Beyond the Book Visits The GooglePlex

A new “Beyond the Book” podcast from Copyright Clearance Center in which CCC’s Chris Kenneally gets a special tour of the Googleplex and speaks with Steven Levy, a senior writer at Wired and author of In the Plex, his book about Google. Levy began writing about Google in 1999 and for his upcoming book, he spent two years inside the Googleplex. “It’s really hard to imagine a company that has a bigger effect on us in our daily lives than Google does.”

In the book, Levy had to keep Google’s social network Google+ under a codename “Emerald Sea” because it wasn’t released yet. “… people at Google told me that they felt that this was the one epic fail…they’d done a lot of things right over the year…but one thing they didn’t do that would have been a smart thing to do would be to master the social networking aspect- to build people into their product, as they put it.”

Levy goes to describe the sales people in relation to the engineers. “Google had this odd relationship to its sales force -… they [knew they] were necessary, but didn’t consider them, in a way, equal to the engineers…the engineers are in the center of it. But they see the ads section as also an engineering center. They think they’re making innovative products in engineering.”

Right. Well, you know, of course, the company was founded, begun at Stanford, and many of the early employees came from that environment – that elite campus environment where, I guess, they work hard, they play hard is – is that about what it’s like at Google?

A: Yeah, it is. There’s two strains, I think, in the culture of Google that are really important. And one of them, as you say, is the university idea there. And it is very much campus-like, not only in the amenities but in how they argue things. The job interviews, some people say, are almost like defending your dissertation. You’ll go on there. And there’s a lot of colloquy and back and forth, and they try to keep it based on data.The other strain in the culture is – comes from, I think, the fact that both founders –Larry and Sergey – were Montessori kids. So there’s a streak of irreverence that go on there. They question authority. And it’s OK to ask any question of anyone –even the founders. And once a week they have a meeting – an all-hands meeting –where anyone can attend and ask any question that they want.

And of course Google has a system where people can submit things online and vote them up and down, but they can also ask questions directly. And sometimes the questions are quite pointed, straight at Larry and Sergey, and they don’t take it personally. They’ll try to answer the questions very straightforwardly, and no one really worries about whether you’re offending Larry or Sergey when you ask a pointed question. I remember I was at a meeting once – at a TGIF meeting – where someone asked, why does our CFO get so much money? Why do we have to spend so much money to get a chief financial officer? And Sergey thought for a minute, and he said, well, you know, basically we looked at it and we felt that this was the going rate for CFOs, and we wouldn’t get a good one otherwise. And the other person sort of stood down and said, OK, that makes sense and, you know, that’s a good answer there. And they go on to the next thing.

The podcast is available here:

MediaWeek (Vol 4, No 31): Financial resutls: Pearson, Wiley, Wolters Kluwer, Reed Elsevier

From Pearson's press release: Pearson sales up 6% to £2.4bn and profits up 20% to £208m* (Pearson)

Education sales up 9% and profits up 31%:

• Good sales growth in International (up 26%) and Professional (up 35%).
• In North America, sales 3% lower with tough first-half comparables; full-year growth expected with easing H2 comparables and further market share gains.
• FT Group sales up 7% and profits up 10%, enhanced by digital subscriptions.
• Penguin sales 4% lower (underlying sales level); profits sustained with rapid digital growth. Strong growth in digital, developing markets and newly-acquired businesses
• Education digital platform and service registrations up 15%;
• FT.com subscriptions up more than 30%;
• Penguin ebook revenues up almost 130%.Sales up approximately 40% in developing markets (headline growth).
• Strong growth from recent acquisitions including Wall Street Institute, SEB (Brazil), TutorVista, CTI (South Africa) and Melorio (now known as Pearson in Practice). Full year outlook upgraded
• Pearson expects sales and margin growth for the full year, based on good trading momentum - especially in digital businesses and developing markets - and easing comparatives.Pearson expects to achieve adjusted EPS of approximately 80p for the full year (2010: 77.5p). This guidance is struck at current exchange rates (£1: $1.63). Publishing: In Education, we expect continued growth in 2011. While we face tougher comparatives in International and Professional in the second half of the year, we expect our North American Education business to report full-year growth based on business won in the year to date and less challenging comparables in the second half. Our education business faces continued pressure from state budget weakness and slower enrolment rates in North America, and a generally weak public spending environment in many developed parts of the world. We are confident that rapid growth in our digital and services businesses – which help boost student performance and institutional efficiency - and in emerging economies can continue.Penguin is working through a period of significant industry change characterised by a rapid shift towards digital sales channels and digital books and intense pressure on physical book retailers, demonstrated most recently by the bankruptcy of Borders in the US. Penguin has performed well through these industry changes and, after a particularly strong competitive performance and financial results in 2010, we expect it to perform in line with the overall consumer publishing industry this year.

From June, John Wiley & Sons Announces Fiscal Year and Fourth Quarter Results (Wiley)

Full Year Revenue up 4% excluding FX (+3% including FX) Adjusted EPS growth of 15% excluding FX, the $0.10 third quarter charge related to Borders, and $0.17 impairment and restructuring charges related to GIT last year. U.S. GAAP EPS growth of 16% including FX (+19% excluding FX)Free cash flow (FCF) increased 25% to $270 million. Net debt (long term debt less cash and cash equivalents) reduced by $243 million during the year to $252 million. Fourth Quarter Revenue down 0.5% excluding foreign exchange (up +2% including FX) Revenue growth by segment excluding FX: STMS flat, P/T -4%, HE +6% Reported EPS flat over prior year including FX (-5% excluding FX) FY12 Outlook Expect FX neutral outlook of mid-single-digit revenue growth and EPS in a range from ($3.15 to $3.20) Operations Results:

SCIENTIFIC, TECHNICAL, MEDICAL, AND SCHOLARLY (STMS)

• Fourth quarter revenue flat excluding FX, +4% full year
• Fourth quarter contribution to profit down 0.8%, +5% full year, excluding FX and prior year restructuring and impairment charges
• Calendar year 2011 journal subscription receipts showing approximately 3% growth with 95% of targeted full year business closed at April 30, 2011, as expected.
• Full year 2011 digital revenue at 59% of total STMS revenue
• Full year 2011 digital book revenue up 74% and now accounts for 16% of total book sales

STMS revenue for the quarter was up 3% to $287 million, or essentially flat excluding foreign exchange. The soft performance for the quarter was as expected as a result of approximately $10 million of accelerated billings reported in Wiley’s third quarter. Due to improved processes for journal subscription licensing implemented for calendar year 2011, revenue for published journals was accelerated into the third quarter of fiscal year 2011. Excluding the timing issue, new journal subscriptions and new society business, backfile sales and eBook revenue drove the results for the quarter.

Direct contribution to profit for the quarter grew 2% to $131 million, or fell 1% excluding foreign exchange and a prior year $0.8 million impairment/restructuring charge. Including the impairment and restructuring charge, direct contribution to profit for the quarter grew 3%, or was essentially flat excluding foreign exchange.

STMS revenue for the full year was up 1% to $999 million, or 4% excluding foreign exchange. Top-line results were driven by increased journal subscriptions, new journal society business and digital book growth. Through April 2011, subscription receipts for calendar year 2011 grew approximately 3% over calendar year 2010. Direct contribution to profit for the twelve months, excluding last year’s impairment/restructuring charges of $15 million, rose 1%, or 5% excluding FX. Revenue growth and margin improvement due to outsourcing journal production and fulfillment was partially offset by higher operating costs from business growth. Including the impairment/restructuring charges, direct contribution grew 5%, or 9% on a currency neutral basis. PROFESSIONAL/TRADE (P/T)

• Fourth quarter revenue down 4% excluding FX; up 1% full year
• Quarterly softness due to Borders’ impact on consumer titles. Borders represented about 5% of projected P/T sales for fiscal year 2011. All other key customers showed growth.
• Fourth quarter contribution to profit down 2% excluding FX; up 5% full year, excluding the Borders bad debt charge in the third quarter
• Digital revenue at 10% of P/T overall. This is up from 7% in FY10.
• Fourth Quarter eBook revenue up 145% over prior year to $9 million
• eBook revenue for the full year up 127% to $23 million, or 5% of P/T revenue

Fourth quarter P/T revenue fell 3% to $110 million, or 4% on a currency neutral basis primarily due to the disruption caused by the Borders bankruptcy. Ebook grew 145% over prior year to $9 million. Weakness in consumer titles mainly due to Border's issues and a strong fourth quarter of the prior year due to the initial publication of Office 2010 titles were partially offset by strong growth in the business/finance category.

Direct contribution to profit fell 1% to $24 million for the quarter, reflecting top line results mitigated by lower accrued incentive compensation.

P/T revenue for the full year grew 2% to $437 million, or 1% on a currency neutral basis. Growth in business/finance and professional education was offset by lower consumer sales due to the Borders disruption. Excluding the Borders bad debt charge of $9 million ($6 million after-tax) in the third quarter, fiscal year 2011 direct contribution to profit increased 5% to $105 million due to revenue growth and improved margins from higher eBook sales. On a reported basis, direct contribution to profit declined 5% to $95 million.

HIGHER EDUCATION (HE)

• Fourth quarter revenue +6% excluding FX, +7% full year
• Fourth quarter contribution to profit improved $2 million over prior year excluding FX, or $13 million,+15% full year
• Fiscal year 2011 digital revenue now 16% of higher education business, up from 13% in prior year
• Fiscal year 2011 non-traditional and digital revenue grew 26% to $84 million, representing approximately 27% of global HE revenue vs. 24% in fiscal year 2010.
• Annual gross margin up for third consecutive year due to increased digital-only sales

Fourth quarter HE revenue grew 8% to $48 million, or 6% excluding foreign exchange. Non- traditional and digital revenue sales in North America and higher School sales in Australia drove results. Sales of non-traditional and digital products were up 44%. Non-traditional and digital revenue includes WileyPLUS, eBooks, digital content sold directly to institutions, binder editions and custom publishing.

Direct contribution to profit for the quarter improved by $2 million, reflecting top line results and higher gross margins due to increased sales of ebooks and other digital products.

For the full year, HE revenue advanced 9% to $307 million, or 7% excluding foreign exchange reflecting growth in all regions. The results were driven by increased student enrollment, strong back-list sales driven by 25% revenue growth in non-traditional and digital products and a strong front list in engineering/computer science and science categories. Direct contribution to profit increased 17% to $101 million, or 15% excluding foreign exchange. Top-line growth, improved gross margin from higher digital revenue and cost containment drove the results.

Wolters Kluwer reported half year numbers (WK):

Highlights include strong operating performance, a strategic re-focusing of the Health & Pharma Solutions division, and reiterated outlook for 2011.

The information in this press release is based on continuing operations, excluding the planned divestment of the pharma business, unless stated otherwise.

Highlights

• 3% revenue growth in constant currencies to €1,619 million (1% organic) fueled by strong growth in electronic and service subscriptions which grew 7% in constant currencies.
• Online, software, and services now constitute 72% of total revenue.
• Ordinary EBITA up 3% in constant currencies (1% organic) supported by migration to higher margin electronic products and contributions from the Springboard program.
• Diluted ordinary EPS of €0.65 increased 2% over prior half year.
• Solid free cash flow of €131 million impacted by tax payments, on track for full-year guidance.
• Planned divestment of pharma business will focus the Health & Pharma Solutions division on leading market positions in professional information and clinical solutions; non-cash impairment charge of €106 million recorded as part of discontinuing operations.
• Full-year guidance for total Company reiterated for 2011.

Revenues grew 3% in constant currencies to €1,619 million, with organic growth of 1% (HY 2010: 0%). Legal & Regulatory revenues were in line with HY 2010, with organic growth improving markedly from -3% organic growth at HY 2010 led by strong results in North America. Tax & Acccounting revenues fell 1% organic, impacted by the restructuring of bank product revenue (2% of annual division revenues), which is expected to shift revenues into the second half year. Health & Pharma Solutions revenues grew by 9% in constant currencies (6% organic), driven by strong growth at Ovid and double-digit growth in Clinical Solutions. Financial & Compliance Services’ revenue growth of 17% (3% organic) was supported by double-digit growth in Audit, Risk, and Compliance (ARC Logics), strong performance from banking and compliance products, and global expansion through the acquisition of FRSGlobal. Emerging market results are advancing, with revenues in China growing with strong double-digit numbers.

Ordinary EBITA improved 3% in constant currencies to €325 million. The company improved profitability by the continued shift towards higher margin electronic solutions, diligent cost management, and the impact of the Springboard operational excellence program.

Reed Elsevier reported half year numbers (Reed):

First half underlying growth in all businesses

• Underlying revenue growth +1%, or +3% excluding biennial exhibition cycling
• Improving performance from large subscription and data businesses
• Cyclical businesses recovering
• Adjusted operating margin +1.3% pts at 26.6%
• Return to growth in adjusted earnings per share: +5%

Reed Elsevier’s Chief Executive Officer, Erik Engstrom, commented:

“The first half has seen the growth trajectory improve with our large subscription and data revenues strengthening and most of our cyclical businesses recovering.

Good growth in global scientific and medical research activity has supported spend on research information and tools. The risk business with its pipeline of new product innovation is expanding its data and analytics across insurance carriers’ workflow. In our legal businesses new sales continue to grow and our product and content enhancements are resonating well with customers. Our exhibitions are demonstrating the value of their offering with strong growth in the annual shows and a further acceleration of the new launch programme. Reed Business Information has returned to underlying revenue growth and delivered its highest margin in recent history, as it continued to focus the portfolio on high growth data services and online marketing, and increased the efficiency in its operations.

With positive momentum across our businesses, we continue to expect a gradual improvement in performance.”

Elsevier (44% of adjusted operating profit)

• Revenue growth +2% (+2% underlying), adjusted operating profit +5% (+4% underlying), at constant currency
• Growing research activity supporting science and medical research related spend
• Health Sciences: good growth in electronic solutions offset by continuing weakness in European pharma promotion, print books and US career school enrolments
• Budget environment mixed; varies considerably by geography and customer

LexisNexis Risk Solutions (23% of adjusted operating profit)

• Revenue growth +3% (+4% underlying), adjusted operating profit +5% (+6% underlying), at constant currency
• Strong growth in insurance data and analytics (+7%) supported by new product pipeline
• Growth across all of business services, government and screening solutions; varies by market
• Insurance software licence business -25% (£7m/€8m); carriers postponing enterprise systems purchases

LexisNexis Legal & Professional (12% of adjusted operating profit)

• Revenue growth -1% (+1% underlying), adjusted operating profit -4% (-2% underlying), at constant currency
• Return to underlying revenue growth; adjusted operating margin flat
• Legal markets stabilised but recovery in activity levels muted; new sales growing, content and product enhancements resonating
• Strong growth outside US in online services largely offset by print declines

Reed Exhibitions (15% of adjusted operating profit)

• Revenue growth -3% (-4% underlying), adjusted operating profit -7% (-8% underlying), at constant currency
• Underlying revenues +10% excluding impact of biennial show cycling
• Strong growth in annual events across all geographies
• Expanded launch programme with over 40 new launches expected for the full year

Reed Business Information (7% of adjusted operating profit)

• Revenue -8% (+2% underlying), adjusted operating profit +32% (+12% underlying), at constant currency
• Return to underlying revenue growth; adjusted operating margin up 4.7% pts to 15.4%
• Strong growth in data services and online marketing solutions
• Leading brands returned to growth in the first half; continuing difficult print advertising markets in other business magazines

Where Am I? LinkedIn, Twitter, Flickr, Google+, All of the above and more.

Networks are now so obvious. In the long ago past – about 1997 – we carried our networks around in our heads, diaries and phone books or club memberships. Sometimes other people may have had a better idea of our networks than we did – like your wife, parents or secretary, but that’s no longer the case.

I’m still understanding Google+ and not because it is so complicated but because I wonder at my investment. I jumped on LinkedIN and Twitter quite early on because, in both cases, I saw immediate personal utility. The ‘network’ aspect offered an interesting side benefit. In the case of twitter, while I enjoy my use of the service, which I would describe as a cross between delicious tagging and news broadcasting, I remain dissatisfied that I only have limited control over my networks. In contrast, other networks, in particular Facebook, have been failures for me perhaps because I am either uneasy mingling my networks or haven’t found a utility that solves a problem (at least for me). What is clear to me, is that investing in the application is critical to maximize any benefit and, this is where my problem presents itself. How many of these networks can you maintain properly without becoming dissatisfied, frustrated or under-whelmed? And underwhelming to others?

One of the odd things about Google+ has been the amount of people who have added me to their circles when I have no idea who they are. Some of this may have to do with the pseudonym issue: On other networks such as twitter they might use a handle other than their real name. What is the etiquette here? Am I supposed to add all of these people? At least with LinkedIn you have an ability to ask the person where they know you from before you add them to your network. Maybe I should have a circle tagged “anonymous” or “unknown”. Some, perhaps many of these ‘contacts’ may be readers of this blog which has a wide distribution via RSS. Unfortunately, I have no insight into my RSS population other than a subscriber number and the knowledge the number increases every week. I really wish I knew who these people were.

Recently, I went through the exercise of matching my outlook contacts, LinkedIN, twitter and Flickr networks. It was a curious exercise. I have approximately 2,000 contacts in my outlook address book. About 50% of these were not found/matched in LinkedIn. This was particularly surprising to me since both contact lists are ostensibly ‘business’ related and therefore inherently linked. In my small use case, the exercise may also indicate that LinkedIn could have a lot of upside. Of the matches in twitter, I could only find about 20% of my contacts had twitter accounts. In the case of Flickr – which I use a lot – of my 2,000 outlook contacts less than 20 had Flickr accounts and in most of these cases the accounts were basically dormant. In the case of the latter two networks, it is likely that many people are not using their business email to register with all networks. This complicates an exercise like the one I went through. LinkedIn has tried to address this by allowing more than one email address; however, I don’t see this as an effective mechanism. (It works functionally but not in a practical sense for the users).

Which brings me back to Google+. There are some features of the service which will be useful but I will need to invest time to understand and make use of it. In the meantime, I continue to manage my other networks as best as I can. Please join me but don’t be shy about introducing yourself.

Here are my networks:

LinkedIN

Twitter

Flickr

Blogger

Google+

I have no idea what to do with Tumblr.

United the logo of Continental

I learned to love Continental Airlines although it was hard at times – particularly when I was forced to cab it to LaGuardia to avoid their monopoly pricing on certain routes, but all in all the experience of travelling via Continental airlines has grown comfortable and predictable over the years. Perhaps I have modified my expectations but as any frequent traveller will tell you flying is not at all a glamorous experience. It has probably never been for any who started flying in the early 1990s. I’ve never been much of a United Airlines customer and I wonder how the merger of Continental and United might negatively impact my travel experience.

Gaining trust and ‘comfort’ with a brand represents a complicated dynamic and in their plans for integration, there’s no doubt significant time has been spent on allying all manner of fears their customers will have over the merger. The combined airline will be named United but will use the Continental livery – the color pallet, fonts and the Continental tail fin image. In this effort, which reflects I think their entire approach to the merger, management has taken the worst of all possible alternatives. Firstly, the word “Continental” connotes a far more expressive and international travel image than the word “United”. This is not because I am biased but “Continental” is aspirational, it reflects a big picture view of travel. “United” on the other hand has more to do what they are doing – uniting two transport companies – than to what they are offering customers. I can image the two management teams sitting in a big conference room agreeing to use “United” to make them all feel like a team. Sadly, nothing to do with what the customer may feel about the new airline.

The same is true of the “new” corporate strip. The Continental logo looked old and dated ten years ago. Oddly, while bland, the new United strip that they were in the process of rolling out prior to the merger looked more up to date. But that’s been cast aside in process as has brand strategy.

The combination of the two branding efforts has created a new corporate image which is jarring to anyone familiar with either company. It neither takes the best of each, nor inspires existing customers to expect a new and improved experience from the combination. The merger team has missed an opportunity, in a very basic way, to excite their customers (me) and, I fear this lack of inspiration will color the entire United/Continental merger effort.