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INFORMATION MARKET OBSERVATORY (IMO)


COMPANY INFORMATION IN EUROPE


Luxembourg, October 1994
IMO Working Paper 94/4 FINAL


The views expressed in this report are those of the IMO secretariat and do not engage the European Commission
Bat. J. Monnet, 
Plateau du Kirchberg,
L-2920 Luxembourg 
- Office: JMO B4-020.
Telephone: exchange (+352)43011, 
direct line +352 4301 32889. 
Fax: +352 4301 33190.
Telex: COMEUR LU 3423. 
Telegraphic address: EURDOC LU 2752.

CONTENTS

HIGHLIGHTS

LIST OF TABLES

Table 1:Statutory Bodies and Major Company Information Providers in Europe
Table 2:A Selection of Major Credit Rating Databases in Europe 
Table 3:Major Eastern European Databases 
Table 4:A Selection of Pan-European Databases

Highlights



This paper was drafted by the Policy Studies Institute on behalf of the IMO. Sources include interviews with company information providers and experts, source directories published by Gale, TFPL and the British Library, European information industry press and searches on company information and news CD-ROMs.

1. INTRODUCTION

European business information services generated revenues of nearly ECU 1bn in 1992, of which company information represented a substantial proportion. The aim of this paper is to provide a brief overview of the company information sector in Europe. In particular, the paper focuses on electronic information services in Europe, including eastern Europe, with a brief review of the US and Japan.

The company information category embraces many different data types. In this paper we will concentrate on the types of company information which are most widely used and supplied, namely: registered and trading addresses; names of directors and other contacts; industry classifications; financial information (ranging from a single turnover figure to full report and accounts) and credit ratings. Company databases might also offer news information, company and product brochures, share price information, official announcements and broker reports. Some offer locational information for marketing purposes. We will touch upon these areas as they arise.

2.AVAILABILITY AND COMPARABILITY OF COMPANY INFORMATION

In almost every country, companies are required by law to register with a statutory body and in some countries they also submit some form of financial account on an annual basis. In theory, this should mean that company information is widely and comprehensively available. In practice, however, the nature and remit of the statutory bodies and the type of data which companies are required to submit varies from country to country. Furthermore, statutory bodies are often ill-equipped to provide access to company files. In many countries non-compliance by companies and late reporting means that company financials are often difficult to find, unavailable, or out of date.

Yet the demand for company information is such that private sector company information providers are amongst the largest, most durable and most successful in the information business. Their role is to collect data in bulk from the statutory bodies, from the companies themselves and from other sources and to make it available in an easily accessible format. They add value to the basic data in a number of ways: by offering analysis such as key ratios; by their method of presentation, such as rankings tables with easy cross-company comparison; by the selectiveness they impose, for example the top 1,000 companies in a country or top 500 companies in a particular industry; and they add value by combining basic financials with other company information, such as credit ratings and news information.

In addition to the statutory bodies, therefore, a large number of information companies supply data on businesses in their own country and abroad. These range from small-scale directory publishers operating in a national market (often within specific business sectors), to multinational information companies offering on-line and CD-ROM services as well as print directories.

The July 1994 edition of the Gale Directory of Databases lists around 400 on-line company information services worldwide. TFPL's CD-ROM directory shows 426 titles in the Business and Company Information category at the beginning of 1994. Thousands of printed company directories exist if one includes regional and telephone directories. And yet there are still problems of availability.

It is relatively easy to obtain information on public,* quoted companies: they are, by their very nature, more open to the public gaze and disclosure requirements tend to be more stringent. The stock exchanges of France, Germany and the UK, for example, require quoted companies to disclose any change in the company's circumstances which might affect the value of its securities. This might include changes in personnel, major contracts and deals, interim performance reports, substantial investments and so on.

Unquoted public companies are not subject to these regulations, although their annual filings still tend to be fuller than those of private companies. They also provide financial information to enquirers on demand, usually in the form of an annual report. Information about public companies is therefore often obtained by information providers directly from the company in question: this eliminates the need to buy information from the statutory body and also means that the information is more current.

At the other end of the scale, it is very difficult to find information on non-limited companies, partnerships and sole traders. They are not required to submit annual accounts, except for tax purposes, and disclose financial information to the public at their own discretion - which usually means not at all. The only sources which include information on such enterprises tend to be specialist trade, local business and telephone directories, which sometimes include information on numbers of employees and are designed for marketing purposes. Information on private limited companies tends to vary widely from country to country, reflecting differences in reporting requirements.

Another problem arises in comparing company financials, especially in different countries. The type and depth of information required varies from country to country, and in many countries, companies are not required to follow a set format or method of presentation. Accounting practices also vary enormously. All of this means that cross-company comparisons are often made on false premises. Information providers are thus faced with the dilemma of either re-stating the data using standard formulae in order to facilitate comparison, r using the original data and thereby maintaining greater accuracy on an individual company level.

In spite of the comparatively good supply of company information, there are still problems of currency, accuracy, comprehensiveness and comparability. These problems affect Europe in particular, where the activities of national statutory bodies still vary considerably, and accounting and disclosure practices have not been harmonised.

3.THE SITUATION IN EUROPE

3.1 Statutory Bodies and their Relationship with the Private Sector

In all European countries, limited companies must register either with a central body such as Companies House in the UK, or with a local collection point such as the civil courts in Italy. The type of information which companies are required to submit varies, but can be as little as office address, names of directors and nominal capital, for example. An indication of the situation in each European country is provided in Table 1.

In some countries, state-owned or partly state-owned companies have been set up specifically to handle the provision of company information services, such as Cerved in Italy. In Denmark, Publicom was established in 1990 as a service organisation for the management of sales, distribution and marketing. Other countries have subcontracted tasks such as database management and marketing to private sector companies, such as O.R. Télématique in France and Euro DB in Belgium.

Going one stage further, the UK is moving towards the privatisation of the information activities of Companies House. This has led to considerable debate and concern within the UK information industry. It now appears likely that the information provision activities of Companies House will be contracted out. Existing information providers are unlikely to be eligible to bid, as this would create a risk of unfair competition. A contract for five to ten years is more likely to be awarded to a facilities management company or to a large commercial enterprise such as a bank. However, there are still fears that the move will alter the balance between statutory and private sector information providers. The new Companies House information provider will act as a private company, but will not have to pay the license fees for data which are paid by other information companies. On the other hand, private sector companies will be able to compete in terms of the value which they add to the basic data, (see Section 6.2), an area in which Companies House has said that it will not seek to compete.

The statutory bodies are concerned first and foremost with information collection and distribution in their own country. However, experimental work has taken place to interconnect the information systems run by public information collectors in Europe (see the discussion of the European Business Register in

Section 3.5. Some statutory bodies arealso making their own arrangements for distribution in otherEuropean countries. At the beginning of 1994, Companies Houseannounced its intention to deliver company information tobusinesses and the general public in Europe via Minitel and ASCIIon-line services. O.R. Télématique, the French host specialisingin company information, subsequently won the contract todistribute Companies House information throughout continentalEurope.<

3.2 European Suppliers and Services

Europe has a large number of company information providers and services, most of which operate primarily within national markets. This reflects the fragmented nature of the market. Table 1 lists over fifty of the major company information providers, all of which offer information in an electronic format. This includes several providers which cover a number of countries, of which Dun & Bradstreet, Kompass, Hoppenstedt, Creditreform, ABC, ICC and Datastream are the most prolific. However, around two thirds of the major providers listed offer services which cover only their national markets.

Those companies which cover a number of countries tend to have offices in each of the markets in which they operate. Dun & Bradstreet and Kompass, (which operates as a federation of national franchises rather than a multinational corporation), are prime examples. This reflects the nature of the company information business; it is almost impossible to gather and maintain accurate information on companies without a local task force. As a result, company information providers tend to contribute to local economies even if they are ultimately owned by a company outside the country in question, or even outside the EU. Beyond the information giants and key national players listed in Table 1, there exists a large number of operators which are active in subsets of the company information market. They often concentrate more on products and product classifications than on financial information.

Company information services can be split into three broad functions: buying, selling and business analysis. For buying purposes, companies need to locate other companies which supply the products or services they require and they need to judge the suitability of the company as well as the product. They therefore need access to credit information, the date of establishment, financial performance, number of employees and, most importantly, they need to be able to identify whether or not the company supplies the product they require. If trying to locate suppliers in other countries however, they will only need information about companies which are active exporters. For selling purposes, companies need to locate and evaluate potential customers within their geographic reach, whether this be local or international. They need to assess whether or not a company is likely to buy their product, based on information about business activities, size, performance and so on. This information is then used to feed into sales and marketing campaigns.

The biggest users of company information for business analysis are those in the financial sector, who use it for investment and lending decisions, for example. Some businesses also use company information services to identify and monitor competitors and assess market share. In this case, however, they are likely to require detailed analytical information such as broker reports and background such as news information and merger and acquisition research in addition to the basic company financials.

In fact, databases created with one of these functions in mind are often used for a range of purposes. One type of information which is needed for both buying and selling purposes, and sometimes for business analysis, is credit information. Credit ratings are sometimes available within general company information databases, such as the recently-enhanced Jordan Watch now updated to include credit scores, although more often dedicated services exist for the supply of credit referencing (see Table 2). New services are emerging all the time, especially for east European countries, although some are considered to be unreliable. Credit information also has a market standing of its own, outside that of the general company information market. Most credit rating databases tend to be concerned with either limited companies or with individuals. Sources for company credit databases include registration details, court judgements for debt and notifications for receiverships and liquidation.

3.3 Gaps in Information Availability

As part of this paper, the databases offered by information providers listed in Table 1 were analysed, and the areas where information provision was lacking identified. One of the most obvious gaps is in ownership and subsidiary information. Very few of the databases surveyed provided information of this kind and, where they did, they tended to give very few details of parent and subsidiary companies. This may be because the data is difficult to collect, as full reporting is not required, but also reflects the difficulty of linking and displaying affiliated companies. In some cases, specialist databases provide information of this kind (the Corporate Affiliations database, for example, produced by NRP in the US) but it is rare to find this kind of data in generalist company databases.

Most of the company databases provide some form of information about size, even if this is only number of employees or turnover. Full financials, ratios and even profit and loss accounts are much less common, however, and there are few examples of full text retrieval of annual reports and accounts. The UK is something of an exception here. Some 40 per cent of the information providers listed in Table 1 offer detailed financials. S&W provides full financials in France and ICC also provides full reports and accounts for the top 500 European companies.

A review of company databases also reveals that the majority of information available is concerned with public companies only. This also applies to the US. In response to demand for information on small companies, OneSource Information Services has recently launched a CD-ROM (UK Small Companies) containing information on over 170,000 small businesses with turnover or net worth of less than 300,000 Pound Sterling. Data is supplied by ICC and the disc is intended as a companion product to UK Private+.

There are major gaps in coverage of east European countries, and very few databases which cover the whole of Europe. This areas are dealt with in Sections 3.4 and 3.5 below.

Table2. Selection of Major Credit Rating Databases in Europe


  
Name of Service / (Provider) Coverage Type of information
Amadeus (SARITEL) Italy Information on approx. 25m credit defaults in Italy, both consumer and commercial
Automated Credit Enquiry - United Kingdom Credit information and credit ACE (Infolink Ltd) history for 2,5m businesses (and 23m households) in the UK
CCN Business Information United Kingdom Credit information on around 3m Database (CCN Business Info. Ltd) UK businesses
CreditInform (CreditInform) Norway Credit information on more than 500,000 Norwegian companies
Creditreform Datenbank Austria & Germany Credit information and credit ratings for more than 2m companies in Austria and Germany
DunScope International Credit ratings and recent payment (Dun & Bradstreet France SA) history for approx. 20m businesses worldwide
Eurogate (Graydon, BWI, SCRL) Europe Credit ratings on 8m European companies
GlobalScan (GlobalScan) International Credit data for more than 8m public and private companies worldwide
Infocheck (Infocheck Group, Ltd) United Kingdom Credit profiles of about 420,000 limited companies in the UK. Also provides credit evaluation based on company performance
TeleInform (O.R. Télématique) France Credit information and credit ratings for 2,5m French companies
Source: Gale Directory of Databases, Vol.1, 1994

3.4 Eastern Europe

Until two or three years ago, it would have been relatively difficult to find electronic databases covering eastern Europe, and even print directories were scarce. As the economies of these regions have opened up and become the target of inward investment, the range and quality of information available has improved. Major international suppliers of company information, (notably Dun & Bradstreet and Kompass), have extended their reach to eastern Europe and a number of local suppliers have emerged.

Table 3 lists a selection of the major databases covering east European countries and their suppliers, but there are certainly more which operate on a smaller scale and new services are constantly coming onto the market. The number of locally-produced print directories is also soaring. But even in regions with fast-growing economies, (such as the Czech Republic, Hungary and Poland), the investment required to translate such directories and turn them into electronic information services is simply not available. The demand for information on east European companies is undoubtedly there, but local companies are often unable to exploit this opportunity without investment from partners in rich-neighbour countries.

Table 3. Major Eastern European Databases

      NAME/INFO PROVIDER                   COUNTRIES COVERED              LANGUAGE    NO. OF COMPANIES    
_________________________________________________________________  ______________________________    

Dun & Bradstreet Eastern Europe      Eastern Europe;                English            19,000    (Dun & Bradstreet Ltd)
Baltic States; CIS        East European Kompass on Disc        Eastern Europe                 German                N/A
(Kompass Deutschland)        Czechoslovakian Companies            Czech Republic                 English/German     11,500
(Inform Katalog)        Bizekon News - Soviet Business       CIS                            English             2,500    
Directory (Russia Informatie &     Communications Agency - Russia)        Estland Firmenprofile                Estonia
English               N/A    (Connectus Ltd.)        Firmendatenbank
Litanen              Lithuania                      
English               N/A    (Litanisches Informatinstitut)        Sovinfo Novosti Companies            
CIS & Former Soviet  Union     
English               N/A    (Novosti)        Business Map                         Former Soviet Union            
English            45,000    (V.P. International, UK)        
Hungarian Companies                  Hungary
English            41,400    (NTEI, Hungary)        Ungarn Firmendaten                   
Hungary 
German/Hungarian      N/A    (Firmenspiegel Osteuropa)        Kompass Polanel                      
Poland                         Polish/English     25,000    (Eurostart)        Kooperacja                           
Poland                         P
olish/English        N/A    (Eurostart)        Polen Firmendaten                    Poland                         
German/Polish        N/A    (Firmenspiegel Osteuropa)        Polish Companies                     Poland
German/English        N/A    (Informationsvermittlungsagentur    Waldemar Kabanski)            
Sources: Gale Directory of Databases 1994; CD-ROM Directory,  TFPL; EADP Membership Directory    
_________________________________________________________________  ______________________________        

There are of course exceptions, of which SZUV in Hungary is a prime example. SZUV has been in operation for 40 years and has 1,200 employees. It diversified from print to electronic media four years ago when it launched a diskette database, for which it now has around 400 to 500 subscribers. SZUV now offers an on-line service through its own host computer. The on-line database contains information about 100,000 Hungarian companies, including contact and product information, capital and company registration dates. SZUV has also developed a database which includes information on partnerships and co-operative ventures sought by Hungary's largest companies. Meanwhile, Dun & Bradstreet's Czech company, which began operation in 1991, had 11 employees by the middle of 1994 and has experienced rapidly growing demand for its services.

Poland, Hungary and the Czech Republic are the best-covered markets in Eastern Europe. Indeed, rapid privatisation and the sheer level of expansion in business activities in the Czech Republic for example, has created a demand for subscription-based business information services such as Tenfore Czech Sro. This service is delivered by satellite, direct to the user's PC where it can be manipulated as desired. Tenfore argues that the large number of new shareholders in both the Czech and Slovak Republics means that instant access to such business information is vital.

Nevertheless, most users of databases on east European companies would agree that there is room for improvement on both the quality and quantity of data offered. The only categories of data offered by all of the databases listed in Table 3 seem to be location, legal status and number of employees. Detailed financials, credit ratings and ratios are very rare, although Creditreform offers credit ratings for some regions and has been active in the Czech Republic since 1991. Ownership or subsidiary details are also difficult to find, and industry classification codes patchy. Details of importer or exporter status are rarely available. However there are several databases, (EBRD Watch, Eastern European Business & Investment guides, for example), which are aimed specifically at those looking for business opportunities in Eastern Europe and these seem to contain information on importers and exporters.

The reliability of financial information offered by east European company databases is regularly called into question. This remains an essentially cash trading area, and published figures are often questionable. Some of the local services are now in their third year of operation, however, and are therefore more stable. Where financial data is not crucial, eastern Europe is fairly well served with contact name and address information, especially when compared with other countries with transitional economies. Such information is generally available from local Chambers of Commerce where formal information services do not exist.

3.5 Pan-European Company Information

Pan-European company information services are affected not so much by availability of data as by comparability. This is a fundamental problem which has its roots in the differences in company law and accounting practice which exist in Europe.

The struggle to harmonise European company law has a long history. The first Commision's Company Law Directive was issued in 1968 and established rules for the maintenance of registries and public access to records. The Fourth Directive of 1978 extended the degree of disclosure of company reports and accounts, but was mostly aimed at larger companies. Small and medium sized enterprises were still able to claim exemption from some of the requirements, such as revealing annual turnover or profit and loss figures.

Differences in the categories and depth of data required by registration authorities makes it almost impossible to create a database of comparable company financials for the whole of Europe. Even where registration databases contain the same categories, the use of different definitions and accounting practices makes it impossible to compare like with like. Profit figures are a prime example.

For publicly quoted European companies, information providers can gather comparatively large amounts of basic data from the companies themselves, which they can then manipulate and present in a fairly standardised format, even if the data is not directly comparable. For this reason, most of the pan-European databases which offer financial information concentrate on large public companies. Table 4 lists a selection of some of the largest pan-European databases. Some of the providers shown on this table are the companies which began with coverage of their own national market, (such as ICC in the UK and GBI in Germany), and have branched out into European coverage. This partly reflects user demand for pan-European information and partly the need of national information producers to realise the greater economies of scale offered by international markets. Others are companies which already covered a number of countries and have integrated or added to these databases to create a pan-European or worldwide service.

Table 4. A Selection of Pan-European Databases

NAME OF SERVICE                        PRODUCER                       NO. OF COMPANIES    LANGUAGES

COVERED             AVAILABLE    
_________________________________________________________________  ____________________________________________    

ABC Europe                             ABC der Deutschen  Wirtschaft &       150,000      English/German
Europ Export Edition GmbH        Duns European Marketing Online         Dun & Bradstreet  Europe            
2 million English        Dunsprint UK and Europe                Dun & Bradstreet  Europe                  N/A       
English/Dutch/French/ German/Italian/ Portuguese/Spanish   European Analysis  The Analysis Corporation    1,600
English        Europe's Largest Companies             ELC Publishing                         28,000      
English        Extel Company Research                 Extel Financial Ltd                    10,000      
English        ICC Full Company Reports & Accounts    ICC Information Group                   5,000      
English        Kompass Europe                         Kompass Online (RIS)                  200,000      
English        World Wide Companies                   GBI                                     2,000      
German        European Kompass on Disc               Kompass UK (RIS)                      370,000      
English/French/German/                                                                                           
Italian/Spanish        Disclosure/Worldscope/Europe           Disclosure Inc.                         2,000      
English        CD/Europa                              Dun & Bradstreet Ltd.                  50,000      
English        Europages CD-ROM                       SEAT - Divisione SpA;  EUREDIT        130,000      N/A        
_________________________________________________________________  ____________________________________________    

Sources: The Instant Guide to Company Information Online -  Europe, British Library; Gale Directory of Databases
1994; CD-ROM  Directory, TFPL.

There are in fact very few databases which are truly pan-European; many fail to cover the smaller economies in Europe and EFTA countries tend to have patchy coverage. Coverage of companies other than the public and quoted is also poor. In theory, it ought to be simple to combine national databases from a number of providers to create a pan-European database. In practice, differences in presentation, database fields and, more significantly, industry codings, means that databases created in this way tend to come across to the user as disjointed and inconsistent. Whilst some databases use SIC codes, others are based on proprietary codings, (such as the Kompass codings and Duns numbers), and relatively few have adopted the EC NACE codings (European Community Classification of Economic Activities).

There is a lack of pan-European databases which are based on data gathered in a standardised format according to agreed ground rules. Dun & Bradstreet is one of the few companies which can offer an integrated European database because it uses data which it has researched and produced itself and which it can verify at source. It does not need to buy in data such as financials and credit ratings from a whole series of other suppliers, as is the case with many providers. Pan-European company information providers without local data collection and verification resources are often dogged by problems of reliable data supply. Even where data is supplied directly by the statutory registration body, there can be problems, especially where the collecting authorities are split into regions.

The lack of fully integrated European company information is a potential threat to the effective operation of a single European market. This is especially true for those enterprises which need to locate suppliers and, indeed, customers in other European countries. It is also a problem for companies trying to keep an eye on European competitors. The European Commission has recognised this problem and in 1992 initiated the European Business Register (EBR) project as part of the European Nervous System (ENS) programme. It is worth looking at the EBR project in some detail, in that it provides us with some interesting examples of the differing situations in Europe and of relationships between public and private information providers.

The aim of the EBR project was to create a pilot network linking a number of national statutory bodies in Europe. The project, which came to a close at the end of 1993, has so far allowed interconnection between Italy, the UK, Denmark and France. The key organisations involved in the project are:

Chambers of Commerce/Cerved: Cerved SpA is the information services joint-stock company of the Italian Chambers of Commerce. Founded in 1974, it collates and provides real-time data gathered by each of the 95 Italian Chambers of Commerce. Since inception, its activities have been constantly widened to face growing demand for business information. Cerved is the main contractor on the EBR project.

Danish Commerce and Companies Agency/ Publicom: The Danish Commerce and Companies Agency is part of the Danish Ministry of Industry and acts as the central registration point for all Danish companies. In 1990, it established a service organisation, Publicom, to manage sales, distribution and marketing of the on-line service as well as other kinds of registered company information.

Companies House/Mercury Communications: Companies House is the UK central registration office, responsible for providing information on all UK-registered companies. Mercury Communications, a telecommunication company 80 per cent owned by the Cable & Wireless group, operates the UK on-line company searching system in conjunction with Companies House.

INPI/O.R. Télématique: The Institute National de la Propriété (INPI) is the central French Government Agency in charge of the National Trade Register. All legal information on the 2.7 million registered companies in France, published locally by the Trade Courts, is passed to INPI and then given to O.R. Télématique for data entry and on-line distribution. O.R. Télématique is the principal operating company within the O.R. Group, an association of businesses involved in the supply of business and financial information.

The pilot EBR network was officially launched in October 1993 and allows access to each of the national country registers of the above four countries. It aims to provide a standardised access to national data, using each country's query language. The major challenge is not only to extend the system to other Member States, but to develop a system capable of meeting end-user needs. In addition, the question of pricing arises, with different member states operating different pricing regimes for their statutory data. Moreover, the EBR remains at a pilot stage and has yet to prove itself in terms of end-user take-up.

Meanwhile, several private sector consortia have been established for the provision of pan-European credit information. The longest established is GlobalScan, which offers information on 8 million companies worldwide. Eurogate has been established more recently. It is represented by Graydon in the UK and the Netherlands, Bürgel Wirtschaftsinformation (BWI) in Germany and SCRL in France and provides credit information on companies in East as well as Western Europe. Internet is another recent example, (not to be confused with the Internet), a consortium led in the UK by CCN. It offers standardised company and credit information from 14 countries, all searchable in the original language. There are obvious difficulties in calculating credit ratings on the basis of different accounting and business practices in Europe, but these providers claim to overcome the problem by using ratings developed by agents in the countries concerned, who are familiar with local trading conditions.

4. COMPANY INFORMATION IN THE US AND JAPAN

As might be expected, the US market is the most extensively covered in terms of number of services, with some 65 on-line databases on corporate financial information listed in a recent directory (Gale Directory of Databases, Volume 1, July 1994). This compares with only nine pan-European databases listed on the same subject, although Europe obviously has a lot of country-specific information. But even the UK, which is the largest market for electronic company information, is only listed as having 12 databases.

As with most countries, information on public companies is more widely available than that on private companies. This leads to a somewhat unbalanced situation, as of the more than 11 million US companies, only 11,000 are required to file full financial statements with the Securities and Exchange Commission (SEC). Private companies, subsidiaries of public companies and branches, do not make filings. Nevertheless, several large US databases, including Duns Market Identifiers, Ward's Business Directory (available on CD-ROM through One Source US Private+) and Standards & Poor's Register-Corporate, do cover privately-held companies. Where financial information is provided, it tends to be extensive compared with Europe, with detailed financials, including capital, sales, profit, loss and `key' ratios. The only notable omissions in terms of general coverage is details of importer/exporter status, although this is sometimes available through specialist databases.

With more than 7 million registered businesses in Japan, the question of business information is not so much one of quantity, but of quality. Nevertheless, company information is in high demand within Japan. A survey carried out by the Japan Database Promotion Center in 1994 indicated that company databases were the second most frequently used by the business community, after news databases. Who's Who directories providing contact and background information on individuals in companies were also found to be popular. In 1992, 88 Japanese company databases were available in Japan and a further 235 covering overseas companies.

However, the majority of print and electronic sources on Japanese companies are available in Japanese only. This is an obvious barrier to Japanese information companies wishing to sell their products overseas. Michael Houser of Bridge International Consulting (EBIC '94 Proceedings, TFPL) says Japanese business information is like an iceberg, with only the tip available to non-Japanese speakers. Several large databases do however cover the market in English (e.g. NIKKEI Financial file, COMLINE Japanese Corporate Directory) and the coverage tends to be reasonably extensive, with detailed financial information more widely available than in some European countries. Again because of language problems, full text availability is rare.

Japan sees itself very much as an information society and density of news and business coverage is probably the highest in the world. Nikkei Inc., for example, publishers of the Japanese daily financial newspaper, Nikkei Shimbun, offer an array of real-time news, financial and economic databases including Nikkei fax, which provides daily English-language excerpts by fax from same day Japanese editions of Nikkei Shimbun.

5.DISTRIBUTION TECHNOLOGIES

During the course of the last ten years or so there has been a gradual shift from print to electronic distribution of company information. In the last couple of years, sources previously available only in print have also become available on CD-ROM, and company information providers with existing on-line businesses have diversified into CD-ROM publishing. Print, on-line and CD-ROM remain the principal distribution media for company information, with print still dominating for the distribution of local and regional information, and electronic media growing rapidly in national and international information provision.

Taking as a sample the membership of the European Directory Publishers Association (EADP), of the 156 company directories published by association members, 60 (38.5 per cent) were available on CD-ROM, 51 (32.7 per cent) on-line, 7 on videotex and 5 on diskette. Fewer than half of the directories (44.9 per cent) were available in a print format only. The starting point of EADP's lists is print, and there are, of course, many other company information services which are available via electronic media only and which are not defined as directories. Equally, the association's membership probably includes a disproportionate number of large publishers. Nevertheless, these figures show that where company information is concerned, there is a definite move away from print only publishing towards information delivery across a number of media.

The movement towards CD-ROM publishing of company information reflects a more general trend throughout the business information sector. In some areas, this has been accompanied by a decline in new releases of on-line products. According to the recent edition of Headland's Online/CD-ROM Business Sourcebook (reported in What's new in Business Information, May 1994), the number of business information CD-ROMs had grown 40 per cent in the previous six months, while new on-line products had increased by just 3 per cent. According to Headland's lists, the number of company directory CD-ROMs had grown particularly quickly, rising from 53 to 80 in the six month period of the research. Overall, Headland claims to have tracked almost 1,300 electronic business information products, covering the full range of business information from trade marks and market research reports, to directories and credit rating. Of these, it claims that a quarter are now being published on CD-ROM.

Recent research in the UK also indicates that CD-ROM is becoming increasingly popular amongst users of business information. A survey of organisations with in-house information departments conducted by Benchmark Research (reported in Infotecture Europe, 8 April, 1994) revealed that 75 per cent of information specialists were using on-line services in 1993, down from 90 the year before. The shift, it seems, has been towards CD-ROM, with surveyed organisations reporting CD-ROM usage up from 29 per cent to 47 per cent.

Nevertheless, the market for on-line company information is unlikely to be entirely eroded by CD-ROM. For many organisations using company information, the purchase of a CD-ROM costing anything up to ECU 10,000 is not financially viable. SMEs would come into this category, as would organisations which do not require regular or bulk access. For organisations such as these, pay-as-you-go media will remain the preferred option. Some information providers have managed to combine CD-ROM and pay-as-you-go, however, using metering techniques. TDS Ltd, a UK company specialising in company contact information for marketing purposes, introduced a low-cost, metered CD-ROM service in 1993. The disc, entitled MarketPower, comes with 3,000 credits which are depleted as data is downloaded. Further credits can be paid for by credit card. This is one of the few company information CD-ROMs which is aimed specifically at the SME market. Jordans has also experimented with pay-as-you-go CD-ROM metering for company information.

CD-ROM is also less suited to frequent updating than on-line media. Some on-line company databases are updated weekly, if not daily. Updating a CD-ROM this frequently is only viable if the product in question has a very large subscriber base or is very high-priced. Extel now offers daily and weekly updates of its company information services through a combination of CD-ROMs and on-line media. Seamless interfaces between CD-ROM and on-line services (especially those delivered on ISDN or broadband) are likely to become increasingly common. These will allow users to formulate their search queries and carry out searches of historical data off-line, linking into on-line and possibly real-time services for the most up to date information.

The availability of ISDN and broadband networks opens up new opportunities for the delivery of document images, which is particularly suitable for annual reports and accounts, brochures and prospectuses, as well as product information. On Demand Information Plc and Perfect Information in the UK are both working on applications of this kind. In June 1994, Perfect Information announced that it would use BT's ISDN service to offer an electronic library of original documents such as reports and accounts, company circulars to shareholders and announcements from the Regulatory News Service of the London Stock Exchange. The archive goes back to 1988 and around 700 new documents are added to the system every day. Disclosure is also using ISDN in Europe for delivery of its Laser D Online service.

The availability of company information on videotex varies considerably throughout Europe, reflecting uneven levels of activity and penetration of terminals. France has a wide selection of videotex databases for company information, ranging from local business directories to sector-specific company directories and financials on leading corporations. A recent article by Béatrice Riou of FLA Consultants in Bases listed over 40 local, national and international company databases available on the French videotex system. National and regional company directories are also available on videotex in Germany and Spain. A videotex system was launched in Moscow in April 1993 and is to provide access to company information, amongst other things.

Another long-standing distribution medium for company information is fax, although it has never represented a large proportion of the market. Fax delivery has been seen by some information providers as a fast and effective way of reaching computer illiterate end-users and information users who are already suffering from information overload. FT Analysis offers fax delivery of company reports for a standard fee on request. At the 1993 Online Meeting in London, Infocheck launched an automated fax delivery service using the I-Fax system. This requires users to fill in a pre-designed form specifying the company in which they are interested, together with customer and account information. The relevant company report is then faxed back in a matter of minutes.

Delivery of company information, (and of business information in general), over the Internet is currently hampered by the lack of payment and copyright control mechanisms (see IMO Working Paper 94/3, The Internet and the European Information Industry). A handful, including Infocheck, have already taken the plunge. It may be another couple of years before European company information becomes commonly available on the Internet, but many information companies see the development of services for distribution over international networks like the Internet as an inevitable and natural progression of media diversification. Similarly, few company information products currently exist for handheld reference devices and PDAs such as the Sony Electronic Book, Apple Newton and Magic Cap. But activity in this area will grow as unit sales rise and major players, such as Mead, enter the field.

6. CONCLUSIONS: THE MARKET FOR COMPANY INFORMATION

The aim of this section is to review the main trends and developments and to draw conclusions about the market for company information: the level of competition; the types of users; likely growth areas and future prospects. Unfortunately, there is little to be said about the size of the company information market, or about the market for electronic information as a subset of the latter. Although many market reports and industry statistics do break the information market down into subject areas, none appear to separate company information from other types of business or financial data. In the EU, electronic business information services generated revenues of ECU 993.4m in 1992, according to the latest EIIA/EC Co-ordinated Host Survey. Company information probably represents one of the single largest elements of this total, together with business news and patents.

Electronic information services probably represent some 25 to 30 per cent of the total European company information market, although this varies considerably from country to country. The UK has a higher proportion of revenues from company information in an electronic format than other European countries, followed by France and Germany. It is generally accepted that the UK represents around half of the total European information market and the same is true of the company information market. Nevertheless, use of electronic company information services by small businesses is probably stronger in France, where the penetration of videotex is high and many company directories of interest to SMEs are available on the system.

6.1 Company Information Users

Information-intensive sectors such as the financial services, chemicals, pharmaceuticals and some manufacturing industries still generate a substantial proportion of company information use. Large corporations in these and other industries tend to have specialist staff, and a dedicated budget for information purchasing. These are also the companies which are most likely to use electronic information services. As their internal information systems and networks develop and computer use becomes pervasive amongst senior and middle managers, their information requirements are changing. There is a growing emphasis on information access by end-users, rather than by information specialists only, and a desire to maximise exploitation of information resources.

Several of the company information providers contacted during the course of this study indicated that, in response to customer demand, they were supplying information to large corporations for multiple-user access over internal networks. In most cases, this was thought to have increased the volume of information used and paid for, although pricing and monitoring information use over networks could still pose problems. It is difficult to tell at this stage to what extent end-users distinguish between information produced within their company and information bought in from outside when it is available on an internal network, and to what extent they are able to identify individual information suppliers. Although this is not a problem in itself, there is a risk that end-users will not develop an understanding of information value, pricing and quality.

The company information sources most likely to be used by SMEs are still hard copy local and sector-specific directories. However, some electronic information providers have commented that SMEs are becoming increasingly important company information users, especially in professions such as law and the media. The falling price of computer hardware and growing penetration of CD-ROM drives and modems means that small companies, and even sole traders, are seen as prospective customers for company databases. However, the cost of providing technical support and of billing for a large number of small accounts has discouraged many providers.

Whilst some information providers have reported a growing interest by SMEs in their products, others feel that the focus on SMEs has been a result of government push rather than market pull. In the UK, for instance, the impetus for a one-stop business information shop for SMEs came from the Department of Trade and Industry and, as a result, a series of Business Link centres are being set up in conjunction with the Chambers of Commerce. Meanwhile, CD-ROM metering has been seen as a good way for commercial information providers to reach the SME market.

6.2 Competition and Adding Value

Competition amongst providers of company information is already fierce in some regions and is likely to become increasingly so as public sector bodies begin offering electronic access to official registration databases. Once the basic data becomes widely available, private sector information providers are forced to compete either on price, or by adding value. The UK market is already reaching this stage.

Many information providers are seeking to add value by offering features in addition to the basic company data. Some are enhancing their services by offering original document images, as noted in this paper. Others are concentrating on the development of tools for complex analysis and presentation of financial data. Many databases already provide key ratios and comparison of ratios between different companies. CD-ROM lends itself to this type of numeric analysis, and Jordan's Financial Analysis Made Easy (FAME) CD-ROM was one of the earliest examples. This allows searching of 110,000 UK companies by over 40 financial data items and over 30 ratios and trends.

However, a provider's view of which ratios are `key' do not always coincide with those of the user. Going one step further, some products now allow users to `create expressions', that is, to develop their own ratios or combinations of ratios. A recent example is Company Analysis, launched in May 1994 by Extel, with data on 10,000 companies in 47 countries. The software allows users to create their own standardised comparisons and provides various tools for displaying the information. Presentation and display tools are equally important in adding value, and many CD-ROMs allow users to create customised graphs and charts based on the financial data provided and to export data into spreadsheets. For marketing databases, on the other hand, geographical presentation of company location is likely to become an important feature.

The ability to create seamless links between basic company data and other types of company information will also become an important way of adding value. Many of the information companies listed in Table 1 own news databases and market research information, but as yet these are not available in a consolidated form together with company financials. The advantages of being able to view company accounts, look up a credit references and review recent news on that company within a single search are obvious. The biggest challenge here will be in creating the links between files on the same company, which in many cases will be a costly exercise.

6.3 Growth Areas and Future Prospects

In addition to growth in value-added applications, there are a number of other areas where market expansion can be expected. Although there has been an increase in the availability of pan-European company information services in the last couple of years, there are still areas of demand which are unfulfilled. This paper has highlighted the lack of pan-European databases offering information which is fully comparable from country to country. As a growing number of vertical markets become integrated in Europe, information on companies in other countries will become increasingly critical for the support of both buying and selling activities. There are also signs that the demand for reliable and up-to-date company information on European countries outside the EU is growing faster than supply, especially where eastern Europe is concerned.

The market for company credit information continues to grow, representing the biggest demand area for company information in France, according to Georges Fischer of Paris Chamber of Commerce & Industry. At the beginning of 1994, Benchmark Research carried out a study of business information users in the UK sponsored by Reuters, Infolink, Companies House, Extel and Dun & Bradstreet. The study revealed that credit information was one of the areas where there was most demand. And the credit information sector is thought to be growing more quickly in Europe than in the US, where the market for electronic information is relatively mature. According to Simba's Information Publishing Market Survey of 1994, credit information represented 6 per cent of all North American business and professional information sales (including print) in 1993, with a turnover of US $ 1.98bn. This represented a 4 per cent increase since the previous year, with an overall growth of 11.6 per cent between 1991 and 1993.

The availability of low-cost computing and widespread use of information networks like the Internet is likely to have a major impact on the market for company information. After news, company information is one of the biggest demand areas in the business information sector. As more and more businesses and individuals start using electronic information services for the first time, use of company information is likely to grow substantially. Campaigns by national governments and by the European Commission to encourage information use by SMEs will also help to create an awareness of electronic information services amongst companies which have not previously used them.

New users of electronic information services have notoriously high expectations, however, and substantial improvements on current information provision will be needed if these expectations are to be satisfied. The currency, accuracy and geographical coverage of the company information databases available is still far from optimal, and there are fundamental problems with cross-country comparisons on many databases. Many of these problems are a result of differing registration and accounting laws in Europe. There is, nevertheless, a demand for pan-European information and so far, this market is rather less crowded than many of the national company information markets. In both national and pan-European markets, however, the ability to offer value-added data, a range of delivery media and attractive user interfaces will be an essential element of success.


* Note: In this paper, the term `publicly-quoted companies' refers to those firms in the private sector whose shares are publicly traded. Public unquoted companies are those which have a partial listing and not all shares are traded. And private companies are those which do not have publicly traded shares.

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