News aggregation is a beleaguered market that has become increasingly consolidated and beset by free news portals. However, with its acquisition of NewsEdge from the Thomson Corporation, Acquire Media believes it can sharpen this product with its technological edge, and hone it into a leading targeted real-time news tool.
Thomson acquired the then-independent NewsEdge for $43 million about five and a half years ago, but announced that it was putting the property on the market this January after carefully analyzing its product portfolio and deciding to “realign specific services within the Business Intelligence Services.” Thomson moved Broker Research and Insite into Thomson Financial, and put NewsEdge (and TBI Market Research, branded as Profound) on the block.
Many speculate that the realignment is a wise move as, despite its many strengths, Thomson faces stiff competition from Factiva and LexisNexis for business news content and all providers in this space must contest with popular offerings like those from Yahoo! and Google. As Shore Communications lead analyst John Blossom puts it, “NewsEdge has always been rather an orphan at Thomson, never properly integrated into the Dialog offerings and never really positioned effectively as a real-time business intelligence service.” He points out that “Business intelligence services abound these days, and being able to aggregate news feeds is becoming a commodity business unless there are unique aspects to the content or technology that can make a service stand out.”
Interestingly, when Thomson made the NewsEdge acquisition, it was viewed as a move to add more than business news to the Thomson blend; NewsEdge brought with it proprietary content filtering and delivery technology, including XML-enabled automation.
This time around, NewsEdge’s buyer will be bringing the technological expertise to the mix and believes that this will return the product to the fore. On July 17, Acquire Media announced that it will purchase NewsEdge from Thomson for an undisclosed sum, with the aid of an as-yet-unnamed investor. The company will acquire all of NewsEdge’s technology, publisher contracts, relationships (and associated revenue), its accounting system, billing interface, editorial operation, content filters, and much of the staff. Acquire Media is best known for providing digital media distribution software and services, primarily to the publishing and financial services industry.
However, according to Stewart Clark, Acquire Media’s VP of sales for publishing, “We ended up getting into the news aggregation space in two ways. First by licensing technology to financial institutions, which needed a wide variety of sources so we had to go out and license content. Then, about four years ago, a wealthy day-trader came to us and said, ‘I will write you a check on the spot if you build me a news application that cuts out all of the latency in news transmission.’ He is one of a rare breed that trades on the news and he wanted it faster than anyone else. That was the birth of NewsTrade.”
Clark says that NewsTrade “is very comparable to NewsEdge Live and NewsWare, the difference,” according to Clark, is “superior filtering and near-zero latency.” One of the most valuable parts of the acquisition, according to Clark, are the “three thousand or so highly refined and valuable content filters that Thomson has continuously worked on.”
Undoubtedly, NewsEdge brings with it a valuable customer base as well and Clark emphasizes that “continuity will be king for the first year or so.” He continues, “We will try to keep the user experience as comfortable as possible, while introducing new products and new technologies. Retaining customers is paramount for the initial phase.”
“While we may not be writing the biggest check, we will provide continuity,” Clark says, which is something Thomson felt was important. “Thomson sought a buyer focused on customer retention as well as enhancements, because they didn’t want the Thomson name besmirched. They don’t want their customer base to in any way be abandoned.”
Ultimately, however, with its a one-year redeployment plan, Acquire Media thinks that it can infuse the product with the sort of technology differentiator that will allow the brand to become one of its lead products, hopefully leading in the marketplace as well. “NewsEdge users have had to rely on antiquated technology. The next phase will be to move the customers onto a more robust and flexible platform.”
So Thomson gets continuity for customers, Acquire Media’s existing customers will get enhanced filters and a large infusion of content sources, and NewsEdge customers can count on continuity and look forward to technological improvements.
Along the way, Acquire Media will pick up improved content filters, new publisher relationships, and, as Clark says, “Overnight, we’ll have entry into areas like pharma and manufacturing, in which we’ve not had the expertise or content to effectively penetrate.”