A Market Whose Time Is Still to Come; Eastern Europe Is a Region Full of Enthusiasm for Online Information

By Poynder, Richard | Information Today, May 1998 | Go to article overview

A Market Whose Time Is Still to Come; Eastern Europe Is a Region Full of Enthusiasm for Online Information


Poynder, Richard, Information Today


Eastern Europe is a region full of enthusiasm for online information

Companies keen to grow their business are always on the lookout for new markets. No surprise, then, that from the moment the Berlin Wall came down, longing glances have been cast towards the liberalized business environment developing in Eastern Europe. But what is the current state of the information market in the region, and what are the opportunities for online providers?

To talk about the whole of Eastern Europe in one breath, of course, is to imply a homogeneity that is far from being the case. As sales and marketing director at LEXIS-NEXIS Europe David Lennon points out, "It is very, very different from one economy to the next."

Thus while it is extremely hard to sell online information in many parts of the former Soviet Union, other parts of Eastern Europe are more receptive. "The Czech and Slovak Republics, Slovenia, Croatia, and Hungary are the countries where we are most successful with our online services," says Sjoerd Vogt, who has responsibility for emerging markets at The Dialog Corporation. Nevertheless, he adds: "In financial terms Eastern Europe is only a small part of our business. Online revenue from Belgium, for example, would be more than the whole of Eastern Europe put together."

In fact, online hosts have been selling into Eastern Europe for many years, generally with a mixed response. But when the old regime collapsed, the situation actually deteriorated rather than improved. "Before 1990, much of the online usage was through large government-control led central bodies," explains Vogt, "but during the 1990s the role that these central bodies played has largely disappeared. In the short term this actually meant that online usage dropped in many countries."

The National Technical Information Centre and Library in Budapest, Hungary, experienced just such a change. "We used to be a central institution for almost all search activities in this country," says the director, Peter Szanto. "But the situation has changed dramatically, and access to online hosts has been seriously dropped, with the password holders decentralized."

"You have to bear in mind the partly devastating restructuring of the economy, which is still taking place," explains Borut Justin, a consultant working for Slovenian-based information broker JUSTINFO. "Previously, large industries had their research departments. They had budgets, and they used information services, including online hosts. Today most of these companies have gone. Those who used to ask for online services are scattered to small firms and self-employment. The information market, therefore, will need some time to revitalize itself here."

The impact of decentralization, however, is just one of a number of hurdles confronting providers hoping to sell into Eastern Europe. "Due to the economic situation, as well as technical problems associated with telecommunications and a lack of hard currency, conditions remain rather difficult in Eastern Europe," explains Klaus Lankenau, manager of international sales at FIZ Karlsruhe, the European operator of the STN service.

The poor quality of the telecoms' infrastructure is an issue highlighted by most commentators. Again, however, it would be wrong to imply that the situation is uniformly bad in Eastern Europe. Thus, while some of the telephone lines and switchboards in Bulgaria date back to 1938, Slovenia can boast an infrastructure that many in the U.S. might envy. As Justin points out, there are some 20,000 ISDN connections in this small country of just under 2 million inhabitants. In addition, he says, "ATM is being tested, with two or three lines between major cities operational, and trunk lines are being transferred to optical at a great pace."

The situation is not dissimilar in Croatia. "The telecommunications infrastructure is not an obstacle here," insists Maja Jokic, head of the Scientific Information Service at the National and University Library, in Zagreb.

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A Market Whose Time Is Still to Come; Eastern Europe Is a Region Full of Enthusiasm for Online Information
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