1. 1 Private Equity & the Information Industry & The Google Effect Business & Finance Division SLA Conference 2008 June 18 th 2008

2. 2 PE, Info Industry, Google Effect PE Articles for Business Information Alert  Explore the relationships of the PE sector and business information  As a concept; with the importance/growth of PE investment  Our business as a part of the Media sector  The Google effect  This presentation for B&F at SLA Conference 2008

3. 3 PE, Info Industry, Google Effect PE Articles for Business Information Alert  4 articles 2007-2008  Part 1 – Explains PE  Part 2 – PE investments in BI in Europe  Part 3 - PE investments in BI in North America  Part 4 – PE and the Google Effect  Will be published together later in 2008 as a BIA “Guide to International Business Information” Volume 3 with an extensive bibliography of PE sources & services  Business Information Alert website: http://www.alertpub.comhttp://www.alertpub.com

4. 4 PE, Info Industry, Google Effect PE in our own industry 2007  Cross border deals US/Europe  Deals with library automation companies, eg. Sirsi Dynix purchased by Vista Equity Partners  Bureau van Dijk 2004 & Summer 2007  Gale purchased as part of Thomson Learning by Apax & OMERS and many more …………

5. 5 PE, Info Industry, Google Effect Private equity-definitions  PE investment is % stake in the business  PE investment is longer term (than VC) (4 to 7 years) and will often take the company through more than one business cycle  Unlike debt (i.e. bank loans), the equity position in the company usually does not require regular payment  Debt is the traditional way to finance business  PE investors will look for a capital gain and an increase in the value of their shares  This means the company needs to have cash flow available for growth

6. 6 PE, Info Industry, Google Effect The Google Effect  Since 2004; Google ’ s IPO  multiplier “ effect ” of Google  every $1 of spending on the web creates $2-3 of economic activity

7. 7 PE, Info Industry, Google Effect The Google Effect Other definitions:  Google’s IPO leads to other web based companies generating similar high offering prices and acquisitions  Microsoft & Yahoo  Catalyst for the online economy by creating new business models

8. 8 PE, Info Industry, Google Effect The Google Effect Other definitions:  Google makes searching the web easier; everyone has greater technical aptitude; more comfortable searching on their own  Expectation and demand that search should be easy  Demands easy access to information  Those that can provide the information needed in the right format will win business

9. 9 PE, Info Industry, Google Effect The Google Effect Which all leads to  Decline in use of information professionals’ expertise ?  Will quality research techniques still be valued?  Just make do with searches on Google?

10. 10 PE, Info Industry, Google Effect Media Sector/Publishing  Definition = The media industry consists of the advertising, broadcast & cable TV, publishing [which includes print and online databases] and movies & entertainment*. * Media in the United States: Industry Profile, December 2006, Datamonitor, Reference Code: 0072-2104, p. 7-8.

11. 11 PE, Info Industry, Google Effect Media Sector/Publishing  Business information company deals  high barriers to entry,  steady revenue growth,  strong cash flow,  significant mergers and acquisitions activity

12. 12 PE, Info Industry, Google Effect The Google Effect and Private Equity What consumers expect  Relevant quality content  Easy access to that content because of the “Google Effect” So  Private equity buyers will continue to see value in the media and information sectors  In ways that will probably not be grasped by the open market

13. 13 PE, Info Industry, Google Effect “Consumers are demanding greater flexibility and control over their content, requesting a greater degree of personalized media and the ability to connect with it at a time and location of their choosing. This personalization of media has led to an increased diversity of content.*” *“You’ve Been Googled”, by Mike Cunningham, Nick Bertolotti, Neil Shelton, Giasone Salati, Simon Baker and Heath P. Terry, Credit Suisse Brokerage report, March 19, 2007, p. 3 Thus the appeal from PE firms in owning the disaggregated content customers might be interested in.

14. 14 PE, Info Industry, Google Effect ANN CULLEN e-mail: acullen@hbs.edu SYLVIA JAMES e mail:da-james@11daymer.freeserve.co.uk