Hot off the Press: Elsevier

[Paula Watson <pdwatson@uiuc.edu>]

Since their earnings continue to drop and they are laying off 1,500 people
(mainly in the Lexis-Nexis operation) maybe they'll be more willing to
give libraries a better deal.


>AMSTERDAM, Netherlands (AP) -- Anglo-Dutch publishing giant

Reed Elsevier announced a plan today to invest $1.2 billion to bring its
traditional operations online and boost earnings growth.

The company, which also reported an 8.2 percent drop in pretax 1999
profit, said it will pump an $400 million into online activities every
year over the next three years.

"Capitalizing on the potential of the Internet will be a key driver of our
strategy,'' the company said in a statement.

The Internet plans come hot in the tracks of a similar announcement from
British financial information provider Reuters Group, which said three
weeks ago it will spend $800 million on its digital operations over the
next four years.

Reed Elsevier hopes a combination of higher technology spending and
cost-cutting will lead to stronger earnings later this year. The company
will cut also 1,500 jobs, or about 6 percent of its work force, as part of
its belt-tightening efforts.

Reed Elsevier, which specializes in legal, scientific and business
publications, is known for its entertainment business magazine Variety,
electronic news database Lexus-Nexus and scientific publication Cell. It
generates 65 percent of its sales in the United States.

The latest investment is geared towards achieving earnings growth of at
least 10 percent and Internet sales of $1.6 billion by 2002, the company
said.

Reed Elsevier's new strategy comes against the backdrop of what the
company admitted were disappointing 1999 results, largely caused by a weak
market and stronger competition.

Revenues last year inched ahead to $5.54 billion, up from $5.23 billion
the year before. The company trimmed its 1999 dividend by about one-third
to support the growth plans.

The company's stock, which trades in London and Amsterdam, rose more than
10 percent in early dealing, but fell back sharply in the afternoon,
possibly because of a U.S. lawsuit also announced Thursday.

In Amsterdam, Elsevier's shares were down 8 percent and Reed's stock also
traded down in London. The company said it will face a $6 billion lawsuit
in the United States over subscription agreements.

For anyone who more details, #29 on the hit list when you search Elsevier 
on Today's News in Lexis-Nexis (Regulatory News Service) gives the CEO's and 
division heads statements re Elsevier's business situation and its new 
Internet and marketing strategy, e.g.

"In Science, our focus is on expanding ScienceDirect. New research from
our journals and from a growing number of other publishers is being added
to ScienceDirect daily and the archive is being significantly extended.
Authoring tools, library management tools and other taskware is being
added to improve customer productivity and utility. Throughout 2000 we
will be customising services and content to specific scientific
disciplines, e.g.  biotechnology and pharmaceutical, and to the differing
research markets, e.g. academic, government and corporate."

AND

"We are pursuing a significant programme of customising, marketing and
selling efforts to the differing customer groups across our markets. This
includes re-invention of pricing models more suited to growth in Internet
services and away from "one size fits all".  Global branding of Internet
services, such as ScienceDirect and Lexis, together with channel alliances
and marketing networks with other online service providers, will be a key
element of our marketing strategy. We are also significantly increasing
our spending on advertising and promotion behind Internet initiatives. "

****************************************************************************

Paula D. Watson
Director, Electronic Information Services
University of Illinois Library, Rm. 246A, MC-522
1408 West Gregory Drive, Urbana, Illinois 61801
pdwatson@uiuc.edu; (217) 333-0318 (voice); (217) 244-4358 (fax)