LexisNexis Group is one of the oldest networked content and data providers, and for many years its fustiness showed. What started in the early 1970s as an innovator in distributing legal information and news archives had — by the 1990s — become an old-school laggard, as such Internet-savvy data companies as Bloomberg L.P. surpassed its technology by offering a more generous menu of timely information, faster access, and better search tools.
That all changed in 2000 when Andrew Prozes was named CEO by LexisNexis’s corporate parent, the Anglo-Dutch publisher Reed Elsevier. His charge: turn the business into a data service powerhouse fit for the 21st century. By and large, he has succeeded. Through acquisitions and internal development, Prozes added software to tailor content to individual customer needs, livening up what had been a static catalog of information and turning it into an interactive, customizable system. Judging by the numbers, the strategy is paying off: After growing at an annual pace of about 10 percent between 2001 and 2006, LexisNexis’ sales rose 22 percent in 2007 and 36 percent in 2008, to US$3.6 billion.
LexisNexis is still best known for providing law firms and similar professional organizations with legal and archived research documents, but Prozes is focusing on high-growth, high-margin business content. For example, last year the company acquired ChoicePoint Inc., which provides data for background and criminal investigations, making LexisNexis a leader in risk analytics. (ChoicePoint drew negative attention in 2006 when identity thieves easily broke through the company’s security protocols to steal the personal records of more than 100,000 Americans. A Federal Trade Commission [FTC] settlement cost the company $15 million, and the FTC required ChoicePoint to set up strict privacy controls.) In April, Prozes spoke with strategy+business about the changing electronic content landscape and tactics for attracting customers who have so many other Web-based options for data and information.
S+B: Why do so many information providers fail to make money online?
PROZES: You will make money if you have content that people need, and if you deliver that content using technology that allows people to do their jobs faster. You must have comprehensive content along with easy tools for customization and clean navigation so individuals can get information quickly and in the right context. Any company with that combination is going to make money. Look at Bloomberg, Thomson Reuters, and Reed Elsevier.
But don’t assume you know what data the customer needs. You’ve got talk to customers. And don’t think of information as the product itself: The product has to be what we call a “workflow solution,” which incorporates all types of content into a single source that can be accessed from any number of search parameters.
S+B: Why is a database by itself no longer a sufficient business model?
PROZES: Pieces of information on their own don’t solve problems or get work done anymore. You need a process for culling the information and putting it together in ways that make sense for your customer’s individual project, case, or specific business. When I’m at cocktail parties and I mention LexisNexis, people think of the legal database or the database of news and periodical stories, but we are a lot more than that.
An example would be the case of an intellectual-property attorney who has to file a patent. Not so long ago his search would have been limited by the lack of available databases, and browsing through a single patent database typically would have had to suffice. Today, we allow him not only to easily complete the search for similar and possibly competing patents but also to collect pertinent background information about similar patents, the patent holders, and the legal claims that have been made. In other words, in one search he can prepare much of the documentation that he will need either to apply for the patent or to defend it later.