Reed Elsevier Targets Digital World
Recently announced, publishing group Reed Elsevier has agreed to pay £45 million to acquire a social network for academics. Mendeley has a community of 2.3 million users and allows academics to organise their journal articles and other content online and collaborate with other researchers. According to the Financial Times, this acquisition is the publishing group’s latest efforts to adapt to the digital age.
Reed Elsevier, owner of the LexisNexis database, has been trying to strengthen its position in digital media in recent years. According to the Financial Times, the group has spent about £900 million on acquisitions since 2010 while selling print assets such as its Variety magazine. Reportedly one-fifth of the group’s revenues represented print publications last year. In 2006, over half of the revenues came from print publications. A partner at Passion Capital, one of the venture capital firms that invested in Mendeley, said the deal was a sign of publishing companies “moving towards more accessible publishing”.
According to Bloomberg, Victor Henning, Mendeley’s co-founder and CEO, stated that their vision is to make science more collaborative and open and that now they had the support of the world’s largest science information provider. Ron Mobed, Chief Executive of the group’s publishing division, Elsevier, was quoted in the Financial Times saying that the deal “was part of an ongoing programme to increase the usability and functionality of our offerings”. In a move to ease concerns that its acquisition of Mendeley might jeopardise the network’s collaborative culture, Reed Elsevier has reportedly said it will increase researchers’ storage limits, without increasing their subscription fees. According to TechCrunch, since Mendeley’s beginning in 2008, the company has focused on the its guiding principle of open source and free access to research data. Its database contains over 340 million documents, posted by more than 2.1 million members and nearly 206,000 research groups. Mendeley has also made a move to educational apps based on their content base.
Reported in the Financial Times, the deal to buy the cloud-based research and collaboration service has been reportedly in the making for a few months. The deal price includes staff earn-outs and values Mendeley’s users at about £20 each. For comparison sake, Facebook’s current value per user is about £35. As stated in the article, Mendeley has proved to be more successful than Elsevier’s own collaborative software, 2collab, which was shutdown in 2011. According to Bloomberg.com, Reed Elsevier’s shares rose 14 pence to 755 pence yesterday and have risen 18 percent this year. Obviously the publishing giant is doing something right and it will be interesting to see what next steps are taken by Reed to become more digital.
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