KnowledgeLink Interactive Inc. of Linthicum is acquiring two of IBM Corp.'s information services. The deal, which will be announced Monday, figures to give year-old KnowledgeLink new prominence in a hot but uncertain field of the information-technology industry.
KnowledgeLink is obtaining the assets and licenses of IBM's InfoMarket and Lotus Newsstand.
InfoMarket is a research service that scans big commercial databases that are not generally available on the Internet. Newsstand is an online service that offers subscriptions to electronic publications.
The financial terms of the deal were not disclosed.
KnowledgeLink Chairman and Chief Executive Officer Edwin R. Addison said the move will boost his company's work force from 17 to 30 and give the firm an immediate stream of revenue; he expects $2 million in sales in the second half of 1998 and $10 million in 1999.
Privately owned Know-ledge-Link is using the purchases to position itself in what is known as the "knowledge management" industry.
Knowledge management, put simply, is the business of sending companies news articles, documents and other information that meet their needs.
Demand for such help has grown as the sheer volume of information has increased.
With the explosion of the Internet, private intranets and information services such as Lexis-Nexis, there is more information, coming from more sources, than ever before.
"There are too many haystacks," Addison said.
And finding the needles takes time. Some high-tech observers say there's a fortune to be made from using artificial intelligence and other sophisticated methods to help businesses find customized information quickly.
"Knowledge management will impact the information-technology market in much the way the Internet did," said Gerry Murray, a program manager at International Data Corp., a computer industry research firm in Framingham, Mass., allowing companies to adopt "a greater pace of innovation."
KnowledgeLink is seeking a piece of the knowledge management market, which is projected to be worth about $5 billion by 2000.
Addison said that, for now, the industry is wide open.
"The players are like marbles rolling around in a box," he said. "There's plenty of room."
The acquisition of the IBM services gives KnowledgeLink some important new assets.
The company had already been developing software that collects and presents information. However, the firm had only limited access of its own to that information.
For its software to function as an information tool, it would have to enter partnerships with so-called "content providers," the publishers and others who produce articles and documents.
InfoMarket and Newsstand are "content" services with direct access to the publishers and assemblers of information. By buying these services, KnowledgeLink becomes a content company as well as a software company.
Stan Lepeak, a vice president at META Group Inc., a Stamford, Conn.-based computer analysis firm, said this combination makes KnowledgeLink a viable player in the industry.
"Having the tool is OK. Having the tool and the content is much better. You can bring a lot more value to the customer," he said.
However, not everyone wants to be in both the software and content arenas. Some of the world's most technically adept companies, such as IBM and Microsoft Corp., have encountered frustration in their efforts to supply content.
Jeff Crigler, vice president of knowledge management tools at Lotus Development in Falls Church, Va., was involved in the sale to KnowledgeLink and freely admitted that his company, which is part of IBM, was looking for a way out of the content business.
He said, "We're a software company, not a content company. It was as simple as that."
Murray said, "There is a lack of focus at both IBM and Lotus on what it means to be in the content business. It makes a lot of sense for them to spin those operations off to someone who is focused."
"For KnowledgeLink, it's really an impressive acquisition."
Pub Date: 5/02/98