Dan Wagner, chief executive of The Dialog Corporation, did the usual round of meetings with UK analysts yesterday and reported mid-term net income up from 822,000 pounds to 5.8m pounds on revenues that rose from 14m pounds to 88.7m pounds. But the analysts gave the thumbs down and shares slid 13% to 161.5 pence. In its old guise as MAID, the company had an unimpressive record but on top of a new name, Dialog’s prospects have been transformed by its acquisition of US company Knight Ridder Inc’s online information business. What made the analysts frown this time is what they see as the slow progress in digesting Knight Ridder. For its part, Dialog claims to have cut the 86m pound operating cost base of the two former companies by 33% – or 28m pounds. What Dialog has concentrated on since then is repackaging and selling the acquired products and improving relationships with customers. To boost and smooth out revenues, it has been pushing flat fee contracts, which now total more than $60m. Dialog has also been using its technology to launch new products and has scored wins for a National Exporters Database for the UK government and a five-year contract from the British Broadcasting Corporation for an electronic news cuttings service. Dialog has also recently put its toe in the water of e-commerce with a Planet Retail comparison shopping service and next year plans to use its present customers base to move into the business to business market. However, Knight Ridder’s CEO Jeff Galt and CTO Marck Shipley have now both quit the Dialog board and Dialog’s detractors clearly believe the company’s ambitious strategy will come unstuck.
