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Major Shifts in Social Sharing Sites — Do Consolidation and Termination Mark the End of an Era?

Mendeley

Mendeley (Photo credit: AJC1)

Social sharing in the sciences may be ending its honeymoon phase. UniPHY has closed. Connotea is closing in March. Other sites like BioMedExperts seem to have become bolt-ons at the largest publishers.

And then there’s Mendeley.

Mendeley has been a juggernaut of marketing within the scholarly community — for 2-3 years, it seemed every meeting had a standard talk from Mendeley representatives boasting their adoption and usage figures. At the same time, many publishers have been watching Mendeley carefully — it’s a service that allows for the sharing of published content in a manner that seems to elude enforcement of copyright and licenses.

Over the past few years, Mendeley has been approached by some large players in scientific publishing — Nature, Thomson Reuters. The latest rumor is that Elsevier is in advanced talks with Mendeley about acquiring the firm’s assets for $100 million.

Elsevier has been friendly with Mendeley, having referred clients to Mendeley when Elsevier’s 2Collab was shuttered in 2011. This makes the rumor even more interesting — if Elsevier failed with its own social sharing initiative, 2Collab, why go back for another thrashing?

Elsevier has been acquiring software companies aggressively over the past few years. In August 2012, they acquired Atira, a company in Denmark which provides institutional repository software called Pure to higher education institutions. In 2010, Elsevier acquired Collexis, which provided semantic technology to scientific publishers and vendors. As part of this, they also were able to integrate BioMedExperts, a social portal for the sciences. Mendeley would fit well with this set of software and service acquisitions. Perhaps Elsevier’s strategic planners feel that timing and positioning both played a role in 2Collab’s failure. They may feel it’s time for a more comprehensive approach.

However, acquisitions change properties. The outcome of the Collexis acquisition is worth contemplating. Once the heart of a number of social sharing initiatives, Collexis has now been assimilated, as this text from the Collexis home page indicates:

In 2010 Elsevier, the leading global publisher of scientific, technical, and medical information products and services, acquired Collexis. Collexis’ semantic technology and solutions are now part of Elsevier.

This transformed Collexis from a market player capable of supporting a number of publishers into a captured Elsevier property devoted to supporting its owner. Its role in the ecosystem has been greatly diminished.

Mendeley is currently a relatively neutral platform that is populating a large ecosystem of apps through its APIs — APIs similar to ones Elsevier has tried to popularize through SciVerse, but much less effectively. While Mendeley’s APIs support 240 research apps, SciVerse supports about 100, or less than half. Are these 240 APIs worth $100 million? It’s unlikely. So what is the value of Mendeley?

Its main value seems to come from the large numbers it boasts about the documents, users, and sharing on its platform. But what is this worth? Currently, tens of thousands of dollars, based on revenue figures the firm has mentioned. If that’s the case, Elsevier would be paying a 1,500x multiple at the speculated price of $100 million. Suddenly, the quoted price tag seems like it must be off by at least two orders of magnitude.

Mendeley is currently selling data out of its system. Could Elsevier do this more effectively? Does it have corporate synergies that could make this 1,000x more valuable?

Other factors seem to argue against the possibility of an Elsevier acquisition, beyond the outrageous over-valuation a $100 million price tag would represent.

Will Mendeley become more popular as an Elsevier property? I think it’s unlikely, despite a statement made in an article about the possible acquisition in TechCrunch:

. . . the bulk of academics will be more inclined to use something owned by Elsevier.

I don’t believe academics care what Elsevier owns — it’s not a brand most scientists or researchers pay attention to. Those who do pay attention probably currently have a fraught relationship with the brand. Ultimately, the question will be more about value and relevance of any service Elsevier offers.

At least in the short-term, an acquisition by Elsevier seems likely to create headwinds for Mendeley. Things change when a small company is acquired by a larger one. Management processes and relationships change. Corporate cultures clash. But in the case of Mendeley, there are many things an Elsevier acquisition might alter within the marketplace, as well:

  • Deep pockets. Suddenly, Mendeley becomes a meaty target for legal challenges over unfettered sharing of copyrighted content — its owner would suddenly have deep pockets. Publishers who have forestalled legal actions based on the sharing of their articles and unauthorized reuse may rethink their stances. A lawsuit or two might emerge rather quickly. In addition, Elsevier has contracts with many partners. Beyond copyright and licensing, there could be plenty of contractual landmines.
  • Loss of renegade virtue. Lawsuits might also be more palatable because the sheen of virtue Mendeley has acquired as an idealistic and renegade startup would be gone. The PR downside of suing Mendeley is significant; the PR downside of suing Elsevier is comparatively small, if it exists at all. Beyond this, enthusiasm for Elsevier APIs, Elsevier data analysis of scholarly activity, and other Elsevier involvement in scholarly sharing may never materialize. Mendeley may hit a hard wall of user disenchantment if an Elsevier acquisition were to go through.
  • Loss of OA virtue. Being acquired by Elsevier, a company so often a target of OA rage and animosity, would create quite the pickle for OA advocates and Mendeley staff. The tacit help OA publishers like PLoS and BMC have given to Mendeley may evaporate. Initiatives like the Binary Battle, a co-sponsored development contest supported by Mendeley and PLoS, would not likely continue. Community support may shift quickly away. The technology is not the magic with Mendeley — the community reputation is the magic. The technology can be recreated; the community reputation is far more fragile. The community may want to shift to the next company that agrees with its ideals but is small and poor enough to be effectively immune to lawsuits and contractual entanglements.
  • Loss of advocacy angles. As an insurgent, an independent Mendeley could advocate for various approaches and take certain stances in the publishing community. Aligned with Elsevier, how would advocacy for things like the Reproducibility Initiative, PLoS, and other matters come across? Would it be accepted by the community as anything more than cynical big business posturing?
  • Alignment with a publisher. Technology companies have fewer constraints on them than publishing companies. The contracts, community, and expectations are very different. A publisher is expected to behave well toward other publishers, to respect the boundaries it would want respected itself. The conundrum of owning Mendeley may be too much for Elsevier to manage.

Of course, Elsevier will have thought through these matters, and is likely to have responses in place. Whether they are good and effective responses remains to be seen, assuming this proves to be more than a rumor. One response might be to fold Mendeley into Scopus and the agreements already extant for that service. However, those agreements might not be robust enough if challenged once Elsevier’s grand plans around meta-publishing sink in.

At this point, taking the rumor at face value, the potential acquisition of Mendeley seems fraught, over-valued (at the reported price of $100 million), and unlikely to retain its brand or technology value.

There is also the possibility that Elsevier is buying Mendeley to disassemble it. Perhaps $100 million is a relatively inexpensive price for a car that can later be sold for parts.

Elsevier has made successful acquisitions in the past, with Cell Press coming most immediately to mind. Springer’s acquisition of BioMed Central didn’t hurt that enterprise. But both of these — Cell and BMC — are traditional in the sense that the acquired companies process and publish content, just like their new owners. There was a basic family match. That’s a key difference.

In any event, we seem to be hitting an inflection point in the social sharing experiments in scientific publishing. UniPHY is no more. Connotea is closing. Mendeley may be purchased by the world’s largest scientific and academic publishing company. Academia.edu is much quieter than it used to be.

The days of wine and roses seem to be drawing to a close for social sharing in the sciences.

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About Kent Anderson

I am the CEO/Publisher of the STRIATUS/JBJS, Inc., the home of the Journal of Bone & Joint Surgery, JBJS Case Connector, JBJS Reviews, JBJS Essential Surgical Techniques, the JBJS Recertification Course, PRE-val, and SocialCite. Prior to this, I was an executive at the New England Journal of Medicine. I also was Director of Medical Journals at the American Academy of Pediatrics.

Discussion

15 thoughts on “Major Shifts in Social Sharing Sites — Do Consolidation and Termination Mark the End of an Era?

  1. Hmmm…
    I don’t think $100 million is overpriced (if that’s the true figure and its a cash figure). With 2.1 million users that about $47 per user. If you look at it from a data angle, is data on 2.1million academics worth $47 per user over a number of years? I’d suggest it’s not unreasonable. Also you’ve now bought the most serious looking disruptor and put them under the mothership’s control so that’s got to be worth a decent amount in adjusting risk factors over the next few years. If you were to look at what’s been built and think, “we need to build that” then there’s another tick in the pricing column. And I’d suggest that the University market for working out “just what our academics get up to and what the impact is” is one poised to take off over the next few years. Especially when I look at the UK requirement to demonstrate “impact” to society.

    Collexis might have been marketed as a social tool, but it wasn’t. It was a network analysis tool. Built by a company that couldn’t work out whether it wanted to be a tech supplier or some more complex partner and thus fell between two stools, satisfying neither.

    2Collab – nice idea, but in a closed ecosystem, these things struggle – that’s what we’ve learned about social platforms. I would assume that’s the lesson Elsevier have learned here. If they intend to keep Mendeley going as tool, they will have to keep it open. No doubt there will be integration with various other properties, but with the various api’s you don’t absolutely have to bolt the thing into the baseline infrastructure. I wonder what data they have on use of Elsevier properties via Mendeley…

    Lets go back to the data… The first mover advantage here is enormous. This is what we know about open digital properties – one thing suceeds and then starts to utterly dominate the landscape. You end up with a power law distribution of players. The network effect is great for the winner and not very good for anybody else. You don’t get a diverse ecosystem. The brilliant thing about Mendeley was that it gave its users something that took away a substantial chunk of pain and thus a compelling reason to come back and use the tool repeatedly. What competes with it? Its a superb workflow tool.

    I think you could build a very useful offering to take to societies as part of a package offering. In fact, depending on how bold you wanted to be, you could look at Mendeley as a next generation article discovery and delivery platform…

    To me the interesting question here is to what extent this is a meaningful cultural move from Elsevier. Does it indicate that they have gone on a journey from the horrible mistakes of SOPA and RWA to a more enlightened stance on where publishing is going? Are they trying to adapt to a changing environment and undergo something of a culture change. No matter what their PR tries to do, nobody puts the big E anywhere near the center of a position on Open Access. For now. But that could change. Springer grabbed BioMedCentral. That’s worked out Ok hasn’t it? Certainly didn’t hurt their reputation and arguably has insulated them from the worst of the ideological mud slinging. Elsevier look to be grabbing Mendeley. There’s a similar calculation there, surely.

    Posted by David Smith | Jan 18, 2013, 6:21 am
    • The obvious competition is EndNote, which is both ubiquitous and near-universally disliked, making it ripe for replacement.

      Posted by David Crotty | Jan 18, 2013, 7:48 am
  2. Some good points – I’m not sure I’d class Mendeley, Connotea or UniPhy as a “social sharing” enterprises first and foremost (or at all, in the latter two cases) though, so not sure about the headline. Don’t forget that the big user facing aspect of Mendeley is the desktop / mobile apps, not the website.

    Social sharing in the sciences is actually growing – more & more people share links to papers (between 5% – 7% more links a month, in the case of Twitter & Facebook) and more & more of those papers are on insitutional repositories and OA journals. It’s just not happening on specialized sites, probably for all the same reasons that have been posted about here and elsewhere over the years.

    I’d have thought Mendeley was more of a reference manager play w/ social aspects – one with a fraction of the market share of EndNote & RefMan, but still part of the workflow for many researchers. The opportunity to reach people while they’re reading or writing papers offline has a certain value (up to you whether it’s a $100M value).

    Getting into that workflow must have been part of the reasoning behind the SciVerse apps framework stuff so I guess it’s possible to see this as a continuation of that strategy.

    Posted by Euan | Jan 18, 2013, 6:51 am
  3. Elsevier are clearly building up their ecosystem, adding services to their content. No-one is imaging that Mendeley is going to become any more ‘open’ inside Elsevier, or that Elsevier will let content ‘leak’ through Mendeley. But they’re not Apple or Google, and it’s not clear any siloed offering that from them can gain enough support to gain genuine network advantages. (Even Apple couldn’t make Ping work.)

    I can’t see any realistic prospects for better social sharing services to support that social endeavour called ‘research’ on anything but open platforms (Twitter, RSS, Tumblr). Pinterest for researchers, anyone?

    Posted by lescarr (@lescarr) | Jan 18, 2013, 7:25 am
  4. Perhaps the relevant comparison here is when Google purchased YouTube. As soon as that happened, the lawyers suddenly appeared out of the woodwork launching all sorts of infringement suits. Add the further complication here that Elsevier, unlike Google, is a competitor to other copyright holders. But really, the redistribution of copyrighted material part of Mendeley is not essential to their mission, not really a core part of their value proposition to the user. It could easily be dropped and likely will be.

    Given that, as you note, Elsevier has purchased a company specializing in repositories, think of the possible combination here, with Mendeley serving as the front end for institutional repositories and on campus services for maintaining reference lists. Could be interesting. Or this could be, as you note, folded into Scopus. If you think in terms of altmetrics, and how the Impact Factor is a key part of Web of Science, this gives Scopus a similar, perhaps more forward-looking core to draw customers to Scopus.

    And that altmetrics question is worth asking here. What happens to altmetrics systems that include data from social bookmarking sites? They’ve clearly just lost one data source in Connotea, and who knows if a new owner will be as free and forthcoming as the current owners of Mendeley (particularly given their apparent strategy of building usage in order to sell the company off). What happens if those API’s are closed, or become part of a paid subscription service with terms limiting the resale of data?

    Add Springer into this discussion as well–they recently acquired the company that makes Papers, and have long been funding CiteULike (which oddly seems to have maintained its indie cred despite this association).

    Posted by David Crotty | Jan 18, 2013, 7:39 am
  5. Well, let’s see. Rumor had it that Mendeley would show up at publisher meetings and talk about wanting to be a partner and would show up at scientific meetings and talk about putting journal publishers out of business. I agree with Phil that copyright infringment lawsuits would be forthcoming. 100 million is way overpriced. Elsevier probably already has the users Mendeley has and once Elsevier puts this behind their firewall, usage will drop considerably.

    Posted by Angela | Jan 18, 2013, 10:28 am
  6. I am a little surprised to see no mention, in this context, of the Pubget purchase by the Copyright Clearance Center: http://corporate.pubget.com/ .

    Posted by alc28 (@alc28) | Jan 18, 2013, 10:34 am
  7. Here’s another thought–Mendeley is essentially a product that allows a researcher to organize information (reference management), and to share that organized information with others. If one assumes that funders are going to increasingly demand that experimental data be placed into repositories and made publicly available, wouldn’t this sort of system be a great front end for doing so? One could see a booming new business to be built along these lines, selling a system to institutions to meet those funder demands.

    Posted by David Crotty | Jan 18, 2013, 10:56 am
  8. Isn’t this just another step along the way for Elsevier in moving from being primarily a content provide to becoming mainly a provider of services? I thought that was the underlying logic for what Elsevier has been doing for years now.

    Posted by Sandy Thatcher | Jan 18, 2013, 11:39 am
  9. Mendeley offers a bunch of services to authors beyond copyright infringement; many of these services, such as metadata extraction, could be useful in Elsevier’s own production. Copyright agreements often allow authors, after a specified time embargo, to post their own papers. I’m sure E’s technicians and lawyers are smart enough to screen the incoming material. E will not be an easy mark for the legal eagles.

    The big gain for E is access to the information of a hugh number of authors, and a chance to develop a service relationship with them. If E is planning on being a service provider, this might not be such a bad move.

    Posted by Ken Lanfear | Jan 18, 2013, 1:59 pm
  10. I don’t think that there are 2.1 million researchers on Mendeley. There might be 2.1 million accounts or even 2.1 million people, but quite a number of these might be students and not authors. There is ambiguity around what we mean by “researchers”.

    Which is not to say that students’ records are not valuable data to have or their interactions are not valuable. Just that it’s not all about authors and their workflows. The student usage of Mendeley needs to be considered on slightly different terms and I think that Mendeley aren’t always clear about what they mean by “researchers”.

    Posted by Jenny Delasalle | Jan 23, 2013, 9:33 am

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