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OCLC’s ongoing open season on acquisitions

Smart Libraries Newsletter [February 2006]

Breeding, Marshall.

Copyright (c) 2006 ALA TechSource

Abstract: Opening 2006 with the purchase of Openly Informatics, OCLC (Online Computer Library Center) continues its buying spree of technology companies. This company brings into the OCLC fold content components related to e-journals holdings and key technologies in the reference-linking arena. Openly shifts its private-company status into a division of a non-profit organization. Eric Hellman, founder/president of Openly Informatics, will continue to head the activities of his former company as director of the OCLC Openly Informatics division, reporting to Mike Teets, VP of Global Product Architecture at OCLC.


Opening 2006 with the purchase of Openly Informatics, OCLC (Online Computer Library Center) continues its buying spree of technology companies. This company brings into the OCLC fold content components related to e-journals holdings and key technologies in the reference-linking arena.

Openly shifts its private-company status into a division of a non-profit organization. Eric Hellman, founder/president of Openly Informatics, will continue to head the activities of his former company as director of the OCLC Openly Informatics division, reporting to Mike Teets, VP of Global Product Architecture at OCLC.

Compared to OCLC, a large global organization employing about one thousand individuals, Openly Informatics is a very small company; it operates with a staff of eight. All the staff members of Openly Informatics were offered and have accepted employment with OCLC.

This acquisition of Openly Informatics follows OCLC PICA's acquisitions of Sisis Informationssysteme (June 2005) and Fretwell-Downing Informatics (November 2005), both currently operating as wholly owned for-profit subsidiaries. As OCLC grows through acquisitions, it becomes involved in an increasingly complex matrix of non-profit, for-profit, and competitive issues.

These acquisitions do not, however, affect OCLC's status as a non-profit membership-owned cooperative. The non-profit regulations under which OCLC operates allow a portion of its revenue to be derived from commercial activities.

About Openly Informatics

Openly Informatics focuses its business interests on access and management of electronic content. It has developed linking technologies and knowledgebases related to OpenURL-based reference linking. A pioneer in the reference-linking arena, Openly developed linking architectures and technologies that predate the OpenURL standard. Openly markets primarily to other companies that license its technologies and content to be resold to their library customers. It has developed OEM relationships with some of the major companies in the industry including SirsiDynix, Endeavor Information Systems, R.R. Bowker, ISI ResearchSoft, and Swets Information Services.

Eric Hellman founded Openly Informatics in June 1998 as a company focused on providing technologies and services to facilitate electronic publishing. Prior to founding Openly, Hellman served as a research scientist at Bell Labs for ten years. During his tenure at Bell Labs, Hellman founded the MRS Internet Journal of Nitride Semiconductor Research (http://nsr.mij.mrs.org) an early e-journal thatrelied on innovative automation techniques, which were precursors of some of the e-journal publishing and linking technologies widely used today. Openly Informatics continues its involvement with this e-journal to the present.

In December 1999 Openly Informatics announced its LinkBaton redirection service, based on the Scholarly Link Specification (S-Link-S) framework developed by Hellman and first published in October 1998. The company launched the Link.Openly journal metadata service in December 1999, which has grown to be one of Openly's core products. Throughout its relatively brief history, Openly has regularly created new products and technologies that support the management and access of electronic content.

At the time of its acquisition by OCLC, Openly Informatics offered three key commercial products, of which two are related to electronic journal metadata:

  1. JournalSeek Linking Database—Consists of data that contains journal description data for more than 85,000 titles and the Link.Openly Server to compute links that can be used in conjunction with Openly's 1Cate LinkServer or other OpenURL-based linking environments.
  2. UHF (Universal Holdings Format) Holdings Data Service—A database in XML that Openly maintains to track the titles and coverage held by each of the major databases and ggregators.
  3. Openly developed the 1Cate (One Click Access to Everything) Link-Server—1Cate, a full-fledged OpenURL link resolver, competes in the same space as SFX from Ex Libris; LinkFinderPlus from Endeavor; and OL2 from Fretwell-Downing. The Sirsi Resolver offered by SirsiDynix is based on 1Cate technology licensed from Openly Informatics.

Commercial Entanglements

Unlike OCLC's recent acquisitions of Fretwell-Downing Informatics and Sisis Informationssysteme (which are operated as for-profit subsidiaries), Openly Informatics will be folded into the non-profit side of OCLC. Openly Informatics, does however, bring a variety of commercial relationships into OCLC it developed in its seven-and-a-half years as a private for-profit company. Openly Informatics had a number of commercial companies that licensed and resold its products and services to libraries and other organizations including:

  • SirsiDynix is based on Openly's 1Cate (One Click Access to Everything) OpenURL Link-Server technology.
  • Endeavor Information Systems entered into a partnership with Openly Informatics to license its JournalSeek knowledge database of electronic-journal holdings data and the Link.Openly technology as key components of its LinkFinderPlus OpenURL Link Server.
  • R. R. Bowker formed an agreement in January 2005 to use Openly's technology to power its Ulrich's Resource Linker product.
  • Swets Information Services relies on 1Cate technology for its SwetsWise Linker product launched in September 2004
  • In addition to its commercial offerings, Openly Informatics released a number of applications under Open Source licenses. These included OpenURL Referrer, a browser plug-in that enables OpenURL linking for items retrieved through Google Scholar.
  • EnCoRe: Enriching Courses with Reserves. A cooperative project between University of Derby in the U.K. and Openly Informatics. According to the project's Web site: “Course related requirements will be linked to internal and external electronic collections through a single interface using OpenURLs via journal linking software from Openly Informatics.”

Though Openly Informatics is a small company, its products and services find use in a large number of libraries by virtue of its relationships with some of the top-tier library automation and publishing companies.

Advantages to OCLC

OCLC's primary focus in acquiring Openly Informatics centers on using its data resources to enhance the capabilities of WorldCat to represent electronic content. According to OCLC VP Michael Teets, one of OCLC's key corporate objectives involves adding resources to WorldCat so that libraries can manage their electronic collections as well as they have always managed their physical collections. OCLC aims to help libraries deal with electronic resources on a level playing field with print resources. Although OCLC has long offered products and services that help libraries manage traditional resources, it has not been able to offer the same level of support for electronic resources. The content and technologies from Openly Informatics provide some of the components that will help it move toward those broad goals.

Advantages to Openly Informatics

As part of the OCLC fold, Openly Informatics finds itself in a large and stable organization with deep resources for research, development, and product support. This new relationship provides a less risky corporate environment relative to its former status as a very small independent corporation.

A number of synergies, too, will strengthen Openly's products. Data from WorldCat, for example, can be used to extend Openly's holdings databases. Areas not previously covered within Openly's knowledgebases—such as electronic monographs, digital audio books, and theses and dissertations—can be populated with data extracted from WorldCat. And, as libraries report any errors they discover, OCLC's large user base also provides the means to improve the data quality.

According to Hellman, “OCLC wants Openly to continue to do what we have been doing all along. Joining OCLC is very good for the customers of Openly Informatics. Our services will be strengthened under the ownership of OCLC.”

Competitive Concerns

OCLC's ever-widening activities in automation technologies—through the acquisition of companies—does not go unnoticed by the commercial companies in the industry. OCLC's three most recent technology-company acquisitions are well within the library automation competitive arena.

VTLS president/CEO Vinod Chachra expresses some concern about OCLC's acquisition strategy. “We congratulate OCLC on this acquisition and on the vision that this and other recent acquisitions represent. It is becoming clear that OCLC is moving aggressively to be the library portal behind the search engines of the world. This acquisition will make WorldCat more attractive and useful to users and to search engines like Google and Yahoo. We wish OCLC great success as they help increase the global exposure to libraries and librarians. We remain concerned, however, about the erosion of the competitive environment (through these acquisitions) and the long-term impact it might have on innovation.”

OCLC has great ambition to develop WorldCat as a global resource to help library users throughout the world discover and access the information resources that reside in its member libraries. OCLC's strategies require a wide suite of services and technologies, some of which it will develop internally; others will be gained through acquisition.

Today's economic climate favors consolidation, resulting in a fewer number of very large organizations within each business sector. As OCLC grows ever larger, it gains greater capabilities to promote library interests in a world in which commercial players encroach ever deeper into traditional library activities. OCLC's acquisition of Openly Informatics is a very small event in this picture. It becomes more significant when seen as just the latest in a series of acquisitions.

Chronology of OCLC's Acquisitions
Apr 1982Purchased Total Library System from The Claremont Colleges in California. HP/3000 based system.
May 1983Purchased Integrated Library System (ILS) purchased from Lister Hill Center of National Library of Medicine. Development of Local Library System discontinued.
Aug 1983OCLC acquires Avatar to assist in the development of LS/2000.
Jun 1983OCLC Launches LS/2000 library automation system.
Feb 1987OCLC acquires ALIS I and I software from Data Phase to be marketed under the new name of LS/2.
Apr 1990OCLC sells Local System Division to Ameritech Information Systems.
Feb 1991OCLC acquires UTLAS from Thomas Canada Limited.
Jun 1993OCLC Acquires Information Dimensions, Inc., from Battelle Memorial Institute.
Jul 1997OCLC sells Information Dimensions to Gores Technology Group. (IDI became part of OpenText in June 1998.)
Oct 1997OCLC acquires Blackwell North America's authority control service business.
Feb 1999OCLC acquires WLN.
Dec 1999OCLC and PICA enter joint ownership agreement.
Feb 2000OCLC acquires PAIS (Public Affairs Information Service).
Oct 2000OCLC acquires Canadian-based Library Technical Services.
Oct 2000OCLC becomes exclusive distributor for ILLiad software developed by Virginia Tech and Atlas Systems.
Jan 2002OCLC acquires netLibrary.
May 2002OCLC enters partnership with Olive Software.
Jun 2002OCLC enters into partnership with DiMeMa Inc. for CONTENTdm.
Aug 2004OCLC absorbs 24/7 Reference Service from Metropolitan Cooperative Library System.
Dec 2004OCLC sells PAIS to CSA.
Jun 2005OCLC PICA acquires Sisis Informationssysteme.
Nov 2005OCLC PICA acquires Fretwell-Downing Informatics Group.
Jan 2006OCLC acquires assets of Openly Informatics.
Publication Year:2006
Type of Material:Article
LanguageEnglish
Published in: Smart Libraries Newsletter
Publication Info:Volume 26 Number 2
Issue:February 2006
Page(s):1
Publisher:ALA TechSource
Place of Publication:Chicago, IL
Company: OCLC
Fretwell-Downing Informatics
Subject: Mergers and acquisitions
ISSN:1541-8820
Permalink: http://librarytechnology.org/ltg-displaytext.pl?RC=11862
Record Number:11862
Last Update:2012-12-29 14:06:47
Date Created:0000-00-00 00:00:00