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David Vs. Goliaths On The Infobahn


Information Processing

DAVID VS. GOLIATHS ON THE INFOBAHN

In a way, the Information Superhighway has existed for Corporate America for years. On-line services such as Mead Data Central's Nexis, Knight-Ridder's Dialog, and Dow Jones's Business Information Services have been pumping out the data on customers, competitors, and markets that businesses prize. The problem is, the Highway has been an expensive toll road--typically $100 or more per hour--that ends abruptly at a corporation's library or "information center" because these services are often too complex for ordinary managers to use. The result: While revenues of consumer on-line networks is soaring at 26% this year, the $950 million market for business services is growing less than 10% annually, says Simba Information Inc. in Wilton, Conn.

If there were a way to get the hordes of executives, managers, researchers, and marketers who use the information on line themselves, the market might just take off. "Everybody knows there's a massive market out there," says Barbara E. Quint, president of consultants Quint & Associates in Medford, N.J.

MAJOR PLAYER. DataTimes, now a distant fourth in the market, thinks it has technology--new software called EyeQ--that will open the floodgates and make the Oklahoma City-based service a major player. Written to run on Microsoft Corp.'s Windows operating system, the software has the same point-and-click ease of use as other Windows applications that managers might be familiar with. To get information, managers merely fill in boxes marked "who," "what," "where," and "when."

More important, DataTimes will appeal to cost-conscious companies by doing away with the typical complicated billing policies. DataTimes will charge a flat $39 a month and $3 for most documents, a scheme that will save its customers an average of 30% per month. Says DataTimes Chief Executive Officer Allen W. Paschal: "From this point forward, we're moving to dominate the on-line business-information industry."

Big talk from a small company? Perhaps. But such talk has won big backing from Oklahoma Publishing Co. and its 78-year-old media-mogul chief, Edward L. Gaylord. With an empire that includes various newspapers, cable-TV networks, sports teams, and the Opryland resort, Gaylord bought DataTimes in 1984 after Paschal--a boyhood friend of Gaylord's son--installed the electronic library at his beloved Daily Oklahoman.

Analysts say that to launch DataTimes' bid for the big time, Gaylord will have to spend on the order of $30 million for advertising and bringing the desktop software for EyeQ into computer stores. That's in addition to the undisclosed amount spent to repurchase a 15% stake in DataTimes that was traded to Dow Jones & Co. in 1988 for use of the giant publisher's mainframe network. And now, DataTimes is rushing to bring up its own network of Unix servers and PCs in time for the Jan. 1 rollout of EyeQ. "We're prepared to go into the red on this," says Edward King Gaylord II, 37, the heir apparent of Oklahoma Publishing and chairman of DataTimes. "But it'll be very short-term losses if this comes off right."

Customers briefed on EyeQ say it seems promising. "We're trying to make users as independent as they want to be," says Carol L. Ginsburg, vice-president for information services at Bankers Trust Co. "And this sounds like a lot of information for a little bit of money."

Not that DataTimes is a shoo-in. It has a limited portfolio: 28 million articles vs. Dialog's 330 million, and will no longer feature the Wall St. Journal because of chilled relations with Dow Jones. And many rivals suggest the world simply isn't ready for a mass-market approach. "Nobody has a sense of when the infrastructure will be there to make tapping end-users just a marketing problem," says Gregory P. Gerdy, director of enterprise products for Dow Jones. "Once that happens, things will get very interesting."

Clearly. But by then, it may be too late for marginal players. Next year, Reuters NewMedia plans a similar push with its $450 per month Reuters Business Briefing. And with consolidation running rampant, even large players are not safe. Dialog was purchased by newspaper publisher Knight-Ridder in 1988, Mead by media giant Reed Elsevier in October, and Ziff Communications' Information Access by Thomson also in October. Indeed, the younger Gaylord says that DataTimes has already been approached by Reuters and Dow Jones. But that's life on the edge of the Info Highway. DataTimes: An Unlikely Giant-Slayer

1993 1994

COMPANY PARENT REVENUES REVENUES

MILLIONS MILLIONS

DIALOG Knight-Ridder $243 $280

LEXIS/NEXIS Mead Data Central 551 606

BUSINESS INFORMATION Dow Jones 86 99

SERVICES

DATATIMES Oklahoma Publishing 21 30

DATA: DIGITAL INFORMATION GROUP

Peter Burrows in Dallas


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