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JANUARY 23, 2001 COMPANY CLOSEUP By Norm Alster Is OneSource the "One-Stop Shop" for Company Info? Drawing from more than 2,000 public resources and a big database, the Web service aims to be the ultimate reference on companies -- especially private tech
Oddest of all, OneSource actually makes money by selling access to financial and other corporate information, much of it widely available for free on other sites such as Yahoo! and CBS MarketWatch. What's OneSource's edge? It does more number-crunching than other sites, puts all the info within easy reach on its Web site, www.onesource.com, and posts its own research on private companies that don't have to tell the public anything. "The fact that OneSource puts it all together is of huge value," says Paul Hoff, senior manager of market development for Cupertino (Calif.)'s Portal Software, which develops billing software for Internet service firms. In the past, Portal would have had to purchase access to a number of databases to be able to collect the same information. In addition to combining public and private company data, OneSource offers detailed listings of potential Portal customers in seven specific industry sectors, including ISPs, Web hosters, and wireless-data services. This helps Portal develop screens for potential customers, based on types of business, geography, financial profile, and other parameters. BEYOND SNAPSHOTS. OneSource integrates business information from more than 2,000 sources -- everything from local press and trade journals to Dun & Bradstreet and Who's Who -- to create its detailed corporate profiles. Business Browser, its prime Web product, goes well beyond the quote and earnings data available on many free Web sites. Its company profiles include, for example, a listing of all corporate facilities worldwide and the number of employees at each site. It maps corporate managers down to the director level and below. And its value-added number crunching offers such nuggets as receivable turnover -- the average number of days it takes to get paid -- and compares performance within industries. That's for public companies. But OneSource's most valuable database may be the one it has built internally over the years: detailed profiles of 50,000 private high-tech companies. More than simple snapshots, these profiles include detailed descriptions of businesses, product lines, and key technologies. OneSource also offers detailed listings of executives and managers, and provides revenue and head-count data that it obtains through interviews with executives and managers at these companies. Says Schimmel: "[This data is] hard to find. These companies are some of the most interesting and dynamic in the U.S. and don't have reporting requirements. There is a real appetite to find out what these companies are doing." More than 800 corporate customers have signed up for the service, paying an average of $67,000 a year for password access to the data. Some customers with thousands of licensed users pay as much as $1.5 million a year, says Schimmel. In the quarter ended Sept. 30, OneSource reported $636,000 in earnings on $13.7 million in sales. Schimmel says this is no fluke: "We know we're going to be in the black. We have a very predictable business model." Analysts back that up. Steve Frankel of Adams, Harkness & Hill, a boutique investment bank in Boston, projects roughly 35% revenue and earnings growth over the next three or four years. "I definitely think this is a diamond in the rough," he says. LACKLUSTER IPO. Plenty of customers share that opinion. They cite range of information and ease of use as major advantages of OneSource's service. Bain & Co., a Boston-based consulting firm, holds an enterprise-wide license from OneSource, making the service available to its 2,000 consultants. Toby Pearlstein, director of information services at Bain, describes OneSource as a "one-stop shop" for the global corporate financial data that consultants use to quickly get up to speed on a new client or industry. Especially valuable are the executive biographies, industry overviews, and global corporate profiles, both public and private. "All of that stuff in one package is very beneficial," she says. But Bain uses other information services as well, including news database Lexis Nexis, because OneSource doesn't have a "huge amount of depth" in its periodical coverage, says Pearlstein. As part of Lotus, OneSource delivered information to financial professionals on CD-ROM. In 1996, it began its transition to Internet delivery. Whereas many e-tailers and content sites pursued an eyeballs-at-all-cost strategy to lure Web surfers and advertisers, OneSource plodded along, building a useful subscription service for a targeted market of sales professionals, bankers, consultants, and mergers-and-acquisitions prowlers. What makes this all the more impressive is that OneSource has flourished without access to huge wads of venture capital or IPO cash. Indeed, a May, 1999, IPO, priced at $12 a share, raised net proceeds of just under $27 million. "On the surface, we suffered. We could have positioned ourselves as a dot-com and benefited more from the runup," says Schimmel. On the other hand, easy money has a way of disappearing. "We would have raised more money and spent more money," Schimmel reflects. OneSource stock recently traded at just under $9, off a 52-week high of roughly $14. Schimmel believes that OneSource can expand its penetration among the world's 10,000 largest corporations by focusing on business-to-business sales forces. Analyst Frankel agrees, saying the existing customer base is underpenetrated. "There are very few accounts where they're maxed out," he says, noting that customers are likely to add password accounts over time. So for many, OneSource could become the only source for valuable data.  Norm Alster covers technology for BusinessWeek in Boston Get BusinessWeek directly on your desktop with our RSS feeds.  Add BusinessWeek news to your Web site with our headline feed. Click to buy an e-print or reprint of a BusinessWeek or BusinessWeek Online story or video. To subscribe online to BusinessWeek magazine, please click here. Learn more, go to the BusinessWeekOnline home page  | | JANUARY |
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