An EContent Interview with Dave Shaffer, Thomson Financial CEO

Page 2 of 2

RM: Do you think that the market, both personal and business, are ready to pay for content on the Internet?

DS: Fortunately, we play very little in the consumer space, and because of that, I don't know that I'm the expert that you should talk to on the consumer-side of that question. On the professional side of the question, people have demonstrated, through the billion dollar plus revenue that we get today, that they are willing to pay for information over the Internet.

RM: If it helps them do their job?

DS: Exactly. And we do not have advertising-based products that we sell over the Internet. We did not believe that model was going to be successful in the long run, and believe me, in the late 90s, there wasn't an investment bank in New York City that didn't talk to us about how we were missing an opportunity, how we should have been spinning out parts of our business in Internet models, how we should have been creating tracking stocks for some of these companies and so forth. We didn't do it. And it was because we believed strongly in the business model we had already put in place.

RM: Do you think that electronic information vendors have to approach the market differently than a traditional textbook or paper publisher?

DS: There are a number of differences. When you are vending a print product or a CD, you are making the determination about what's important to the end-user. When you deliver a product electronically in a database, the end-user can determine what's important. The move from print to electronic distribution allows people to make better decisions faster.

RM: Do you think that the current economic conditions in the U.S. and around the world will affect the growth of paid electronic content, or given your success, will people pay for information if they need it?

DS: We haven't announced our financial results for 2002, but when we do, I think you will see that electronically distributed information is still valuable and there is growth even in down-markets. Now there are certain parts of our business that are more affected than others, but that isn't dependent upon wheth- er our data is distributed electronically or via print. It's more dependent upon how many people have lost their jobs in that particular segment. That's what's impacting content providers' ability to gain revenue. And I think if you look at our specific experience, print has eroded more quickly than we thought it would erode in this economy as opposed to electronic net growth.

RM: That's interesting. Why do you think that is?

DS: Because I think people are making value trade-offs at this point, saying we just can't afford to keep buying both print and electronic. So let's get just the electronic. There's just so much more functionality associated with electronic distribution.

RM: And you've found that from your perspective, once you've ramped up, that the electronic distribution is cheaper for you and therefore more profitable?

DS: Most people who've written on electronic distribution have come to the same conclusion, that it's costly to get involved, but once you're involved, you can add more and more to the infrastructure, thereby improving your margin. When you're making the transition, it's fairly expensive and sometimes it hurts margin. But once you've created scale, then electronic distribution saves you the paper, print, binding, and distribution.

RM: When you distribute information electronically, you have all these different sizes of scale and technologies to deal with. Are you finding that you have come up with delivery methods that can work on all different forms of technology?

DS: It is something that you have to deal with, but the bigger problem, in my view, is the bandwidth that goes to the device because once you get to the device, it's just a formatting issue. How large is the screen that you're sending this data to and how do you format this data that goes to that screen because it has to be formatted to multiple screens whether it's a PDA or a 21-inch monitor. 

If I'm a lawyer in a courtroom and my opponent is arguing his side of the case, and I want to check a fact that he just reported, I go into my Palm Pilot and I input information and go back to the West database on a wireless basis. I can only receive so much wireless data in that PDA and that's really what gets more in the way of how we deliver information, not the format that we're using to put it on the screen.

RM: As a content-creator, though, do you need to be aware of these kinds of technology issues?

DS: We have to think about all these kinds of things. As a content-creator, you've got to think about data compression techniques, you've got to think about bandwidth going to your customer, you've got to think proprietary pipeline versus wireless distribution, format on the screen, type of equipment, number of servers, and how much tolerance is there for delay in getting information to a screen once they push the ENTER key. All of this comes into play in determining how you're going to distribute.

RM: Do you see electronic content becoming more prominent and print taking a backseat?

DS: Yes, I believe that will be the case. I think that people are making value determinations. They're saying it's better for me to become more efficient and effective, and I can do that electronically, rather than hire four analysts to pour through books to figure out whether or not I should be doing something, and I think you'll see electronic moving to the fore and print taking a backseat.

Page 2 of 2