Thursday, April 17, 2008

Thomson: Publishing Mutates into Information Trafficking

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I'm someone who worked in publishing for a long time, but a few years ago I decided that publishing (of things printed on paper) was a business that was inevitably shrinking. This is not because we are living in some post-literate moment (that may come, I guess, but not yet), but because publishing with pixels is just so much cheaper than publishing with paper. So much cheaper, in fact, that the entire profit model has to be completely changed. Hence the importance of search engines. In old paper publishing, the equivalent of search engines existed (primarily in services sold to libraries), but they were necessarily a small part of the entire industry. Similarly, even though in old publishing and new publishing, we have things called "subscriptions," they really are totally different. A subscription to the Wall Street Journal gives me a paper six days a week. A subscription to the online WSJ gives me a searchable database of decades worth of information.

Anyone who knows me knows that I am a book-lover. I am no internet/computer triumphalist. (I mean, I love me some blogs, but I still walk around with my nose in a book.) Nor do I think it is impossible to make money publishing things on paper--individual companies and sectors do and will continue to do so for a long time, even as the "publishing on paper" industry as a whole shrinks.

The reason I mention this topic is an interesting post from The Curious Capitalist (Time's business and economics blogger). As many may know, Thomson just acquired Reuters (the new company is called Thomson Reuters). Thomson used to be in the newspaper business. It divested those assets. It was also in the textbook business until last year. Now as far as I can tell, it is exclusively in the information business. Some of the information is information that newspapers buy (syndicated through Reuters), but Thomson doesn't bother with printing its information itself. Instead, it sells its information through such divisions as Westlaw, Reuters, and Thomson Scientific.

Thomson seems like the very model of a company that recognizes that its business is a broad abstraction instead of a particular thing. "Information" instead of "newspapers and books." The counter-example that's always used in business school are passenger railroads. Because passenger railroads perceived themselves as railroad companies instead of "people transportation" companies, they didn't change with the times to successfully compete with automobile manufacturers and airlines. Because Thomson realized it was in the information business, it was able to ask itself, "How will we make money with information in the future?" Then it could act accordingly.

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