[Content] in the [Emerging] World of Digital Natives Matthew Hong Vice President and General Manager - Open Web Markets ASIDIC Fall Meeting September 11, 2006

2 Background: About Thomson Gale A leading provider of reference solutions, electronic research and educational publishing for libraries, schools and businesses.

3 Business-to-Business-to-End User Business Model Distinguishing Characteristics:  Human Sales Force  Enterprise Customer  Customer ≠ End User Traditional utilization of this business model has caused some companies to have less than ideal knowledge of the behavior of end users of their products and services.

4 Open Web Business Model Distinguishing Characteristics:  Internet Sales Channel  Direct to End User; No Enterprise Intermediary  Customer = End User Movement to the Web and a more consumer business model necessitates a new/renewed focus on end user behavior.

5 End User Segmentation: Digital Immigrants v. Digital Natives  Digital Immigrant: Individuals who were not born into the digital world, but have emigrated to it. Secondary speakers of the digital language of computers, video games and the Internet.  Digital Native: Individuals who were born into the digital world. Native speakers of the digital language of computers, video games and the Internet.  Generation Y, Millennials, MyPod Generation: Generation of individuals born from 1978/1982 to Current age range is 6 – 24/28, and current population in the U.S. is approximately 76 million. Sources: Marc Prensky, Digital Natives, Digital Immigrants; Howe and Strauss, Generations: The History of America’s Future, 1584 to 2069 The world of Digital Natives is no longer emerging or non-core. It is both here and now and a significantly sized customer segment.

6 Differences in User Behavior Digital ImmigrantsDigital Natives Prefer to access information in a linear manner from limited sources Prefer random-access, linked information from multiple sources Prefer singular information processing and tasking Prefer parallel information processing and multitasking Prefer processing text before images/graphics, audio and video Prefer processing images/graphics, audio and video before text Prefer to work independentlyPrefer to interact and network simultaneously with many others Source: Marc Prensky, Digital Natives, Digital Immigrants The recent digital revolution has helped to create new and distinct behavior among certain end user demographs.

7 Traditional Value Chain for Information Offerings Content Workflow Solutions Tools The components of the traditional value chain still apply; however the makeup of each of the components is shifting.

8 Content and Digital Natives Source: Pew Internet and American Life Project  Content Creators 57% of online teens create content for the internet oMySpace oYouTube oFlickr 62% of content viewed by online users under the age of 21 is generated by someone they know Shift in content from authoritative to user-generated.

9 Tools and Digital Natives  Personalization and Expression My Yahoo! RSS Avatars  Storing Purchase history and Search history (default) Furl and Google Notebook  Tagging Yahoo! MyWeb, Flickr and del.icio.us  Collaboration and Sharing Wikis Instant Messaging Virtual study groups Shift in tools from search and directory functionality to personalization & expression, storage, tagging and collaboration & sharing.

10 Workflow and Digital Natives Sources: Pew Internet and American Life Project, School Library Journal, TechCrunch, Dallas-Fort Worth Star-Telegram (June 26, 2006)  Internet as Primary Resource 71% of students reported using the Internet as the major source for their most recent school project  Internet as Workflow Solution Google, Wikipedia and Facebook are used heavily; traditional educational offerings are often ignored and excluded from the workflow: o73% of college students reported using the Internet for research more than the library oAbout 85% of students in supported colleges have a profile on Facebook (60% log in daily, 85% log in at least once a week) oLess than 20% of students reported using the installed Blackboard LMS Traditional information offerings are failing to integrate themselves effectively into the current Internet-based workflow.

11 Where does that leave us? Summary and preliminary conclusions: 1.Move to Web creates need for better understanding of end user behavior 2.World of Digital Natives is already here and a new core market 3.Digital revolution has created new and distinct end user behavior 4.Components of traditional value chain still apply; the makeup of each component is changing 5.Growing disconnect between traditional information solutions and user behavior of Digital Natives:  Authoritative v. User-generated Content  Web 2.0 Tools  Internet as the Workflow 6.Offer options or market segmented offerings based on different end user demographics and behavior 7.Continue to focus on, develop and utilize core competencies and differentiators