Re: Elsevier profit

[Tom Williams <twilliam@bbl.usouthal.edu>]

In reply to Mr. Esposito, his view is a bit on the naive side.  
Elsevier's profit margin last year was well in excess of 30%.  It's not
just new and fresh business which take off that have such high margins of
profit. Those which have been around for a very long time, who regularly
buy up their competition, and who steadily increase their prices in spite
of huge profit margins, are commonly referred to as price gougers where I
come from.  This company's reputation in this regard is well-deserved.

However, there are initiatives underway which may very well change the
face of publishing as we know it.  Publishers may not always have the
ability for such outrageous prices.  In fact, sometimes I get the
impression that Elsevier and others of similar ilk are raking in all they
can now in expectation of the gravy train hitting a huge snowbank down the
road.

-- 
Thomas L. Williams, AHIP
Director, Biomedical Libraries 
University of South Alabama
College of Medicine
Mobile, Al 36688-0002
tel. (251)460-6885
fax. (251)460-7638
twilliam@bbl.usouthal.edu

On Sat, 29 Mar 2003, Ann Okerson wrote:

> Am forwarding on behalf of Mr. Esposito, as we are having some addressing 
> problems with his account.
> 
> ---------- Forwarded message ----------
> Date: Fri, 28 Mar 2003 12:46:20 -0800
> From: Joseph J. Esposito <espositoj@worldnet.att.net>
> Subject: Fw: Elsevier profit
> 
> The news story does not provide enough information to make any judgments.
> A 43 percent gain cannot be a typical operating gain.  It just doesn't
> happen except in young, fast-growing companies.  The real question is the
> baseline:  what went wrong with last year's revenue?  Or I should say
> operating income, as no mature company grows revenue by 43 percent in one
> year except through acquistions.  (Reed, of course, recently acquired much
> of Harcourt Brace.)  In other words, the notion that the 43 percent figure
> is evidence of corporate greed is baseless.  Has anyone paid a 43 percent
> price increase to Reed?  While there might be a few institutions that have
> significantly increased their business with Reed, the academic library
> segment absolutely did not spend 43 percent more with Reed's continuing
> operations in the past year.
> 
> There is much that is wrong with academic publishing today, but it would
> be a good idea for everyone who is interested in this area to throw all
> the emotion out the window and look at the facts soberly.  One thing that
> would emerge is that much, if not all, of Reed's growth is at the expense
> of other publishers.
> 
> Joe Esposito