People data has long been a solid niche in the content industry. Multiple times in my career (particularly at Nelson and Leadership Directories), I’ve developed products built around people data.
While this segment has been changing over the past five years, the pace of change has accelerated dramatically during the past 12-18 months, and the traditional business models are quickly becoming obsolete.
In recent weeks, there have been a few compelling new entries in this market. For the traditional providers, the biggest short-term threat probably comes from the new partnership between Capital IQ and sister company Business Week. The new Company Insight Center on Business Week’s website provides snapshots of both public and private companies. The People section includes fairly accurate lists of officers and directors and also shows “degree of separation” relationships among board members for social networking.
In essence, Capital IQ is now providing for free a product that paid content providers have been selling for tens of thousands of dollars. While the user interface of this beta version could use some improvement, that’s pretty easy to fix.
In the longer term, the trend that’s likely to have a much greater impact is a paradigm shift to accessing people data through search. Traditional providers have built proprietary (and often complex) user interfaces to view their data. In an effort to address every potential user need (list building, views of complex organizational structures, sharing of user edits and more), vendors developed systems that were not intuitive and often required training of end-users.
But in today’s environment, users don’t want proprietary interfaces. They don’t want to read documentation or sit through training sessions. Users have already found a user interface which they like and it’s called Google. I can hear the response of the traditional vendors - Google is too simplistic and can’t do all of the fantastic things which your proprietary interfaces allow. Well, that may be true, but it’s the interface that the world has embraced and if your system is more complex, you’re going to be left behind.
The emerging providers are viewing this market as a vertical search issue. ZoomInfo and LinkedIn were the first to take this approach. New providers like Wink and Explode have launched compelling offerings. Perhaps most interesting is a new site (still in early beta) called Spock. Spock is sort of “ZoomInfo meets LinkedIn”, with a Web 2.0 interface which incorporates tagging and other community features. When you first join Spock, it asks you for your ID and password to LinkedIn, Plaxo, Gmail, Yahoo or AOL. It uses this information to scrape your existing network, adding that information to your Spock profile. Spock automatically tags your profile, using term extraction to identify companies, titles and industry terms that represent you. Users can “vote” as to whether the tags accurately represent the person, creating a tag cloud for each person. (Note: I will do a more comprehensive review of Spock in an upcoming post.)
The people data market is going through a transformation similar to that which affected news content a few years ago. Contact and biographical data are rapidly becoming commodities and the next six to twelve months are sure to bring more disruption to this market.
Most of the traditional players in this market have built their business by identifying a niche which they can fill better than anyone else. At Nelson, we knew industry specialties for buy and sell-side analysts; at Leadership, we could tell you which committee staffer had an interest in a particular subject. But the dirty secret for most of these providers is that the core application typically accounted for only a third to half of their customer base. The rest of the customers were just looking for lists for sales prospecting or recruitment. While the emerging products may never be deep enough to steal away the core users, they are already getting good enough to pull off the ancillary user and will only get better. So, if you’re trying to project 2010 revenues for one of the traditional players, there’s a pretty easy formula. Just estimate about a third to half of their 2000 revenues and you’ll probably be on target.
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