September 25, 2000

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Keeping An 'I' On The Competition

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Competitive-intelligence professionals tend to use online updating services, such as those found at Company Sleuth, that automatically E-mail users information such as SEC filings, news releases, and patents related to companies they're following. Web sites such as Company Sleuth have started focusing attention on competitive-intelligence users, according to co-founder Ram Mohan, who's also VP of Company Sleuth's parent, Infonautics Corp. in Wayne, Pa. He says his company's E-mail alerting system is in demand by competitive-intelligence users and others, and sends more than 500,000 E-mails daily to subscribers. The company had 600,000 registered users as of January, a tenfold increase since January 1999. Mohan says the site spends $1 or less to acquire each user and takes in revenue of $2 per user through advertising and offers with advertisers, such as Investors Business Daily, that want to target a specific demographic. The company doesn't break out financial figures; Mohan says the site is profitable.

When Mohan co-founded Company Sleuth in August 1998, his idea was to track the digital trails companies leave on the Internet. By tracking these footprints, users can piece together an ever-growing body of information about the company, including patents, links to customers, litigation, intellectual property, and corporate speeches. For example, Mohan's computers routinely track new domain registrations. "We saw that Daimler-Benz had registered Daimlerchrysler .com the night before the merger hit the street." In another instance, they came upon variations of a SkyTel-WorldCom URL weeks before any announcement of a merger between the two. In February, Company Sleuth found that Amazon.com had registered Amazongreetings .com and Amazoncard.com. This was an early warning--two months early, to be exact--that Amazon.com was about to enter the online-card business.

Longtime company-information source Hoover's Inc. has gone online and is catering to competitive-intelligence clientele, too. "Our databases are a natural for CI," says Laura Raun, executive producer of the companies and industries channel for Hoover's Online, which covers 52,100 businesses--15,400 public companies and 36,700 private companies, government-owned entities, consortiums, and not-for-profits. Information on private companies is the Holy Grail for many competitive-intelligence personnel because there's a dearth of information about these closely held entities. "These are our family jewels," Raun says. "It's taken 10 years to build our database of private companies."

By midyear, Hoover's Online had 2.8 million unique users and 248,000 paid subscribers. The site offers free and paid levels of service: Registered users have access to E-mail, news, portfolios, stock tools, and other information for free, while paid members can go deeper into Hoover's databases. Individuals pay $14.95 a month or $124.95 a year; business fees are negotiated.

An interesting members-only feature is Business Boneyard, a collection of profiles of companies that have gone out of business through bankruptcy or merger. In the belief that these profiles still contain useful kernels of information, the site notes: "We took the time to profile these companies; somebody should be able to read them."

Raun says Hoover's Online is expanding its database of European companies. Because U.S. companies are bound by regulation to be more transparent than their foreign counterparts, competitive-intelligence personnel have a harder time getting information about overseas businesses. Raun also says Hoover's is working to expand its biographical information of upper-middle managers. "This area is ripe for development," she says. "There's not much information about managers except for those at the top."

To Helene Kassler, director of library and information services at competitive-intelligence pioneer Fuld & Co. in Cambridge, Mass., the Internet's greatest use is in finding relationships among companies that aren't readily apparent, and gleaning information from them that could be used for competitive advantage. In doing work for a beverage company, for instance, she found that a supplier for one of her client's competitors had included a success story about the competitor on its Web site. The story, which even showed photos of the competitor's assembly line and cardboard-packaging area, revealed details about the rival company's processes that provided Kassler with significant clues about its packaging methods. "It was a relationship we didn't know existed," she says. "We just followed the links."

Career sites are another fertile ground. "We've had lots of success with job postings on CareerPath.com and Monster.com," Kassler says. Career sites not only offer nuggets about the listing companies, such as what programs they need people for, but also about the applicants. Kassler says checking resumés often gives clues about what programs and projects applicants' previous employers are involved in. "Resumés often contain company client lists," she says. Budget figures for specific projects are included when applicants brag about their backgrounds and accomplishments.

One of the newest competitive-intelligence frontiers is the exploitation of what's been labeled "the hidden Web" or "the invisible Web"--online databases that aren't indexed or cataloged on search engines because they may be located behind a Web site's CGI script, where spider programs can't reach. Hidden Web pages are prime information sources and promise a competitive edge because they're so difficult to find. Although he's not a competitive-intelligence practitioner himself, the work of Gary Price, a reference librarian at George Washington University's Ashburn, Va., campus has caught the eye of competitive-intelligence professionals. They're impressed with Price's List of Lists (http://gwis2.circ.gwu.edu/~gprice/listof.htm), a compilation of about 700 esoteric databases. The site includes an eclectic mix of lists, and gets more than 1,000 hits a day. Price's new direct-search list (http://gwis2.circ.gwu.edu/~gprice/direct.htm) offers access to thousands of hidden Web pages through links such as the Boston Health Inspection Restaurant Search and Briefs as Filed By Solicitor General Office (United States Dept. of Justice). Price says federal government information, which is difficult to find because of its sheer volume, may get a boost from FirstGov (http://www.firstgov.gov), a Web site slated to debut this fall that promises one-stop shopping for federal information.

One issue that concerns competitive-intelligence specialists is the quality of Web information. The opportunity for mistakes and misinformation is huge. "People must realize that the Internet is only as reliable as any other source," says SCIP's Bryant.

Nowhere is skepticism needed more than on message boards, in chat rooms, and in newsgroups--all of which offer lots of tidbits on competitors but little in the way of corroboration. Message boards can contain everything from attempts by disgruntled employees to hassle their companies to workers or users soliciting fixes for new-product troubles. "We search our competitors and products through newsgroups all the time because people talk about trouble with new products. Of course, it all has to be validated," says Clampitt. Competitive-intelligence practitioners know that problems with Microsoft products, for instance, often are aired in newsgroups first. They cite recent online discussions among hackers who discovered a security hole in Outlook.

It's become standard operating procedure to check sites whose URLs end with "sucks," such as http://www.homedepotsucks.com and http://www.chasebanksucks.com, for the latest rant or rumor. So important is the information on these sites--to targeted companies and their competitors, though for very different reasons--that many companies register unflattering domain names related to their businesses in an effort to thwart detractors. For example, Procter & Gamble Co. registered http://www.febrezekillsbirds.com to help quiet talk that the upholstery cleaner was harmful to birds. Bell Atlantic, which merged with GTE to form Verizon Communications, owns http://www.bellatlanticsucks.com, .org, and .net.

While the Internet has made life easier for competitive-intelligence practitioners in many ways, it also poses new challenges. Analysis, the second step in the intelligence cycle, involves turning the raw information found on the Internet into intelligence or knowledge before it can be used to make decisions. If we all have access to the same information at the same time, only the analysis separates us from our competitors. Professionals in the field agree that this is the hardest part of the job. "Everyone has access to the Net, so CI people must be more sophisticated," Monsanto's Timm says. "You can't repackage stuff from the Web and get away with it."

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Illustration by Brian Stauffer
Photo of Price by Danuta Otfinowski

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