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The Thomson Corporation- Information Services -
Category Directory
416-360-8700
66
Wellington Street West
Toronto, Ontario M5K 1A
Canada
www.thomson.com
Sales
$7.6
billion
Business Description
We
are a global leader in providing integrated information solutions to
business and professional customers. We generate revenues by supplying our
customers with business-critical information from multiple Thomson and third
party databases and further enhance the value of that information with
analysis, insight and commentary. To enhance the speed and accessibility of
information for our customers, we increasingly deliver information and
services electronically. As we increasingly integrate critical information
with analysis, tools and applications, we place greater focus on the way our
customers use our content, rather than simply on selling the content itself.
We serve customers principally in the following sectors: law, tax,
accounting, higher education, reference information, corporate training and
assessment, financial services, scientific research and healthcare. We
believe these sectors are fundamental to economic development globally and
consequently have the greatest potential for consistent long-term growth.
We have a leading market position and well recognized and respected brands
in each of our principal markets. Our revenues in 2003 totaled $7.6 billion
and we derived approximately 64% of our revenues from sales of
subscription-based products, 34% from other products and only 2% from
advertising. In 2003, we derived 81% of our revenues from our operations in
North America.
We have the flexibility to deliver our products and services to our
customers electronically in a variety of ways, including over the Internet
and our own proprietary platforms. As a result, our products and services
are readily integrated into the systems of our customers. By expanding
electronic delivery of our products and services, which can generally be
done at lower variable costs than those that are print-based, we believe
that we will generate revenue growth and expand our profit margins. In 2003,
we derived 55% of our revenues from products and services delivered
electronically.
Corporate Center and Market Groups
Our corporate center initiates and executes strategy and manages other
company-wide functions. We organize our operations in four market groups
that are structured on the basis of the customers they serve:
Thomson Legal & Regulatory;
Thomson Learning;
Thomson Financial; and
Thomson Scientific & Healthcare.
By centralizing key functions in our corporate center, we foster a
company-wide approach while allowing our market groups sufficient
operational flexibility and scope for initiative in dealing with customers.
In addition to identifying new business opportunities and acquisitions, our
corporate center oversees the planning processes of our market groups and
their implementation of strategy and assesses their performance. Our
corporate center develops and executes capital strategy, including tax
planning, and determines the overall direction on technology. In addition,
our corporate center has the responsibility for the appointment of senior
executives and their training and development.
Thomson Legal & Regulatory
Our legal and regulatory group is a leading provider of integrated
information solutions to legal, tax, accounting, intellectual property,
compliance and other business professionals, as well as government agencies.
We offer a broad range of products and services that utilize our electronic
databases of legal, regulatory and business information and news. Our
offerings also include non-content based products and services, such as
software to assist lawyers and accountants with practice management
functions, including document management, case management, and other back
office functions, and software that assists tax professionals with preparing
and filing tax returns. We also offer Internet-accessible legal directories
to assist our customers in their client development initiatives and
continuing legal educational programs. In 2003, we provided products and
services to each of the 100 largest law firms in the world and our databases
are some of the largest in the world.
Markets
As the economy becomes increasingly global, the demand for legal and
regulatory information on an integrated global and regional basis is
increasing. Customers are requiring a broader array of interlinked products
and services to meet their varied informational, operational and marketing
needs. Increasingly, customers prefer their information needs to be met by a
primary strategic partner as opposed to multiple providers to ensure
consistency. Our estimates indicate that the market for legal and regulatory
information in most developed countries is relatively stable and we expect
average annual revenue growth rates in the future to correlate with each
country's gross domestic product growth. However, we estimate the demand for
practice management and tax software and client development services is
growing at a rate approximately twice the gross domestic product. Although
slowing somewhat, consolidation has occurred among a number of our
customers, most notably law firms.
Technology continues to affect the market for legal and regulatory
information. The availability and reliability of the Internet and the demand
for faster access to information has significantly increased the demand for
products and services online. In addition, the Internet has made it much
easier to both deliver and receive information and services. As a result, we
believe that customers will continue to migrate from print and CDs to online
offerings in the future.
Competitive differentiation in the market for legal and regulatory products
is becoming increasingly difficult to demonstrate through traditional means,
such as content and reliability. We believe that value-added products and
services are increasingly becoming the point of competitive differentiation.
In addition, brands are becoming increasingly important as customers
associate them with value.
Online business information and news services supply a variety of current
and archival business information and news to professionals in a wide
variety of areas such as marketing, strategic planning, business development
and research and development. According to our estimates, the global market
for business information and news was negatively impacted by the recent
economic downturn, resulting in a decline in 2003. In the second half of
2003, we began to see signs that this market was improving. If economic
conditions continue to improve in 2004, we expect a modest recovery in the
demand for business information and news.
Operations
Legal
Based primarily on our West business, we are the leading provider in the
United States of legal information-based products and services. We provide
integrated information solutions to virtually every large law firm,
significant government institution and law school in the United States and
to small and medium-sized law firms and corporate in-house legal
professionals. Our information includes case law, statutes, administrative
material, law reviews and treatises, lawyer profiles, legal commentary,
public records and legal forms, in electronic and print formats. We offered
our customers access to over 19,000 databases as of December 31, 2003.
Our West business publishes cases, statutes and other legal information and
enhances them with headnotes, synopses, key numbers and other editorial
enhancements prepared by our staff of lawyers and editorial professionals.
These editorial enhancements facilitate more productive researching by our
customers.
We also operate legal information businesses in Canada, the United Kingdom,
Germany, Denmark, France, Ireland, the Netherlands, Spain, Sweden,
Australia, Hong Kong, New Zealand, Brazil and Argentina through local
operations and in Switzerland through a joint venture. Through these
businesses, we provide a range of primary materials such as case law and
statutes and secondary materials, including treatises and legal commentary
specific to the countries in which we operate.
Westlaw is our primary online delivery platform. Westlaw offers numerous
search features and navigation tools that enable our customers to search
databases that are relevant to them to research points of law, build tables
of authorities or search for other topically related commentary. Using
mywestlaw.com, our customers can customize Westlaw by focusing on specific
jurisdictions or practice areas. Our offering of mywestlaw.com, together
with increased use of the Internet, has allowed us to further penetrate the
market for smaller and specialized law firms. In 2003, we introduced Westlaw
Litigator, a service designed to assist attorneys in evaluating and
investigating cases and preparing for trial. Through Westlaw, we also offer
KeyCite, an online citation research service that, among other things,
enables our customers to trace the history of a case, statute,
administrative decision or regulation to determine if it is still
authoritative, retrieve a list of cases that cite a particular case or
compile a table of authorities.
Westlaw UK, launched in 2000, offers a combination of legal information from
the United Kingdom and the European Union that we derive from our legal
publishing businesses in those jurisdictions, together with information
licensed from third parties, such as business information and news from
Factiva. Customers may also access, on a transactional basis, legal and
regulatory information from West in the United States and our other
businesses such as Dialog, our global online provider of business
information and news. In 2002, we acquired Lawtel, the leading U.K. online
current awareness and legal information service. As a result of the
continued growth of Westlaw and Lawtel, 98 of the largest 100 U.K. law firms
subscribed to our online services in 2003.
In addition, we offer country-specific online services in Argentina,
Australia, Canada, Denmark, Germany, Hong Kong, Spain, Sweden and the United
Kingdom. In each case, we offer local content, owned or licensed by our
operations in that region, and supplemented with relevant information from
other regions of the world such as our databases of European Council
directives maintained by our ELLIS business unit. Westlaw DE, based in
Germany, was successfully launched in April 2003 and offers comprehensive
coverage of German and European legal information.
In addition to launching customized online services in various countries, we
also provide a basic Westlaw service, known as Westlaw International.
Through Westlaw International, we are able to offer our current online
products and services to customers in markets where we may not have an
existing publishing presence or have not yet developed a fully customized
Westlaw service. As of December 31, 2003, we provided Westlaw International
in 27 countries.
Elite Information Group, which we acquired in 2003, offers software that
assists law firms and government agencies of all sizes with front and back
office management functions, including document management, case management,
general ledger accounting, billing and records management. We have
integrated Elite with our ProLaw, Westkm and Law Manager businesses to offer
a broad legal software suite of products. While our software customers are
primarily based in the United States, Elite is expanding internationally.
Our FindLaw business offers client development services in the United States
that include legal directories, legal news, a legal career center and other
legal resources. FindLaw charges law firms a fee to be included in its
online legal directories but users may search its legal directories and
other products and services free of charge. FindLaw provided website design
and hosting services to more than 6,400 law firms in 2003.
Our West Education Group is a leading provider of educational solutions to
legal professionals and law students in the United States. Through BAR/BRI,
we provide bar examination review courses and materials. We also have a
legal textbook publishing business with over 1,400 titles in 2003, making us
a leading provider of casebooks and other learning materials to law students
in the United States. Our West LegalEdCenter, which we launched in 2001,
provides online continuing legal education materials and offers one of the
largest selections of video and audio continuing legal education programs on
the Internet, including more than 9,000 hours of accredited content as of
December 31, 2003 to legal professionals across the U.S.
Tax and Accounting
We provide tax and accounting professionals with regulatory information and
software to assist them in their daily work. Our tax and accounting
information is available in both print and electronic formats. Our online
tax product, Checkpoint, provides our customers with increased speed of
service and the flexibility to link to a broad collection of databases. We
continue to add additional content and embedded tools in this area. As a
result of these initiatives, Checkpoint's subscriber base increased
approximately 22% in 2003 compared to 2002. We are one of the leading online
suppliers of tax and accounting information in the U.S.
Through Creative Solutions, we offer software products that perform payroll,
write-up, bookkeeping, audit and practice management functions and enable
our customers to interact with their clients through the Internet. In
addition, we offer tax accounting software known as UltraTax that assists
our customers in the preparation of tax returns and enables them to file tax
returns electronically. Through our Fast-Tax Trust Services business, we
provide our customers with a specialized range of products for managing
trust accounting, from tax preparation software to complete tax preparation
services. Our tax and accounting business is currently focused on developing
integrated research and workflow solutions utilizing products from our
software business and our information businesses to create a broader
offering to tax and accounting professionals.
While our tax and accounting customers are primarily in the United States,
we also sell our products internationally on a limited basis through both
our RIA business and other Thomson companies, including IOB, the leading
provider of tax information in Brazil.
Business Information & News and Trademarks
We provide business information and news to business professionals,
scientists and consultants. Major Brands include:
Dialog
NewsEdge
Profound
DataStar
Dialog provides business information and news to a wide range of customers
of all our market groups, including business, science, engineering,
financial and legal professionals. Dialog primarily licenses data from third
parties and derived data from more than 200,000 sources as of December 31,
2003, such as publicly filed documents, industry literature and trade
journals. This makes the Dialog database one of the largest of its kind in
the world. Dialog and its affiliates allow our customers to identify current
information on particular topics and search our archival databases for
information on particular topics to assist in their research activities.
As of December 31, 2003, Dialog provided business information and news
services to more than 25,000 corporate customers and more than 100,000
professional researchers, and in 2003 was accessed by over two million
end-users worldwide.
Through Dialog, we are offering content from our other market groups, such
as patent information from Derwent in our scientific and healthcare group
and reference information from Gale in our learning group. To support this
initiative, we are migrating Dialog's content to our Novus online platform
so we can accelerate new products to market and make this content compatible
with Westlaw's value-added information. We believe this will improve our
ability to offer content from our other market groups through Dialog and to
combine Dialog with our other online services.
We also provide trademark search and information services to business, law
and trademark professionals. Through Thomson & Thomson, Compu-Mark and
Brandy, a Japanese joint venture, we maintain databases containing all
current trademark registrations in the United States, Japan, Malaysia,
Singapore, Canada and most European countries. We also offer a wide range of
products and services that cover all aspects of developing and protecting
trademarks, including enabling customers to screen them, determine their
availability, protect them from infringement and search domain names.
Technology
In our legal and regulatory group, we maintain a sophisticated electronic
infrastructure and highly developed online systems and support capabilities
to provide our customers with products and services primarily through the
Internet. In particular, as of December 31, 2003, we maintained three
primary data centers with several thousand servers that have the capacity to
handle over 25 million transactions per day. We have successfully developed
and are implementing Novus, the next generation of our online delivery
platform, which utilizes new and highly scalable technologies resulting in
significantly enhanced capabilities. This platform allows us to more easily
combine content from our various online services, reduce product delivery
costs and reduce development time for new products and services. We continue
to significantly upgrade and standardize our applications and
infrastructure, enabling us to enhance our ability to market and sell our
products over the Internet.
Competition
Our primary global competitors in the legal and regulatory information
market are Reed Elsevier and Wolters Kluwer, with whom we compete in the
United States and in most of the other countries in which we operate. Our
major competitors continued to pursue acquisitions in 2003, primarily in
North America and Europe, albeit at a slower pace than recent history. We
also compete with other domestic competitors in the United States and in our
international markets for legal and regulatory information, practice
management software and client development services.
In the business information and news market, we compete with other business
information and news aggregators, the most significant being Factiva (a
joint venture between Reuters and Dow Jones) and Nexis (a business of Reed
Elsevier). In addition, we compete with Ovid Technologies (a subsidiary of
Wolters Kluwer), STN International and other smaller companies that focus on
specific segments of the business information and news market.
Thomson Learning
Our learning group is a leading provider of tailored learning solutions to
colleges, universities, professors, students, libraries, reference centers,
government agencies, corporations and professionals. We help our customers
find the learning resources they need, learn using print and electronic
resources and measure their learning success.
• Our academic publishing and reference businesses provide textbooks and
related learning products used in colleges and universities, together with a
broad range of online and print-based reference materials used in libraries,
reference centers, schools, colleges, universities and corporations.
• Our lifelong learning businesses provide electronic and print-based
training, career education, vocational learning and testing and
certification programs and materials to corporations, government agencies,
universities, vocational schools, teachers and students.
We participate primarily in the higher education, library reference and
corporate training and testing market segments. While printed materials
continue to be the most widely used learning resource, instructors and
students are increasingly seeking electronic resources. With the shift to
electronic resources, scale and operating efficiency are becoming
increasingly important and, accordingly, significant investments need to be
made in technology, marketing and distribution.
We believe that the higher education segment has long-term growth potential,
as education has become a lifelong pursuit. The higher education segment is
less cyclical than the primary and secondary school segment because it does
not rely on public school districts to adopt textbooks and other learning
materials and is less exposed to government-related budget constraints.
However, while post-secondary education enrollment continues to increase,
many public post-secondary institutions are now dealing with cutbacks in
state and local government support. While those cuts are not affecting the
demand for education, the underlying economic conditions have led to further
tuition increases and a reduction in some course offerings. Those conditions
have made students more sensitive about textbook prices, leading in some
cases to reduced textbook sales. The higher education market is also less
capital intensive because publishers in this market are not required, as in
the primary and secondary school market, to invest funds for book
development prior to receiving a commitment from state education bodies that
their books will be adopted and purchased.
The library reference market has high electronic information adoption rates
and its electronic information can be easily combined with higher education
products and services. Recent state government cutbacks have also
significantly reduced the amounts spent by libraries on reference materials.
These cuts have resulted in an accelerated migration of collections to
electronic products, and many libraries that had in the past purchased
materials in both print and electronic formats are now choosing to purchase
in electronic format only.
We believe the corporate e-training and e-testing markets have strong growth
potential due to high electronic information adoption rates, the cost and
time efficiencies of digital delivery and the increasing importance that
companies are placing on utilizing corporate training and testing products
to improve the skills of their employees. For these and other reasons,
businesses are increasingly outsourcing training and are shifting spending
from instructor or classroom-led to technology-based training. However, the
corporate training and testing market can be, and recently has been,
affected by changes in the general economy as training budgets are often
reduced in an economic downturn. Smaller companies that have traditionally
serviced this market are facing increasing pressure to consolidate as
customers are demanding training solutions that combine traditional training
products with electronic products and validation of training programs.
Customers are also increasingly addressing training on an enterprise-wide
basis and in some cases on a global basis.
Operations
Academic Publishing and Reference
We provide textbooks, study guides and teaching guides in print and
electronic formats for use in colleges and universities and electronic,
print and microfilm reference materials for libraries, reference centers,
schools, colleges, universities and corporations. We supplement our
major textbooks with electronic teaching aids, such as online interactive
supplements and websites. We publish in selected disciplines that we believe
offer the highest long-term growth and where we have or believe we can
attain substantial market share, such as in the humanities, social sciences,
languages, science, mathematics, business and economics fields. We create
proprietary reference material, aggregate periodical content and primary
source research information and integrate this information into a broad
array of sophisticated online reference libraries. We also maintain academic
microfilm collections that we provide to our library customers.
Experts in the relevant disciplines author our textbooks and learning
materials. We contract with our authors under long-term royalty
arrangements. The authors work with our editors to prepare the original
materials for new editions, revised editions and teaching supplements. The
depth and breadth of our product offerings allow us to manage the release
dates of major textbook titles so that revenues from new product releases
are spread more predictably from year to year.
We are currently digitizing our microfilm collection and include this
content in some of our electronic products. In particular, Gale's Eighteenth
Century Collections Online features electronic access to approximately
150,000 printed works from across a number of academic disciplines. With
full-text search capabilities across all 33 million pages, this collection
provides a new way to conduct multi-disciplinary research.
We also provide electronic resource centers that aggregate reference
information about particular topics. The Gale Resource Centers are devoted
to topics such as literature, history, business, biography and health. With
a single search using Gale's InfoTrac service, customers worldwide are able
to access online journals through Gale and Ingenta. We are also extending
our reference business into new markets by providing supplements to core
curricula taught in primary and secondary schools and expanding the
distribution of reference products in the international and primary and
secondary school library markets.
In 2003, we began providing customized lessons and exercises for college
entrance exams through Peterson's Test Prep. These online courses are the
next generation of test preparation with no two students receiving the same
course. Using our technology, we have the capability to design a different
course that is customized to each individual's strengths, weaknesses and
scoring goals.
While our principal market is the United States, we also distribute our
publishing and reference products internationally. In 2003, approximately
60% of the revenues that we earned from international sales of our academic
publishing products and services were attributable to content created in
local markets. We also adapt textbooks and learning materials created for
the U.S. market for sales abroad by, where necessary, translating them and
supplementing them with local content. In the international markets, we
distribute our higher education products and services primarily to
universities, colleges, schools and reference libraries.
Lifelong Learning
We provide electronic and print-based training, certification and testing
solutions to corporations, government agencies, students and professionals.
We also offer textbooks, study guides and teaching guides, in print and
electronic formats, to technical and vocational schools, trade associations,
professors, students and professionals. We offer our information technology
and business skills training products and services to corporate information
technology departments and corporate training departments and government
agencies worldwide.
One of the strengths of our training and testing business is the breadth of
our offerings. As of December 31, 2003, we maintained a repository of more
than 85,000 electronic learning objects, which are self-contained
instruction modules to teach specific skills primarily focused on
information technology and business, and more than 3,000 e-learning courses.
These learning objects are used to create flexible and personalized training
programs tailored to the needs of students. We also offer textbooks,
teaching guides, study guides and practice tests to professionals who are
seeking to maintain or upgrade their credentials and to professors and
students in degree-granting technical and vocational schools. We create our
offerings for a wide variety of disciplines, including administration,
automotive, computer-assisted drafting, cosmetology, education, electronics,
fire rescue, healthcare, security, travel and other trades.
In 2003, our Prometric business delivered approximately six million
computer-based exams in over 130 countries. In 2003, we generated revenues
for our testing business from IT certification tests, professional
certification tests, such as tests for investment brokers, certified public
accountants, and medical doctors, academic tests, such as graduate record
exams and tests of English as a foreign language, government tests and
pre-employment assessments for corporations.
We are focused on enhancing our ability to provide comprehensive "must-have"
training solutions for corporate and government customers. In particular, we
are creating training solutions that are mandatory to maintain professional
certifications and licenses and to comply with federal, state, and local
government regulations.
Technology is an integral element in the solutions of our learning group. We
are currently focused on standardizing our technological infrastructure and
platforms to support the development of new electronic products and services
and delivery systems. At Gale, we plan to integrate content delivery on a
single technology platform so that with a single search, customers will be
able to access a variety of reference materials on topics such as
literature, history and health through our Gale Resource Centers. In our
higher education publishing business, we are using technology to develop
electronic solutions that are designed to make the learning experience more
effective. In our lifelong learning business, we have implemented new
scheduling, registration and administrative systems that provide Prometric
test-takers with flexible registration options and lower our costs. We are
also using technology to consolidate our print and electronic materials and
software-based applications to create online training products for the
customers of our training business.
Competition
The higher education publishing market in the United States and
internationally has a small number of major participants. In addition to us,
they include Pearson Education and McGraw-Hill.
Our principal competitors in the global library print reference market are
Océano Grupo Editorial and the Grolier unit of Scholastic Inc., and in the
global library electronic reference market are ProQuest Company and EBSCO
Industries, Inc.
Our principal competitors in the global lifelong learning business include
Pearson in the computer-based testing market and SkillSoft Corp.,
DigitalThink, Inc., ElementK, MindLeaders, and KnowledgeNet in the
electronic and print-based training markets.
Thomson Financial
Our financial group is a leading provider of financial products and
information solutions to the global financial services industry. We offer a
broad range of financial data and related products and services to assist
trading professionals, portfolio managers, investment bankers, stockbrokers,
financial planners and corporate executives. We focus on the banking and
brokerage, investment management and corporate customer segments.
In November 2003, Thomson Financial announced the realignment of its core
buy-side and sell-side business units into one integrated organization. This
strategic realignment was largely implemented on January 1, 2004. The intent
of this realignment is to accelerate success in providing integrated
financial solutions, increase sales by better meeting the needs of our
financial group's customers and maximize the coordination among internal
organizations and processes.
We provide our customers with financial information, including historical
financial and economic information, broker research, earnings estimates,
transaction data, insider trading information, corporate information and
public disclosure documents. We also provide access to real time
information, including market data, trading information and financial news.
We make this information more valuable to our customers as our products and
services enable them to search, analyze and manipulate the data so that it
can be used more effectively. We also offer our customers other services,
such as the dissemination of corporate news releases, back office data
processing, transaction processing and, through our joint ventures, services
that facilitate trade settlement and securities issuances. We offer our
products and services separately and we are increasingly combining them to
provide comprehensive information and technology solutions.
In 2003, we continued our development of a suite of these combined products
under the Thomson ONE umbrella. Thomson ONE is a flexible open architecture
framework that allows for easy integration and delivery.
In the second quarter of 2004, we intend to begin the rollout of wealth
management workstations to Merrill Lynch's advisors globally. These
workstations will bring together market data, news and Thomson Financial
proprietary content integrated with customer relationship management and
portfolio management tools leveraging Merrill Lynch proprietary data and
online collaboration tools.
To provide quality data, we have a global research group that was comprised
of more than 2,100 employees in 13 countries as of December 31, 2003. This
group obtains and manages the financial information that we provide. Our
databases of financial information are some of the largest in the world. We
derive the majority of our financial information from public sources, such
as regulatory filings and analyst reports. We also conduct our own surveys
to create other data collections, such as our database of institutional
contacts. Our research group formats, organizes, indexes and edits the
information we collect to enhance its value to our customers and continually
updates it. In addition, we license content from third party suppliers, such
as Dow Jones for news. Having one global research group manage all of our
financial content is cost efficient, ensures its consistency and quality and
enables us to offer it across all of our customer segments.
Markets
Growth in the global market for financial information is largely correlated
with activity in the financial markets. In 2003, the market for financial
information declined due to protracted negative market conditions. However,
IPO volume in the fourth quarter of 2003 was the busiest quarter in three
years. In 2003, mergers and acquisitions activity in the United States ended
a two-year decline and we believe activity is poised to increase. In 2004,
we expect that the financial information market will return to positive
growth as market activity begins to return to traditional levels.
Consolidation in the financial services industry has affected the global
market for financial information. Consolidation has reduced the number of
customers in the market, which has the effect of intensifying competition.
In addition, consolidation among some of our competitors has resulted in
stronger competitors that have broader offerings of products and services
and increased scale.
We believe that we have effectively differentiated ourselves from our major
competitors in the global market for financial information. Our systems use
more open architecture than our competitors, which allows our customers to
more easily utilize other information and software applications with our
products and services. Our products and services are also less bundled than
those of some of our competitors, allowing our customers to purchase only
the content and applications that they need. As a result, we often provide
our products and services at a significantly lower cost to our customers
than our competitors. Some of our competitors are focused solely or
primarily on particular segments within the financial information market.
Our primary advantage over these competitors is our ability to offer our
customers a broader range of products and services to better satisfy their
complete information needs.
Operations
Banking and Brokerage
The investment banking part of our banking and brokerage group focuses on
providing investment bankers and private equity professionals with
integrated information solutions to assist them in pursuing and completing
transactions, including precedent analysis, company and market due
diligence, financial analysis and modeling, preparation of presentation
materials and securities offerings. The sales and trading part of our
banking and brokerage unit focuses on providing information solutions to
equity and fixed income professionals to assist them with each element of
the sales and trading process, including order indications, receipts and
executions, investment decisions, process confirmations and trading.
For our investment banking customers, we provide online financial data and
research on companies, industries and markets that allow them to develop and
analyze financial forecasts, market share, competition, industry trends,
economic climates and key industry participants. We offer mergers and
acquisitions transaction data that our customers use to identify comparable
transactions, business opportunities and business trends. We also offer
institutional securities ownership information that enables our customers to
determine who is buying, selling and holding securities. In addition, our
customers can access news, stock price information and SEC filings and
analyze this information with a set of comprehensive tools. All these
capabilities are available through Thomson ONE Banker, which provides a
comprehensive desktop solution for investment bankers that delivers all of
their real-time and historic data requirements integrated with specific
workflow applications.
Through Thomson ONE Banker, Thomson ONE Equity and Thomson ONE Yield, we
provide real-time financial information and market data, combined with the
ability to analyze and manipulate the data. Thomson ONE Equity targets the
institutional equities market and Thomson ONE Yield is designed for fixed
income professionals. The Thomson ONE open application framework allows our
customers to modify their workstations to meet their individual preferences
and needs. Through improved connectivity, our customers are able to link to
our other products, such as First Call, and other third party products and
services that provide the user with a range of financial information.
BETA Systems allows brokerage firms to outsource the majority of their back
office data processing activities, such as processing orders for securities
and maintaining customer and firm accounts. Through BETA Systems, our
customers are able to generate a range of customer account documents
including monthly customer statements, trade confirmations and real-time
portfolios. BETA Systems interfaces with major clearing services,
depositories and exchanges to process orders for securities.
We also offer AutEx, which is a database and online real-time network for
trade order indications and executions for listed and over-the-counter
securities. Through AutEx, a broker/dealer is able to send a real-time
indication of interest to buy or sell securities to portfolio managers. The
indication of interest appears in the portfolio manager's AutEx screen and
the portfolio manager can then contact the broker/dealer to make the trade.
Once the trade is complete, the broker/dealer reports the transaction to all
AutEx subscribers. This allows subscribers to obtain a summary of all trades
and indications of interest at any time.
Investment Management
Our investment management group is focused on providing information
solutions to assist portfolio managers and research analysts in buy and sell
side investment management activities such as investment analysis and
research. We offer a range of customizable products and services that help
our customers work through each phase of the investment process, including
research and analysis, investment decisions, stock selection, trade
execution and settlement. We offer our products separately and are
increasingly combining them to provide comprehensive information solutions.
First Call is one of the principal products that our investment manager
customers use. Through Thomson ONE Analytics, customers have access to
real-time equity and fixed income brokerage research, current and historical
analyst estimates, historical pricing data, global aggregated forecast data,
pricing data for U.S., European, Asian and other non-U.S. companies, market
indices data, institutional holdings data and SEC filings. Thomson ONE
Analytics enables financial professionals to identify investment
opportunities using any combination of more than 100 referential and
quantitative criteria, view the history of an individual analyst's
recommendations, estimates and published research and compare them against
actual results to assess past performance, calculate estimates using their
own information and assumptions and view their portfolio holdings. In
addition, Thomson ONE Analytics allows financial professionals to export
data so that it can be used in other software applications such as
spreadsheet applications.
We also provide our customers with products enabling them to analyze
portfolio characteristics, assess portfolio risk and performance and
construct portfolios with desired rates of risk and return. During 2004, we
intend to expand and integrate this area of our business into Thomson ONE.
Corporate
Our corporate group provides information solutions primarily to investor
relations professionals and financial executives. We provide online access
to financial information such as broker research, ownership and peer
analysis, news, stock quotes, institutional profiles and contact data.
We also provide services for the dissemination of corporate news releases.
Through Outbound, we offer a comprehensive offering for the investor
relations professional. This builds upon our alliance with PR Newswire that
allows us to distribute their news releases and corporate webcasts over
First Call and Thomson ONE products.
Other Joint Ventures
In 2001, we formed Omgeo, a partnership with The Depository Trust & Clearing
Corporation, to meet the expanding information and processing needs of our
customers in the financial services industry resulting from a proposal to
move from a three day (T+3) to a one day global settlement cycle (T+1). The
Securities Industry Association is expected to re-assess this proposal later
this year. If this initiative is implemented, we believe that Omgeo will be
able to provide clients with a managed transition to a new and more
efficient way of processing trades for straight-through processing and
increasing trade settlement capabilities.
Technology
In our financial group, we maintain global data collection and management
systems that have enabled us to assemble and manage one of the largest and
broadest database collections of financial information in the world. We also
maintain powerful delivery platforms that enable us to provide real-time
market data through our Thomson ONE suite of products quickly and reliably
to our customers. In addition, we have delivery architectures that allow us
to offer modular web-based services that can be bundled together to
integrate a number of our products and services into a single product
offering. Our systems allow us to combine these technologies with our other
web-based products and services, which gives us an advantage over our major
competitors. We also maintain private networks, or extranets, which enable
us to provide innovative community solutions such as our AutEx service,
which connects a large number of firms to a network and permits the online
exchange of real-time trade order indications and executions.
Competition
Our financial group's two major competitors are Bloomberg and Reuters.
Bloomberg and Reuters compete in all of our segments. Bloomberg is a
principal competitor in fixed income and equities, while Reuters is
particularly strong in institutional equities and investment banking.
Our financial group also competes in the investment management and banking
and brokerage segments with competitors such as FactSet Research System,
Multex.com (a Reuters business), Advent Software and SunGard Data Systems,
each of whom focus primarily on specific product and service areas within
the various segments.
Thomson Scientific and Healthcare
Our scientific and healthcare group is a leading provider of information and
services to researchers, physicians and other professionals in the
healthcare, academic, scientific, corporate and government marketplaces. We
derive most of our scientific and healthcare information from public
sources, academic, scientific, technical and medical journals,
pharmaceutical companies and practicing professionals and we supplement it
in many cases with proprietary analysis prepared by our staff of expert
editors. Our databases and websites are seen as important distribution
channels by authors and publishers of journals. We enhance the value of the
information by ranking, organizing and summarizing it to make it more
accessible and of greater utility to our customers and we update it
continuously.
• Our scientific solutions assist scientists in all stages of the research
and development cycle from scientific discovery to product release.
• Our healthcare solutions provide critical drug and clinical information
and medical education to physicians enabling them to improve the quality of
care their patients receive. We also provide integrated decision support
solutions that enable healthcare managers and practitioners to more
effectively manage the cost and quality of healthcare.
We operate primarily in the secondary publishing/content-hosting market
because we believe this market presents a greater opportunity for growth. We
believe that demand for scientific information will continue to grow because
our customers consider scientific research and development funding to be
necessary, not discretionary, expenditures.
Healthcare
The global healthcare information market is a very broad market. While we
participate in various segments, we are focused on the clinical and drug
information and medical education segments because we believe these areas
offer stronger growth prospects than other segments. Within the healthcare
information market, there is a continuing trend towards delivering
information to physicians and other healthcare professionals at the point of
care. The demand for point of care information is driven by a combination of
consumer demand for quality healthcare, cost pressures and heightened
awareness of medical errors. Medical education is a significant element of
drug introductions because physicians must be made aware of the existence of
a new drug and its benefits and risks before they will consider it as a
treatment option for their patients. Historically, medical education has
been provided in person through meetings and seminars. However, medical
education products are increasingly being provided through the Internet and
CDs to communicate new clinical information on a more global scale.
Operations
Scientific
Our scientific business provides integrated information solutions that
enable access to, and management of, the highest quality and Top
published materials for researchers, information specialists and
administrators in diverse fields. We also provide complementary products and
services, such as bibliographic software programs, content hosting of
well-established databases in the industry, and document delivery services
for full-text journal articles and patents. We customize our products for
particular industries or other customer groups and make them available in
one easily accessible, searchable database through the Internet and other
electronic formats. Our objective is to be the primary resource for
scientific information in the research and development process.
Within our academic division, the Web of Knowledge platform offers a single
point of entry for scholarly researchers. This electronic service extends
our users' access to research information by offering an integrated
collection of citation databases covering over 8,700 evaluated journals,
leading scientific and patent information databases, journal citation
reports, meetings and conference proceedings, and evaluated scientific
websites. Our advanced interface allows our customers to search a single
database or multiple databases concurrently and enables customers to link to
full-text journal articles provided by publishers and return seamlessly to
our service upon command to continue their research. The bibliographic
references in our database cover the period from 1945 to the present. The
Web of Science citation product is used in many of the leading academic
institutions and research libraries around the world.
Through our corporate divisions, we are the world's leading provider of
indexed patent information and patent abstracts. Each week, we assess,
classify, summarize and index over 35,000 patent documents from 37
international patent-issuing authorities and our databases cover the period
from 1963 to the present. Through our Geneseq database, we believe we
currently have the most comprehensive and authoritative source of
information on patented genetic sequences. Geneseq consistently contains
more sequence data than comparable public access databases. Our literature
and patent products and services can be used to monitor competitors, develop
research and business strategies, and protect patent portfolios. The world's
leading pharmaceutical companies, specialty chemical, automotive and
telecommunications manufacturers, and many other research-oriented companies
use these products and services.
Our corporate divisions continue to develop customized solutions for
specific niche areas that can be seamlessly integrated into our customer's
daily workflow. Each solution assembles sophisticated software tools with
relevant data from the World Patent Index, our consolidated coverage of
world journal literature, and must-have content extracted from our extensive
product portfolio, such as the Investigational Drugs Database (IDdb) and the
Delphion Research Site. IDdb primarily serves the pharmaceutical market and
provides validated, integrated and evaluated information about the R&D
portfolios of more than 9,600 companies and institutes involved in drug
development. The product includes information about therapeutic patents,
including links to the full text of the original patent, the pipeline status
of over 20,000 investigational drugs, searchable chemical structures,
meeting reports, and over 460,000 bibliographic references. Delphion is an
integrated solution that enables research and analysis of patents and
related intellectual property information. With Delphion, technical
professionals can search over 39 million patents from over 60 countries,
leverage unique productivity tools to analyze and track market developments
and competitive activities, and view, download and print high-quality patent
images. Through the acquisition of Techstreet in August 2003, we extended
our research and development offering to engineering customers. Techstreet
allows us to deliver over 100,000 global engineering standards and
specifications alongside our existing reference databases.
Healthcare
Our healthcare business provides integrated information solutions, often at
the point of care, to physicians, pharmacists, nurses and other health
professionals. Our drug, clinical point of care solutions, and patient
education resources enable clinicians to efficiently access the reference
resources they need to make decisions during treatment and provides patients
with pertinent information regarding their condition.
Our healthcare products represent a comprehensive database of drug
information, emergency procedures, evidence-based acute and chronic disease
information, poison and biohazard information, and patient education
information that has been compiled over more than 25 years. The database has
been developed from scientific and clinical literature by expert editors and
from approved drug-labeling information and was relied on by more than 7,700
healthcare facilities in over 80 countries during 2003. In the United
States, our DISEASEDEX Emergency Medicine product is used in over 1,800
hospital emergency rooms, our CareNotes patient education resource is used
in over 1,600 hospitals, and our POISINDEX reference product is used in all
63 poison control centers in the United States.
Our PDR (Physicians' Desk Reference) product is a drug database created from
Food and Drug Administration approved drug-labeling information and is
distributed in a print directory format, on handheld electronic devices and
through the Internet. Pharmaceutical companies provide us with the
drug-labeling information and list their products in the directory.
Pharmaceutical companies also sponsor the annual delivery of the PDR to
approximately 480,000 practicing physicians in the United States and we sell
approximately 330,000 additional copies of the directory to other healthcare
professionals and consumers. Our 170,000 physicians access the PDR over the
Internet and our handheld wireless version of the PDR is now being used by
over 45,000 physicians.
Through Medstat, we provide decision support systems, market intelligence,
benchmark databases and research for managing the purchase, administration
and delivery of health services and benefits. We also develop and provide
products and methodologies for organizing and understanding the data. Our
decision support solutions and research provide a vast collection of
healthcare information for corporate and governmental healthcare purchasers,
the managed care and health insurance industry, hospitals and integrated
delivery networks, the pharmaceutical industry and the health services
research community. This information helps these customers better manage the
cost, quality and strategic positioning of health services and benefits.
Primarily through our Physicians World and Gardiner-Caldwell businesses, we
provide medical education for physicians, pharmacists and other healthcare
professionals. These educational programs are often funded by grants or fees
from pharmaceutical companies and are sometimes certified in the form of
continuing medical education (CME). Most physicians in the United States are
required to complete a minimum number of continuing medical education hours
annually. Similar CME requirements are being introduced for physicians and
other healthcare practitioners in other countries. Pharmaceutical companies
fund medical education to introduce and keep physicians aware of new and
existing drugs as patient treatment options. We are increasingly providing
our medical education products through the Internet and CDs.
Technology
Technology is an increasingly important element of the products and services
of our scientific and healthcare group. We are focused on continuously
improving our content management and delivery technologies so that we have
the ability to provide our products in the media best suited to our
customers. This includes delivery over dedicated networks, the Internet and
handheld wireless devices. Each of our scientific and healthcare businesses
deploys a common flexible content management system that improves our
ability to customize and combine our products and simplifies the new product
development process. These content management systems provide efficiencies
in the information collection and editorial process as we are able to
automatically update our databases concurrently.
Our scientific business is committed to expanding the functionality of our
Web of Knowledge, Delphion, and IDdb platforms by introducing new features
and applications. Additionally, in our healthcare business, we are moving
our drug and clinical information products to platforms that can be
delivered to handheld and other wireless devices as we anticipate these
information delivery technologies will become an increasingly important
element of our point of care information solutions strategy.
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