Reed Numbers
February 23, 2010
Short honk: I read “Reed Looks to IT Outsourcing to Cut Costs”. I wanted to know if there was any magic behind the company’s financial reports and I was curious about how outsourcing was going to impact existing staff. For information about Reed, click here.
Well, not much was new in the info department, but I did notice several items.
First, the big payday was the result of an acquisition. I noted this telling passage:
Reed saw underlying revenues and adjusted operating profits fall 4 percent and 15 percent, respectively.
Second, Reed is banking on legal and professional information to put the ball in the net. The only problem is Google’s plugging away in the legal information arena. Google has dumped legal info into Google Scholar, but there are some interesting links in Google’s US government index, and from what I hear on the goose pond, there is more legal info coming. Google gives away legal info, allowing advertisers to foot the bill. Reed will have to find a way to compete with Google’s subsidized business model.
Third, the fancy talk about more software and better customer support is interesting, but these are words that may keep the Wall Street folks happy, but I think that this is an old cassette tape stuck in the boom box.
My view is that Reed will face increasing pressure going forward. Last time I checked, there were fewer and fewer attorneys willing to spend big bucks to tap into expensive legal databases. Libraries have some money but there is fierce competition for those dollars which means marketing and sales costs are going up and up.
Outsourcing is a fancy word for getting rid of staff and finding lower cost sources. Interesting but what happens to the “quality” and “value” of the information products? Fun to watch this info giant move forward in my opinion.
Stephen E Arnold, February 23, 2010
No one paid me to write this. Because I mentioned costs, I will report not payment to the Treasury Department. Money wizards there for sure.
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