Content pioneer takes a new tack

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Founded in 1989 before the advent of the World Wide Web, NewsEdge Corp. is looking to regain the edge it had as a pioneering syndicator of business news delivered direct to the desktop. Struggling for survival in the Internet age, the company has gradually abandoned its pure content play and is turning its news aggregating and customizing skills into marketing tools for corporations.

With today’s launch of ReachOut Mail, the company introduces an opt-in e-mail service that can help b-to-b marketers turn content into permission marketing tools to increase Web site traffic.

ReachOut Mail delivers tailored news headlines via a co-branded e-mail from NewsEdge and a marketer. The e-mail is only delivered to the marketer’s customers or prospects who have opted into the service. When customers click on a headline in the e-mail that interests them, they are immediately linked to the marketer’s Web site, where they can read the full story. The intention, NewsEdge said, is to increase not only Web traffic but to boost e-commerce.

‘‘When they [customers] click on a headline they’re deposited back to the site, wherever the organization wants them to go,’’ said David Scott, VP-marketing for NewsEdge. ‘‘So if there’s a news story about pacemakers, they could be put on the site where they can click on a button to buy a pacemaker.’’

Analysts say the move makes sense for NewsEdge, especially because of the rapid rise of permission marketing on the Internet. E-mail is on course to become the dominant form of b-to-b marketing, according to Forrester Research Inc. ‘‘By 2005 it will eclipse advertising,’’ predicted Forrester analyst Dan O’Brien.

Stock price plunge

The move to facilitating permission marketing is a shift for NewsEdge, which has seen its stock value suffer this year. Last week, the stock was trading at around $2.25 per share, well below its 52-week high of $12.88.

Even though the company’s customers included such blue chips as IBM Corp., Agilent Technologies Inc. and The Wall Street Journal, NewsEdge was listed as a company dangerously low on cash in the now infamous Barron’s article that helped trigger the dot-com sell-off in April, said Scott, explaining the plunge in the share price. More important, perhaps, the Web challenged NewsEdge’s business model, and the company was slow to rework its strategy.

NewsEdge’s original business model was simple: It syndicated business news, aggregating it and customizing it for corporations, government agencies and other large organizations. The news was delivered via local area networks to personal computers. ‘‘We were evangelists for putting news on the desktop,’’ Scott said.

The growth of the Internet, however, threatened NewsEdge’s business model, making customized business news on the desktop old hat. Today, Web sites as diverse as CBS and Yahoo!, through its My Yahoo! feature, allowed users to tailor business news on the desktop at no charge.

NewsEdge responded to the challenge by creating eTopics, which provides business news to a company’s Web site. The content, which comes from more than 600 sources, including The Associated Press, Dow Jones Newswires and trade journals, is available in 1,500 targeted categories. The service had 30 customers at its initial release in March and 125 by the end of July.

The new ReachOut Mail service is seen as a complement to the eTopic service. Both are central to NewsEdge’s new approach. ‘‘The new strategy is: How do we help existing clients get their clients to come to their Web site, and how do we help new dot-com organizations develop what they need to attract traffic?’’ Scott said.

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