Strange Bedfellows, or Just Strange Times?


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The saying goes: "You've made your bed, now lie in it." I wonder why, if I've gone to the trouble to make the darn bed (as it were), my only option would be to lie passively. And if I am only given the option of lying prone, then at least let me use this liminal time to dream big.

Right now, most digitally-focused companies are dreaming of better times. And while not enjoying the feeding frenzy of better times, the industry is experiencing a fair amount of mergers and acquisitions. What's missing are the strong directives that often drive such deals. You've seen the announcements: Company X buys Company Y but has "no plans to make changes in the day-to-day operations," or "plans to continue operating the business as a separate entity." So why buy it? Yes, with integration come challenges. But when I see a company acquire a complementary product or technology, I can't help but hope that they'll combine these strengths to produce something more powerful than the parts' sum.

When D&B announced plans to acquire Hoover's, I saw great potential in their joined forces. But the Hoover's company profile suggested otherwise, stating that D&B "plans to maintain Hoover's Online as a separate product offering of its E-Business Solutions division." Clearly, a content industry old-timer like Dun and Bradstreet—founded in 1841 as The Mercantile Agency—wants to shed its pinstripes for a bit of digital cachet. Three years ago, it shrank its mouthful moniker to the bite-sized D&B and recently the company has aspired to "an important presence on the Web."

Hoover's also began as an old-school information provider of sorts, publishing—as a book, mind you—Hoover's Handbook 1991: Profiles of Over 500 Major Corporations in 1991, when the company was still known as The Reference Press. Within a year, the company dabbled in digital, with an ill-fated Sony DataMan edition of the guide. Then, when Patrick Spain (now on the Board of Directors) took the helm in 1993, he developed Hoover's into a purely digital info provider. Under current leader Jeffrey Tarr, the firm focuses on its successful subscription information model. Hoover's is an information product come of age in the econtent era.

And now, D&B, with its "blueprint for growth strategy," has seen fit to acquire Hoover's. It looks to some like they struck quite a bargain; at press time, a group of Hoover's investors—including Marathon Partners L.P. and investor Mario Cibelli—said it's "vehemently opposed" to Hoover's pending acquisition by D&B and that the $7-a-share merger consideration is "grossly inadequate." But putting the price issue aside, what does this particular acquisition signify in the econtent marketplace?

An interesting chat with info heavy-hitter OneSource CEO Dan Schimmel suggested one answer. "People talk about consolidation because the content industry is shrinking or dead," he says, "but I think there are very strong growth industries like small businesses, a growth market D&B is targeting."

Schimmel expresses a common sentiment, saying that this is "a logical deal. It signifies a reinforcement of D&B and Hoover's commitment to the low end of the market—to marketing and sales applications of company information." But when Schimmel says low end, he isn't casting aspersions. There are distinct ways in which information gets into the hands of business professionals: One is that a high-level individual in an organization decides to have deemed-essential information delivered to the desktop. Another is subscription or à la carte-based info purchasing, where an individual seeks a specific nugget at a much lower price point.

In that second group lies potential for growth. Less-technical users, primarily sales and marketing professionals, who find they need information on sporadic basis, are the focus of a number of content pushes, both on the technology and information fronts. Increasingly, vendors cite these individuals among their market target. Thus, when a D&B wants to shift its attention from the decision-makers and information professionals at Fortune 500 companies to the teeming masses in the middle ranks of business, it looks to a company like Hoover's, which has the bulk of its subscription hooks anchored solidly in this market.

So there you have it: D&B wants to experience growth, and there's growth to be had in providing information to sales and marketing professionals, which is what Hoover's does best. Buy 'em up, feed 'em some new leads from your database, and "experience growth." Somehow, that aspiration strikes me as pretty pale. Maybe today's claims must be cautious, or maybe D&B just doesn't see fit to mess with a product that is actually showing a profit in this climate. According to Schimmel, for the small businessman who's found Hoover's an inroad into information, the union "is good in that the resources of a large company like D&B will be at the disposal of an affordable information provider like Hoover's." But at the end-user end of the road, it would be nice to hear something about the future dreamed by this well-matched pair beyond making a tidy bed and turning a tidy profit.