April 9, 2013 12:04 am

Reed Elsevier to pay £45m for social network

Reed Elsevier logo displayed on a laptop©Newscast

Publishing group Reed Elsevier is paying £45m to acquire a social network for academics in its latest effort to adapt to the digital age.

Its acquisition of Mendeley – which allows academics to organise their journal articles and other content online and collaborate with other researchers – will provide the company with access to a community of 2.3m users.

Ron Mobed, chief executive of Elsevier, the group’s publishing division, said the deal “was part of an ongoing programme to increase the usability and functionality of our offerings”.

The deal price, which includes staff earn-outs, values Mendeley’s users at about £20 each. By comparison, Facebook’s current enterprise value is equivalent to about £35 for each of its users.

Reed Elsevier has strengthened its position in digital media in recent years, spending about £900m on acquisitions since 2010, while selling print assets such as Variety magazine. Print publications accounted for one-fifth of the group’s revenues last year, down from more than half in 2006.

Launched in 2009, Mendeley has proved more successful than Elsevier’s own collaborative software, 2collab, which was shut down in 2011. Mendeley says that 380m documents have been shared using its service, setting it apart from other citation software such as ProQuest’s RefWorks, Thomson Reuters’ Endnote and Zotero, produced by the George Mason University.

Users can upload up to 1 gigabyte of data to the service free of charge, but must then pay up to £132 a year for additional storage.

In a move to allay concerns that its acquisition of Mendeley might jeopardise the network’s collaborative ethos, Reed Elsevier has said it will increase researchers’ storage limits, without increasing their subscription fees. “We will continue to deliver Mendeley’s products in the way they’ve been delivered at the same price and with some improvements,” Mr Mobed said.

Mr Mobed added that Reed Elsevier would look to bring the service to its large institutional customers, as well, and add its expertise in searching academic platforms. “This is not just about finding something more quickly – it should lead to better decisions.”

Eileen Burbidge, a partner at Passion Capital, one of the venture capital firms that invested in Mendeley, said the deal was a sign of publishing companies “moving towards more accessible publishing”.

The service was conceived at the University of Cologne by doctoral students frustrated by existing programs. “Our vision was: can’t we have software that’s as user-friendly as a music player?” said Victor Henning, Mendeley’s chief executive.

The founders subsequently relocated to London after receiving support from Stefan Glaenzer, the former chairman of Last.fm.

Copyright The Financial Times Limited 2015. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.


Sign up for email briefings to stay up to date on topics you are interested in