Given Reed Elsevier’s position in the information business, I’m not surprised their US arm LexisNexis is suing philanthropist and database guru Hank Asher.
Right or wrong, Reed Elsevier would like to hold on to every bit of the market share they have. As of this past year, the LexisNexis division provides over one-third of their revenues by division and almost 40% of their profit by division (this is available on their site and if I recall correctly, the LexisNexis division provides the largest share of revenue).
My second guess is that the Elsevier division, with over 2,000 publications, is going to realize a decline in its revenues due to the open access movement.
The Open Access movement, powered by the email and web portions of the internet, offers researchers peer-review, publication and access to papers. For Science and Medicine research institutions, these three things are important. Peer-review, publication and access to other research papers drive science.
Obtaining money for your school or lab is what “publish or perish” is all about. You get published by having your research “peer reviewed” and judged solid and acceptable. You get money by having a reputation for good, solid research and good grant-writing skills.
Open access publishers offer peer review, publication and access to research papers. Biomedcentral.com is the shining example of an open access publisher.
So, unless the Elsevier division of Reed Elsevier adopts a different business model (along the lines of open access), I don’t see that revenue stream surviving for long into the future. And having read the 2004 UK Parliament’s minutes of an inquiry into publications (where Reed Elsevier execs were called as witnesses), they’re hanging on for all it’s worth.
Elsevier has another problem now. The integrity of their publications has been called into question given the revelation that they took money from Merck (the pharmaceutical company) to re-publish previous research on Voixx – Merck’s defunct product that was pulled globally in 2004 – as a new journal without disclosing the fact that Merck paid for the compilation.
THAT is bad science and has tarnished their reputation; instead of a reliable information company, their sin of omission makes them look like a misinformation company. Only time will tell if their bottomline suffers from this gaff.
But public records, identity theft protection and better law enforcement… there is a lucrative business. And Hank Asher is a proven player in this market (he practically created the market).
In the sale of Seisint to LexisNexis in 2004, Hank Asher signed a 5 year Non-Compete Agreement which expires this Fall.
Not too long ago he leased a fortress in Boca. Ads for jobs with his name in the ads are online. He’s making news again here in the local papers.
Do you think LexisNexis and Reed Elsevier are a bit worried?
Of course!
And what better way to hang on to their market share than a pre-emptive 800 pound gorilla strike at the man who has the brains and means to take it from them?
Like I say on my blog: Go Hank, Go!
[This post was created in response to a PracticeSource.com post. Unfortunately, their blog is set up to truncate comments and, well, as you can see, this was bit lengthy.]
