Global Information Industry Outlook 2007

Earlier this week, Outsell, Inc., a research firm based in California, released Information Industry Outlook: FutureFacts 2007, its "annual forecast of the trends and drivers fueling the information industry". People can download a free complimentary copy of the 40-page document.

The report predicts that the world-wide information industry will reach $458 billion (U.S.) in revenues by 2009, with a compound annual growth rate (CAGR) of 6.4 percent from 2006-2009.

Outsell compiles its projections based on data gathered from over 6,000 industry firms. It also conducts interviews with corporate and other users.

The Legal, Tax & Regulatory segment of the industry accounted for 4% of the total in 2005 or $14.2 billion US in sales. The CAGR to 2009 will be 6.2%.

The Big 3 - Thomson, Wolters Kluwer and LexisNexis (Reed Elsevier) - dominate the segment with a combined market share of 59%. They also all have a higher growth rate than average as they consolidate through merger activities and branch out by moving into providing workflow tools like practice management, litigation management, automated billing, e-filing and electronic document assembly.

The report identifies a few rising stars in legal information as well as key trends in the sector:

• more globalization through acquisitions and partnerships
• the development of more specialized and finely-sliced practice-oriented sources to respond to more lawyers attempting to differentiate their services
• the rise of self-help information products that allow citizens to bypass traditional legal publishers
• growth through the development of workflow applications (Thomson Elite, Litigator, LexisNexis automated court filing)
• the spread of embedded legal compliance tools in the financial sector which has to respond to increasingly rigorous regulatory requirements

Here is what the report had to say about the other segments of the industry:

• Search, Aggregation and Syndication (10% of the industry) will boom, with a CAGR of 17.3% to 2009. This is the world of Google, AOL, Yahoo! and MSN. Google is described as "the new Starbucks. It continues to expand in every direction, with new launches and beta experiments cropping up all the time, akin to Starbucks opening five stores somewhere in the world everyday". Rising new stars: Baidu, described as "China's Google" and Ask.com, but traditional aggregators Factiva and LexisNexis also continue to occupy strong enterprise niches
• News Providers and Publishers has the largest share of total revenue, at 37% of the worldwide information industry. However, it will have a CAGR of only 1% to 2009. In this segment, no company has more than 5% market share, the major players being News Corp., Gannett, Tribune Co., Yomiuri Shimbun (Japan) and Asahi Shimbun (Japan). Interesting trends here include News Corp.'s $580 million US purchase of MySpace, the rise of news site Topix, jointly owned by Tribune and Gannett, and the emergence of local city sites that allow people to set up blogs, join groups and comment on news. But overall, traditional publishers are losing market share: Google, Yahoo! and other search engines now offer aggregated news and traditional news revenue streams are being eaten up by online job sites, online bookstores and eBay
• Education and Training (11% of the industry) is the 2nd largest segment. The big players (Pearson, McGraw-Hill, Harcourt, Scholastic, and Thomson Learning) make up one third of the segment. Rising stars include testing service Kaplan as well as a number of curriculum developers
• Market Research (7% of the industry) is dominated by custom research firms and consumer panel measurement boutiques. Examples: IMS Health. Trends: there is immense pressure to provide "real-time" market data and this means that GPS, RFID, sensor and scanner technologies are going to be huge
• Credit and Financial Information (9% of the marketplace) is the world of Reuters, Bloomberg, Moody's and Standard & Poor's, all growing at double-digit rates. Thomson Financial is also present with its investment and wealth management offerings. Key trends: the integration of capital markets necessitates the development of multi-regional analytics and local language solutions. Another trend is the increased need for data for regulatory compliance and the demand for reliable credit information because of concerns over fraud risk
• The Scientific, Technical and Medical segment (5% of the market) is a "mature market" according to the report and is starting to face competition from the Search, Aggregation and Syndication segment. A large part of STM growth was through M&A activity. Major players are Reed Elsevier, Thomson, Wolters Kluwer and Springer. Rising stars: IHS, Nature Publishing Groups, CSA. Key trends: international expansion into Asia, hot growth in "rich data" sets (seismic data, maps). Growth will be driven by geophysical and energy information
• Trade Publishing (6% of the market) had below-average growth. As well, Directories (9% of the total) will have a tiny CAGR to 2009 of only 2.3%
• IT Research is a tiny slice of the industry dominated by Gartner and IDC
• HR Information is also one of the smallest segments but it will have a CAGR of 14.2% up to 2009. The online recruitment services of Monster and CareerBuilder (joint venture of Tribune Co., Knight Ridder and Gannett) are major players. Key trends include products about compensation and benefits as well as "candidate identification" (personal information for headhunters and recruiters about potential candidates) and background checks