help people get value out of the services we're delivering.
Q: Aside from the corporate enterprise model, are you distributing much content to Web sites?
Hart: We have 11 affiliate sites including Hoovers, Work.com and Wall Street Journal Online. You can go to those sites, do a search in the publications library and get a list of headlines returned at no charge. As soon as you decide you want the article, it's available for $2.95. Qpass is handling the back end billing. That's been very good and helped us accelerate the process of adding affiliates.
Q: What about syndicating content like Screaming Media or iSyndicate does?
Hart: We're just not that interested. Not that excited. We haven't had that much demand. We did research on it like everybody else. The revenue model didn't look so exciting and we're in it to make money. We're in business to deliver revenue!
Q: Why should publishers consider working with you?
Hart: We have over 1,000 publisher relationships. Some are aggregated through Bell & Howell or Gale Group. Our content strategy is very clear. We're going after top newspapers and newswires in each of the major markets around the world. Our second tier content strategy is targeted content for the vertical markets we serve.
The value-add to publishers is they are participating in a site that's delivering content to over a million paying subscribers. Also their content is universally indexed even if they didn't do it themselves so they won't be left out.
Q: Are you considering working with the new world of Web-only publications and email newsletters that's springing forth now?
Hart: We take a tremendous amount of feedback from our customers. In October we interviewed 30 people representing companies around the world to understand what they want in product functionality. When they wanted electronic-only sources we worked toward getting that content.
Also our Dow Jones Interactive site has a "Best of the Business Web" center where our editorial staff identifies key news and industry sites. We allow people to search the indexes and then when those sites headlines come appear we link out to the site. Some obscure industry sites can't send us their news, so we'll just drive traffic to their site if their content matches the needs of our subscribers. That's turned out to be a good way to help our customers find Web resources and navigate the Web. If site owners are interested in being linked to, there's a way to suggest a site within the Center. They should go in and suggest their own sites.
Q: What's the future looking like for Factiva? How are you growing globally, and are you planning wireless or broadband launches?
Hart: The US is growing faster than we thought it would when the joint venture was formed. So it's balancing out -- it hasn't hurt us that the rest of the world isn't growing as fast as we thought it would. The action moving forward is in the UK, Australia, Germany and France of course. Then you get to your markets who are not early adopters.
In terms of wireless, we've decided our strategy is really centered around corporate enterprise for the moment. We're focusing our technical efforts on the development of the Factiva service which will be a replacement product. It's scheduled for the Summer 2001. The truth is we're going to fully watch what our customers' wireless intranet strategies are before doing something. Our top 50 customers are looking at ways of putting mobile capabilities on their intranet so you can dial in and there's some way of putting information on your Pilot.
I really don't know about video. I don't think we'll own or store that content. We'll link to it. What would be better for our customers is for us to index transcripts of that information and then store a link to a video site. It's not possible yet but we're thinking about it.
Q: Last question -- what kinds of partnerships are you looking for online?
Hart: We're interested in more Web sites joining our affiliates program. We're a great, easy, logical link into a publications library of 6,000 sources. Web sites interested in that should contact Patricia Bridges our Vice President of Global ecommerce at firstname.lastname@example.org.
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