Innodata Isogen, Inc. 

THREE UNIVERSITY PLAZA
HACKENSACK, NEW JERSEY 07601
(201) 488-1200

www.innodata-isogen.com

Sales

$37 million

Business Description

 Innodata Isogen, Inc., formerly known as Innodata Corporation, improves
the way companies create, manage and distribute information - helping them
reduce content-related costs, achieve better outcomes and compete more
effectively in demanding global markets.

Our solutions encompass both the manufacture of content (for which we
provide services such as digitization, imaging, data conversion, XML and markup
services, metadata creation, advanced classification services, editorial and
knowledge services) as well as the design, implementation, integration and
deployment of the systems used to manage content (for which we provide custom
application development, consulting and training.)

We serve leading organizations in four content-rich segments: (1)
publishing, media and information services, (2) culture and education, (3)
government and (4) global enterprise - including Global 2000 companies across
more than a dozen sectors, such as aerospace, defense, engineering, financial
services, e-commerce, healthcare, information technology, intelligence,
manufacturing, pharmaceuticals, retail and telecommunications.

We have more than a hundred active clients, including Amazon.com, Reed
Elsevier, Thomson, Wolters Kluwer, EBSCO, ProQuest, Simon & Schuster, McGraw
Hill, Derwent Information, John Wiley & Sons, Lockheed Martin, Hamilton
Sunstrand, Primerica, CAB International and the Smithsonian Institution.

We typically service these clients in multi-year relationships. In 2003,
more than 90 percent of our revenue was derived from clients that used our
services for more than one year, and more than 80 percent of our revenue was
derived from clients that used our services for more than two years.

THE CONTENT SUPPLY CHAIN

Our wide range of content-related offerings is organized in a clear
conceptual framework - the content supply chain. A content supply chain is the
series of integrated activities necessary to create, manage and distribute
information products.

Another way to describe the content supply chain is the business process
that transforms ideas into actual information products. This business process is
the strategic focus of our company at present.

Innodata Isogen optimizes content supply chains. Our clients can choose
from an array of point solutions or deploy an integrated set of services - or
they can simply outsource their entire content supply chain to us to maximize
the value of their operational dollars.

Each client we serve makes a distinct set of demands on content. Each has
different objectives. Each, therefore, has somewhat distinct challenges in its
content supply chain.

For instance, many of our publishing clients are under enormous
competitive pressure to cut costs, while at the same time, manufacturing and
marketing information products with enhanced features, functionality and quality
in rapid response to market conditions.

In the wider enterprise arena, requirements for greater and more accurate
technical, product and regulatory documentation are increasing. The result is
that the burden of content creation, management and distribution is also
growing. These spiraling costs multiply further as global enterprises broach new
nations, markets and cultures, and these costs come right out of a company's
bottom line.

At the same time, major cultural and educational institutions, as well as
a number of important government agencies, are seeking new and better ways of
leveraging vast stores of aggregated content to fulfill their respective
missions - even as greater demands are being placed on their limited human,
technical and financial resources.

Whether a client uses content to support products and services (as in the
case of equipment manufacturers), or sells content as the basis of a business
model (as in the case of publishers), we can help them realize significant cost
savings and greater productivity, maintain or improve content quality, and
achieve better overall outcomes.

BASIC STRUCTURE OF OPERATIONS

We have two main operating units: content services and professional
services. (We formerly referred to the professional services unit as systems and
training services).

In addition to providing sophisticated content creation and editorial
services (such as indexing & abstracting), the content services unit collects,
processes, digitizes and encodes large volumes of content. The content services
unit also transforms content to Extensible Markup Language (XML), creating large
XML-compliant content repositories for single-source publishing and other
activities.

Our largest XML production facility, the XML Content Factory in the
Philippines, is the largest known purpose-built for the manufacture of XML
content.

The professional services unit designs and builds powerful XML-based
content management and publishing systems, and provides data modeling, systems
integration, custom application development and consulting services.

Professional services also instructs both front-line technologists and
their executive managers on structured information standards (such as XML) and
their larger implications for business systems.

CONTENT SERVICES

At present, the conversion of hardcopy and paper collections and
legacy-formatted electronic data to a variety of output formats - including XML
other related markup standards - is an important part of our overall offerings.

For this purpose, we use high-speed scanning; a variety of commercial and
proprietary OCR/ICR (optical/intelligent character recognition) applications;
structured workflow processes; and proprietary applications and tools (including
custom filters and parsers) designed to create accurate, consistent markup and
data. We use proprietary technology for data enhancement and validation, and
create automated procedures - utilizing industry standards-compliant software
tools to ensure validated SGML and XML markup.

Another important offering is knowledge services. We employ hundreds of
highly educated subject matter experts in fields such as law, finance,
education, science, medicine, and engineering. They provide content development
and enhancement, taxonomy and controlled vocabulary development, hyperlinking,
tagging, indexing and abstracting and general editorial services. We typically
price these services on a resource-utilization basis or quantity-delivered
basis.

An increasing number of publishing organizations are migrating to
XML-based, single-source publishing systems, creating a single content
repository from which to create multiple information products (as opposed to
having to build a separate data store for each information product) to save time
and money.

What's more, publishers who maintain their content in XML can syndicate
content and spontaneously synthesize content for interactive Web services. XML
content transformation is the prerequisite for content owners to accomplish
these outcomes.

To transform content to XML, tags are inserted within the content to give
the content context and meaning that computers can process. Our proprietary
technology includes production-grade, auto-tagging applications that utilize
pattern recognition algorithms based on comprehensive rule sets and heuristic
online databases. This technology enables mass creation or conversion of XML
content from complex, unstructured information.

We also translate desktop publishing documents (QuarkXPress, PDF, MS Word,
etc.) to XML variants, from which we generate a variety of file formats (HTML,
OeB, PDF, proprietary eBook formats, etc.) to support multiple channels of
distribution. We typically price these services based on units of data produced
or transformed.

Underlying all content services activities is a sophisticated information
technology and communications infrastructure, which enables multiple production
processes to be performed simultaneously across any number of our production
facilities.

We use server-based information technology to operate through a structured
workflow using advanced tools. We drive efficiency and quality by using advanced
manufacturing and management techniques including total quality management and
statistical process control.


PROFESSIONAL SERVICES (FORMERLY SYSTEMS AND TRAINING SERVICES)

Clients who use our professional services typically require publishing,
performance support or process automation systems that enable multiple authors
to collaborate on content and enable multiple products to be generated from
single-source XML repositories.

We design and build these powerful XML-based systems, and provide
full-service consulting and systems integration services to configure, improve,
and validate these and other software systems and technologies. Services are
provided in accordance with ISO, IEC, ANSI, IETF, and W3C standards.

We deliver sophisticated classification services, using topic maps,
taxonomies and ontologies, and provide clients training in the associated tools
and methodologies. We also provide clients with professional training,
courseware and continuing education in XML and other structured information
standards.

In addition, our professional services division fields skilled process
analysts, workflow architects and project managers, which enables us to offer
our clients the opportunity to not only outsource operations, but also to
transform and enhance them. This enables our clients to achieve even greater
value from outsourcing, and is often referred to as business transformation
outsourcing.

We typically price professional services on either an hourly basis for
actual time and expense incurred, or on a fixed-fee, turnkey basis. Revenue for
services billed under fixed-fee arrangements is recognized using the
percentage-of-completion method under contract accounting as services are
performed or output milestones are reached. The percentage completed is measured
either by the percentage of labor hours incurred to date in relation to
estimated total labor hours or in consideration of achievement of certain output
milestones, depending on the specific nature of each contract. Revenue for
contracts billed on a time and materials basis is recognized as services are
performed.