Profile: Dan Wagner - The fast talker learns his lines
Has the flamboyant chief of MAID finally won over a sceptical City? Dana Rubin reports
Sunday 31 August 1997
"It's good to accept you've made mistakes," says Wagner, who founded the on-line business information provider in 1984. "I've only had 13 years running a company. I've still got a fair amount of time to go."
This from a man criticised for years in the financial community for his flamboyant ways. But now Wagner - who has a pounds 35m stake in his pounds 219m company - needs the support of the finance sector.
For a company that has suffered two years of losses, sliding subscription revenues and a roller-coaster share price, the acquisition of a troubled business like Knight-Ridder Information might look ambitious. Its $250m (pounds 155m) revenues dwarf MAID's $41.6m.
Yet the response has been mostly favourable. "It's an audacious move just because it's so much money, and when it comes down to it MAID is still a small player," says Paul Blake, editor of the London-based Information World Review. "If they can pull this off, they're immediately catapulted into being a much, much bigger player."
In the world of on-line business information, MAID's competitors all come from publishing heavyweights - the Financial Times' FT Profile, Dow Jones' News Retrieval, Reed Elsevier's Lexis-Nexis, and Reuters' Business Briefing.
In the past few years Wagner has largely won over analysts and technology experts, but the mainstream still doesn't trust him. "People view him as a marketing guy, a motor mouth," says Keith Woolcock, technology analyst at Merrill Lynch in London. "He's really more like an American entrepreneur. He's not deferential."
It's no surprise that the acquisition of Knight-Ridder Information would raise questions, since the business is barely profitable. The Miami-based publisher is clearly eager to offload it. Knight-Ridder, committed to its core newspapers, could use the cash: in May, it and the Walt Disney Company spent $1.65bn buying four papers.
"Knight-Ridder has not been able to grow the business," Wagner says. "Revenues have been flat for many years. But there may be synergies that make a big difference." Analysts agree that if MAID's innovative technology and distribution can be married to Knight-Ridder's extensive databases and client list, it could be a sweet deal.
MAID - an acronym for Market Analysis Information Database - is essentially an electronic library that offers material ranging from company statistics and reports to stock market and commodity prices, agency bulletins and sector reports. Its databases are accessible on any personal computer, through the Internet, with no extra kit needed.
The chief asset MAID would bring to the link is its advanced technology and in particular its much-praised InfoSort software, a theme-based search system.
Like other information services developed before the PC and the Internet became household tools, Knight-Ridder Information has become something of a dinosaur. Unless it is fitted with new technology, it will not meet the rising demand from mainstream clients.
Yet Knight-Ridder Information has one thing MAID doesn't: content. It offers about 600 scientific and business data-bases used for archival research - researching a patent, for example.
In the media business, conventional wisdom is that content is king. MAID has been discounted because it collects and redistributes other companies' data - it doesn't generate its own. But if it takes over Knight-Ridder Information it will finally gain the bargaining chips it needs to bid against its rivals.
Armed with Knight-Ridder's resources, MAID could win more clients in the US, the world's largest market for business information. With cash flow of $46m, Knight-Ridder doesn't have to earn much to generate money for MAID.
Wagner has made some clever recent moves, including a deal with the US- based Frost & Sullivan, one of the world's largest market research companies, giving Maid exclusive rights to its reports. MAID signed an agreement to make its Profound database available over BT's new Intranet Complete service. It has technology alliances with Microsoft, IBM, Nokia and AltaVista, and in two years has signed distribution agreements with CompuServe, 4th Network, South China Morning Post and Fujitsu. The company is also launching LiveWire, for which 28 news wires have agreed to provide MAID with real- time news.
However, instead of endearing him to the financial community, Wagner's pink cheeks, slicked-back hair and impossibly wide grin have made him seem boyishly over-eager. It doesn't help that his finance director, David Mattey, is a 35-year-old former model who favours Armani suits.
Last summer MAID's management team was beefed up when Derek Smith, a former Economist Group director, joined as UK managing director, a move that may have placated some investors. "I think they will take comfort from the fact that there is a grey-haired bugger of 50 looking after the shop," Mr Smith said at the time.
Wagner often says people do not take him seriously because of his age. One who did was his father, John Wagner, who ran the UK divisions of Volvo, Volkswagen and BMW. Wagner gave his young son early commercial training, rewarding him with 10p for quickly naming the brands of commercials on television. At 16, Wagner left one of London's leading private schools, University College School, because he was bored. He became a salesman for Richer Sounds, Julian Richer's hi-fi chain, and then a junior account executive at Wight Collins Rutherford Scott (WCRS), an advertising agency.
Assigned to do some research, he was pawing through piles of journals and press cuttings when he hit upon the idea of making market information electronically available. He spent a year raising money for hardware, developing software and coaxing information providers to supply their reports.
Wagner was 21 when he launched MAID in 1984. It took five years to reach significant sales. MAID now has about 4,700 corporate clients, 23 sales offices around the world and a staff of 400. It is quoted on Nasdaq as well as on the London exchange.
Although MAID is based in London, Wagner makes no secret of his preference for the American way of doing things. It suits his hard-driving, fast- talking personal style. "We're straightforward," he says. "We ask for the order instead of sitting there asking for a cup of tea. People call it arrogance."
Wagner has never quite lived down the infamous moment in 1993 when, on the eve of MAID's flotation, he showed up for a press photo in a Donald Duck waistcoat. The picture was deemed highly inappropriate by the financial community. Some analysts said it wiped at least 10p off the offer price, sinking it to pounds 89m from the anticipated pounds 100m. "It's ridiculous," Wagner says. "I've learned there's no point in bucking the system. If people don't like me wearing a colourful waistcoat then I won't."
Then there was the newspaper profile in which he sounded like a cross between Gordon Gekko and Genghis Khan. "I'm power mad - I'm a megalomaniac," he said.
Wagner has blamed the bad press on a City conspiracy, calling negative reports "a web of fabrications". Today he's more inclined to be humble. But Wagner's biggest problem may still be Wagner himself. "He's a born salesman. His way is to hype his company and talk it up," says Woolcock of Merrill Lynch. "He tries harder and harder to be taken seriously. The harder he tries, the more they tend to think he's not a serious person."
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