Agenda

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Why should information professionals care? Because whether we are intermediaries or providers; the lessons to be learned from Mr Tomkins's trip to Grimsby can be extended to the way we view our own professional future. We need to read the runes wherever we can find them, and speculate widely on what they might mean for us.
Let's turn first to Headland's latest Business Information Resources Survey (reported in full elsewhere in this issue). Its biggest surprise this year is the finding that the BBC's is the most popular Web news site among information professionals. Gerry Smith, who has carried out the survey ever since it began 10 years ago, speculated a year ago that the BBC would in due course be able to challenge the existing newspaper sites. Now his speculation has been vindicated, prompting him to comment that 'the popularity of the BBC is a dramatic (if somewhat belated) reminder to business publishers that new players can successfully enter their market-places'.
But the BBC may be unusual in making so successful a transition from one medium to another. It seems to have been more difficult for others. Last January, the premier business information publisher the Financial Times Group announced that it was selling its Business Information Products division to Lexis-Nexis (a part of Reed International, which also ultimately owns this journal). This means that, along with its customer list and access to its European market, Lexis-Nexis will also acquire the trusted brands of FT Profile, FT Discovery and FT Newswatch. The move, said the FT Group Chief Executive Stephen Hill, reflected the fact that the FT's archive services had a strong niche, but lacked the scale to compete successfully in the worldwide market. What is particularly remarkable about this is that the FT is not exactly a newcomer to online, but was prescient enough to acquire its own online capability 13 years ago.

Prescience is not enough
Hailed in 1987 as a far-sighted move, the FT's strategy was to acquire a service called Datasolve from Thorn-EMI. The technological antecedents were impeccable, and the move was one of the first in which a global business information brand established itself as an online player. Conventional wisdom at the time was that this would render the FT's lead in the end-user online market that everybody was predicting unassailable. No-one would have been foolish enough to suggest that, by the turn of the century, the FT would be bowing out as an online service provider to the comparatively unknown Lexis-Nexis. Now look at the other side of the story. Lexis-Nexis is one of the oldest names in the online business; some 13 years older than FT Profile, in fact. Originally owned by a company called Mead Data Central, the legal information service Lexis began in 1973/4, and the full text news and business service Nexis in 1980; a full seven years before the FT's acclaimed purchase of Datasolve. In those pre-PC days, the only way to develop such a market was to supply customers with high priced dedicated terminals, capable of doing nothing other than delivering MDC's offerings. This restricted its market to large, information-hungry organizations that could justify the initial investment, but it did also have the effect of locking customers in. More than a quarter of a century later, and now available via dial-up or over the Web, Lexis-Nexis remains one of the largest full text online services in the world.
Yet if you were to stop 100 people in the Square Mile of the City of London and challenge them to name three business online services, you can be almost certain that Lexis-Nexis would not be one of them. Ironically, the Financial Times's ft.com probably would. Chances are that one of your random sample's most popular choices (not a completely accurate one, as it happens) would be AOL. It's just a bit older than FT Profile, but it has only really risen to prominence over the last five years or so, with the galloping expansion of the Internet.
When FT Business Information was busily acquiring Datasolve, few would have dared to predict that, only a dozen years later, an online service provider would be the subject of the biggest merger the world had ever seen. Indeed, AOL might have missed the boat; it was slow at first to abandon its proprietary software for Web standards, even though its continued success depended on holding and capturing even more of the mass market. When it did finally move to the Internet, it nearly bombed again, as its rush to sign up new users prompted it to abandon time charges for a flat rate fee in 1996. The result was that users stayed online for far longer, systems crashed and there were regular periods of down time.
As it is, this remarkable deal means that Time-Warner gains a mature online provider, experienced in delivery of interactive services, with the largest single online customer base in the world and some of the best-known Internet brands: AOL; CompuServe; and Netscape. AOL gains access to a cornucopia of published content, delivered to 120 million magazine readers Agenda worldwide, and to the home entertainment market through a broadband cable television network capable of delivering nearly 6000 Warner Bros. movies through Home Box Office (HBO) and the Cartoon Network, as well as world news through CNN. These are all directly owned by Time-Warner. Add to all this Warner Music's proposed merger with EMI, which would create the world's largest music group. Already dabbling in interactive television, AOL could therefore envisage in due course a mass market for both movies and music on demand, plus home shopping, all in addition to its existing Email and Internet information services.

Content still king?
AOL's $160 billion all-stock takeover of Time Warner; achievable because of the high valuation placed on AOL shares; has prompted widespread speculation as to what the future might hold for other similar players. Shares in the owners of content rose immediately on news of the deal. Reed International (owner of Lexis-Nexis) closed 10% higher and Pearson (owner of the FT) was up 15%. Gains were recorded among Internet companies too, although some analysts warned that it might be difficult for online rivals to achieve what AOL had managed. Victor Basta of the investment bank Broadview pointed out in the FT of January 11 that AOL was unusual among Internet companies in having a mature business, and that few of its rivals were well known brands that had commanded profits.
Will the dot com investors listen? Probably not. As share dealing becomes simpler and cheaper over the Internet, and enthusiastic amateurs club together to snap up Internet stocks, it's not unreasonable to assume that the bubble has some way to go yet before it bursts. It raises some alarming implications for intermediaries of all kinds, who can see themselves rapidly being ousted by DIY Internet share dealing services. Savvy graduates, who previously would have flocked to lucrative dealing jobs on Wall Street, are now shunning them. Only 12% of Harvard Business School graduates joined investment banks at the end of the last academic year, compared with a peak of 30% in 1987 [3]. Even call centres, the darling of the 1990s, are slowing. Although growth is predicted to continue, a recent Datamonitor report suggests that increasing direct use of the Internet will constrain call centre growth, from 12% to some 6% a year [4].
So is all finished for the intermediary at last? Some straws in the wind suggest not. Firstly, many of the new Internet investors get their tips from bulletin boards. Although many are reputable and run by established names in the financial services industry, many more are not. They may just be plain inaccurate, tempting neophyte investors into disastrous speculations. But worse, there is some evidence to suggest that some may be being deliberately used to ramp shares; using rumours to drive a share price up or down for a quick profit. Regulators are concerned about this, albeit largely out of concern for educating investors rather than enforcing rules at present. But, as a Financial Services Authority spokesperson told the FT on 15 December, 'If people want investment advice, chat rooms are not the best place to get it'. Chances are, though, that the most vulnerable will not listen and that sooner or later there will be a scandal.
More significant, perhaps, is a potential threat to public confidence in online banking. Confidence is fragile as yet, and recent problems with the Co-operative Bank's Smile service and with Prudential's Egg (both reported in the FT of 14 January) could do damage out of all proportion to the seriousness of the actual glitches. Two comments about this affair seem particularly significant for intermediaries. Firstly, Egg and Smile are probably experiencing no more problems than their more traditional competitors, but because they have no staffed high street branch structure behind them, the risk to their business is all the greater. And secondly, while computer users probably accept the inevitability of teething troubles in online banking, the much less motivated or experienced mass market, to be reached through new generation mobile phones or digital TV, is likely to be much less tolerant.

The end-user goes pro
All this might leave intermediaries; including those who deal in information, as opposed to shares or banking services; a breathing space. But don't count on it being too long. Estimates quoted in the FT of 9 December last year put the global number of mobile phone users at 375 million, a figure set to rise to 535 million by 2003, compared with only 163 million fixed Internet connections at present. Those mobile users will be using their handsets at least as much for online information and transactions as for voice calls; at least they will be if Microsoft and mobile manufacturer Ericsson have anything to do AGENDA Business Information Review, 17(1), March 2000 with it. These two teamed up at the end of last year to develop new software applications for the mobile market, leading analysts to predict that at least 10% of E-commerce would be conducted through mobile handsets within three years. In the UK, nearly a quarter of people's shopping money is expected to be spent on the Internet within three years, compared with not much more than 5% now (FT 17 January).
But what about the people of Grimsby? They may join in the scramble for handsets, and slowly start to purchase digital TVs, but there's no guarantee that they'll use them for anything other than chat and movies, is there? Actually, there is. Grimsby's parents may be a lost generation, but their children are not. Firstly, they are already well used to the idea of links between television and the Web; entertainment and education programmes for kids regularly feature follow-up Web sites. And secondly, radical changes to the National Curriculum that all schools in England are required to teach mean that, over the next couple of years, children will start being taught not only how to use computers and network services, but also how to retrieve and evaluate information. This requirement is going to apply across the whole curriculum; English and history as well as ICT; alongside completely new curriculum streams on citizenship skills and on learning how to think.
Headland's Business Information Resources Survey anticipates that Internet penetration of UK corporate desktops will be more or less complete by mid-2001; it's a trend that has been apparent for some time, and corporate information intermediaries have had time to reassess their services as a result. By and large, however, end-users have up to now been comparative amateurs, getting to grips with information overload where they find it useful to do so, but leaving the more difficult tasks to the professionals. But if the schools do their job properly, then the next decade or so should see quite a different breed of end-user appearing -one that can handle information problems as effectively as the professionals do now. Intermediaries will have to do some hard running to keep ahead -and Grimsby will never be the same again.

Agenda's predictions
So for our first set of Agenda predictions for 2000, we would like to suggest that...
• While the future of business-to-business E-commerce may be clear, viable consumer applications are much less certain.
• This reduces the perceived threat to intermediaries of all kinds.
• But it's only a breathing space, while consumers get to grips with new applications for familiar platforms.
• Beware of school leavers.