Reed Elsevier: CEO resgins, trading statement disappoints

graeme at 10:05 a.m. Wed 11 Nov 2009

The CEO of Reed Elsevier, Ian Smith (that really is an unfortunate name) has resigned. He appears to be the scapegoat for Reed’s ppor performance, which is really the result of the recession. It may also be that the first cracks are showing in Reeds business model.

The trading statement can be summed up as, all businesses declining, and they are expected to continue declining in 2010.

This is not too bad for a cyclical business, but Reed has other problems. It is primarily a distributor of information, and the internet has changed the game. Its lucrative academic journal business, in particular, is threatened by a gradual move to open access.

Its other businesses do not face as obvious a threat, but, even there, things are different: Barriers to entry are lower and there are more alternative sources easily available.

Reed has a short term problem, and a long term one, it may have good prospects for the medium term with a return to growth in late 2010 or in 2011.

We need user contribution, so please suggest stories/links

Comments

You need to login or register to comment