Magazine article Information Today

A Dialog with Dan Wagner: The Dialog Corp.'s Chief Addresses the Future

Magazine article Information Today

A Dialog with Dan Wagner: The Dialog Corp.'s Chief Addresses the Future

Article excerpt

Dan Wagner made headlines and quite a name for himself when he pulled off MAID's acquisition of Knight-Ridder Information and its DIALOG and Data Star products. Wagner, now president and CEO of the Dialog Corporation, spoke with Richard Poynder recently.

Q Was the Dialog acquisition the only way forward for MAID?

A No. MAID had not reached the end of its way as a stand-alone business--we were growing extremely fast and making considerable headway. However, I felt that the market was consolidating and that we were likely to be destined to form part of a larger group; over the last 12 years, for instance, we have been approached by a variety of suitors. So when KRI [Knight-Ridder Information] was put up for sale, it was an opportunity I couldn't resist.

Q To do the deal, though, you have incurred debts of around 180[pounds sterling] million (approximately $292 million). You're going to have to grow fast, aren't you?

A No. All we would need to do is manage on a more cost-effective basis, although obviously we anticipate growing. MAID was growing at 55 percent compound annual growth over the last few years; KRI was growing at about 4 percent. If we maintain these rates we can certainly cover all our debt and have plenty of headroom to spare. Q And in order to manage more cost-effectively you have reduced staff numbers, haven't you--shedding around 25 percent of the work force?

A Yes, although in fact 120 were lost through attrition prior to the deal going through, and we have subsequently shed a further 330. So the payroll for the combined group is now just over 1,000.

Q In circumstances like this it is important to maintain the morale of those employees that stay. In Mountain View, for instance, around half the workforce were laid off, weren't they?

A You're right. And we are doing everything we can to encourage members of the company. It has to be borne in mind, though, that in 1994 KRI had a staff of 688, and sales of $265 million. Between 1994 and 1997 employee numbers grew to 1, 100 on sales of $289 million. It is difficult to justify that growth in human resources.

Q The acquisition of KRI was sold to the City [the London financial markets] as a synergy of MAID's software expertise--its InfoSort technology--and KRI's content warehouse. Is that accurate?

A Is That was a simplistic way of putting it--the City wouldn't understand the complexity of the information business. IT readers clearly do, so I'll clarify: The professional environments of DIALOG and DataStar suit and meet the needs of the professional searchers. They do not require InfoSort. But InfoSort does have considerable value to the end user because it organizes material from diverse databases into a common format.

A What will the acquisition mean for users?

A Users can expect the same level of quality customer service and product offering that they have grown to expect from KRI over the years. The DIALOG and DataStar classic services will remain, and be enhanced, and there will be new end-user products introduced over time. So we hope to tap into the growth area of the market, while at the same time maintaining our core information professional customer base.

Q So there is a definite commitment to keep both the DIALOG and DataStar proprietary services?

A Yes. They may not be located in the same place. But users will still be able to use the services they know and love.

Q How will DIALOG, DataStar, and MAID be integrated?

A Our salespeople will be selling two product groups. The first is the interactive products, consisting of Profound and Dialog Select. The second is intranets and groupware.

Q Where do DIALOG and Data-Star fit in here?

A In order to use these services you really need to be a qualified information professional. These people are trained on the services in the library schools, so we don't feel we need to sell to them. …

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