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Business Overview & Proposed Strategy. Bruce Cardinal Gale Group Corporate Division May 21, 1999. Confidential and Proprietary. Do Not Distribute. Agenda. Corporate Division Overview ComputerSelect Results The IT Market Opportunity Sierra Concept Overview Sierra Plan Next Steps.

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Business Overview &

Proposed Strategy

Bruce Cardinal

Gale Group Corporate Division

May 21, 1999

Confidential and Proprietary. Do Not Distribute.


Agenda

Corporate Division Overview

ComputerSelect Results

The IT Market Opportunity

Sierra Concept Overview

Sierra Plan

Next Steps


Why it vertical

Corporate Division

Why IT Vertical?

Leverages current assets

  • IT customer base

  • ComputerSelect brand

  • Product and company content

  • Market dynamics attractive

    • Fastest growing U.S. industry

    • High rate of change increases demand for information

    • High risks associated with wrong decisions

  • New opportunity for Thomson


  • Changes in customer base

    ComputerSelect

    Changes in Customer Base

    9,710

    8,593

    6,178

    4,781

    4,391

    • The number of customers is dropping as we target higher dollar accounts and spend less effort on smaller CD sales


    Lines of business

    Corporate Division

    Lines of Business

    $40 Million

    InSite

    18%

    ComputerSelect

    25%

    • The Gale Corporate Division generated revenues of $40 million in 1998

    Percentage of TotalRevenues

    Resellers

    57%


    ComputerSelect

    Changes in Revenue Base

    • Loss of CS CD customers is major reason for revenue decline

    • CS Web is growing at an increasing rate


    Sales trends

    ComputerSelect

    Sales Trends

    • Average revenue per customer is rising as the mix shifts to more web sales


    Breakdown of cs web accounts

    ComputerSelect

    Breakdown of CS Web Accounts

    • Majority of CS Web sales are small installations . . .1 to 3 concurrent users

    1 Concurrent

    $2,995

    Standalone

    $1,550

    6 or More

    Concurrent

    $14,395+

    3 Concurrent

    $7,595


    Target market size

    The IT Market Opportunity

    Target Market Size

    Source: OES 1996 Employment Statistics

    Outsell Jan. 1999


    Research and advisory services

    The IT Market Opportunity

    Research and Advisory Services


    Major it publications

    The IT Market Opportunity

    Major IT Publications

    1CMP acquired by Miller-Freeman in April 1999


    Project Sierra

    Content Sources

    • New Content

    • Customer Experience

      • Market Research Panel (IntelliQuest)

    • Expert Opinion

      • Licensed content (Giga or Gartner)

    • Training Resource Center

      • Original content

      • Links to CBT sites and Amazon.com

    • Bug Reports and Alerts

      • Original content

      • Cambridge/IT Group support

    • Web Search Results

      • Aeneid technology

    • Integration of Indices

      • Computer Database and DataSources

      • Outside experts (Giga/Gartner)

    • Expanded journal coverage (80+)

    Existing Content

    • Computer periodicals (100+)

    • DataSources product data

    • Indexing and term mapping from Computer Periodicals Database and DataSources


    Project Sierra

    Economic Model

    1Assumes 4% penetration of IT user market


    Next steps

    Project Sierra

    Next Steps

    • Announce InSite transferMay 24

    • Re-focus sales force on ComputerSelect

    • Present MBDI June 7

    • Further validate market opportunityJune 15

    • Market analysis and research

    • ComputerSelect customer feedback

    • OCTO and Thomson CIOs

    • Verify cost modelJune 30

    • Negotiate panel and IT analyst deals

    • Clarify internal editorial/development costs

    • Negotiate ZDNet partnership June 30

    • Commence implementationJune 30

    • Create phased development plan

    • Implement Phase 1


    Technology Purchasing Process

    New Technology

    needed by organization


    Technology Purchasing Process

    New Technology

    needed by organization

    Research and identify technology and vendor options

    Research using third party data

    Search Web for vendor sites and user groups

    Network with peers


    Technology Purchasing Process

    New Technology

    needed by organization

    Research and identify technology and vendor options

    Create “short” list

    (3 - 5 Vendors)

    Conduct research on vendors

    Compare products (specs, integration)

    Research cost-of-ownership issues

    Evaluate aftersale support


    Technology Purchasing Process

    New Technology

    needed by organization

    Research and identify technology and vendor options

    Create “short” list

    (3 - 5 Vendors)

    Selectvendor and

    deploy technology

    Obtain customer references

    Look for bug information

    Refine cost-of-installation model

    Investigate and purchase training


    Technology Purchasing Process

    New Technology

    needed by organization

    Research and identify technology and vendor options

    Research and identify technology and vendor options

    Maintain new technology

    Create “short” list

    (3 - 5 Vendors)

    Create “short” list

    (3 - 5 Vendors)

    Selectvendor and

    deploy technology

    Selectvendor and

    deploy technology

    Follow developments at vendor

    Monitor bug alerts

    Evaluate potential upgrades

    Obtain ongoing training


    Technology Purchasing Process

    New Technology

    needed by organization

    Research and identify technology and vendor options

    Maintain new technology

    PROJECT

    SIERRA

    Create “short” list

    (3 - 5 Vendors)

    Selectvendor and

    deploy technology


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