On the Flip Side


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People love a scandal. Without doubt, as soon as mankind was able to raise its collective head an inch above the level of safety on Maslow's Hierarchy of Needs, it not only found time to dish dirt, but invested a fair amount of energy scandal-watching. Even those who disdain back-fence gossip find themselves rubbernecking an accident on the freeway from time to time.

And who better to gawk at in our appreciation of the bad and ugly than rock stars? Take the most recent spate of vindictive Michael Jackson voyeurism. The man has released one album in seven years and America still has an appetite for his destruction. Often times, we don't even want to like our rock stars, but we love to hate them. We expect them to be off the wall, and are thrilled when they're bad.

It's remarkable how thin a line separates worship and crucifixion; it's the intensity of our identification with our objects of idolatry and scorn that unites them, and defines us. Econtent industry analysts have bemoaned the identity crisis from which our industry has suffered. Where do we fit in: technology, publishing, library services, business solutions, all of the above? And what would lend itself to crafting an identity better than a public face, a champion of our industry? As Outsell's e-briefs editor David Curle put it, "The rest of the dotcom industry had their guys. This industry doesn't have an identity; it doesn't have a ‘rock star' it can identify with. Flip's the bad boy everyone's intrigued by." For better or worse, Andrew Filipowski, CEO of divine, inc.—perhaps better known as "Flip"—is the closest thing the digital content industry has to a rock star. Flip cruises around on a private jet sporting a leather jacket and waist-length hair. He courts the media and coins catch phrase even faster than he acquires companies. He—not unlike rap, pop, or punk stars—has the uncanny ability to speak in strings of jargon that sound mad hip, but often don't translate quite so well into action.

I don't care if you love him or hate him; Flip remains the only person in our industry with enough of a public persona to go by a nickname. But since divine's inception, those inside and outside our industry wondered at Flip's frenzied acquisitions. While divine certainly got some fine firms and products (occasionally at deep discounts), the overall scope of his integration plan was never clear, despite his skill at crafting phrases like, "divine extends business systems beyond the edge of the enterprise throughout the entire value chain, including suppliers, partners, and customers." As Curle recently remarked, "What strikes me is that the whole dotcom bubble we were in, and that divine was still riding on, was made possible by suspending logic."

So divine's card house sits on some pretty shaky ground. With the RoweCom scandal dragging on—leaving both libraries and publishers shaken by the ripple effects that could cost millions—RoweCom had to file Chapter 11 to facilitate its sale to EBSCO. Now divine itself has filed Chapter 11 and is considering divestitures. For months, all manner of media have vilified Flip, even calling divine the Enron of the content industry. And the sentiments aren't unreasonable. Short of mugging a nun, what could be worse than bilking libraries? And, in the wake of WorldCom, Enron, Andersen Accounting, Adelphia, Tyco, and AOL-Time Warner, pre-supposing accounting hanky-panky isn't exactly a stretch. As many a C-level exec might admit off the record, accounting sleight of hand isn't a new thing. In fact, it is likely a pretty common occurrence that only comes to light in an economy like this one. Regardless of "lessons learned from Enron" hopes, we can hardly expect accounting to be reinvented in today's public-companies-must-show-growth reality.

But while we may long for a poster-boy (or even a whipping boy), no one in the econtent industry can regard the potential toppling of divine with much glee. Flip may be the bad boy we love to hate, but we wanted to believe the yarn he was spinning. We wanted to see new life breathed into Northern Light and RoweCom—even the struggling subscription business as a whole. As Leigh Watson Healy, Outsell's vice president and chief analyst put it, "We were seeing a vision emerge from divine. The problem, as always, is execution." And those expectations weren't completely unwarranted, given that Flip's last rock and roll hoochie coup, Platinum Technology, Inc., sold to Computer Associates for $3.6 billion, garnering Flip close to $300 million personally.

This time, though, his grandiose plan has fallen on hard times. And the industry as a whole will be feeling the fallout for some time—with wary library clients, users wondering which divine product will go the unpredictable way of divestment, and an identity crisis persisting behind the kind of front man that might boost record sales, but isn't currently engendering the kind of vision we want to personify our industry.