EBSCO Industries, Inc. History

Address:

P.O. Box 1943
Birmingham, Alabama 35201-1943
U.S.A.

Telephone: (205) 991-6600
Fax: (205) 991-1479

Private Company
Incorporated: 1943 as Military Service Company
Employees:4,000
Sales:$1.25 billion (2000 est.)
NAIC: 23311 Land Subdivision and Land Development; 314999 All Other Miscellaneous Textile Product Mills; 332994 Small Arms Manufacturing; 42191 Sporting and Recreational Goods and Supplies; 51114 Database and Directory Publishers; 514199 All Other Information Services; 51421 Data Processing Services; 54186 Direct Mail Advertising; 54189 Other Services Related to Advertising

Company Perspectives:

We guide ourselves with seven values: Customer First--Our jobs and our company's future come from the customer. Sales--We communicate, educate and persuade to offer our products and services as far and wide as the market opportunity exists. Growth--We are committed to finding and growing revenues and business activities. Profitability--Profits provide the resources to maintain operations, to invest to improve them, to develop new opportunities and to ensure a financially secure organization. Engineering--We must constantly seek to identify and to develop ways to realize opportunities and to change shortcomings. Thrift--The need for economy stands as an eternal verity. People--People make the difference when they work together as a knowledgeable, productive and motivated team with mutual respect for one another. We are thankful for our historical progress. We are inspired by our opportunities. We will continue to seek improvement and growth. Key Dates:

Key Dates:

1937:: Elton B. Stephens buys a Keystone Readers' Service franchise.
1943:: Stephens and his wife, Alys Robinson Stephens, form the Military Service Company to sell magazines and personalized binders.
1971:: J.T. Stephens replaces his father as company president.
1972:: EBSCO doubles its size through purchase of the Franklin Square Agency.
1987:: EBSCO publishing division launches its first title.
1997:: Sporting goods lines start growth by acquisition.
1998:: Document Services division shuts down; EBSCO Online is introduced.
1999:: EBSCO breaks ground on its Shelby County, Alabama residential development.

Company History:

EBSCO Industries, Inc. is a diverse and international conglomerate that built itself on magazine subscription services. As technology has advanced, the company has become a leader in supplying information to libraries through its CD-ROM products and online services. EBSCO also manufactures such diverse items as fishing lures, hunting rifles, and promotional products.

Selling Magazines, Then Anything: 1930s-70s

When Elton B. Stephens graduated from the University of Alabama School of Law in 1936, he figured he could earn ten times the salary of a lawyer by selling magazines. Selling was not new to Stephens. Growing up in a poor family of eight children in rural Clio, Alabama, Stephens told Forbes he spent his youth selling "everything I could get my hands on." He had paid for college selling magazines door-to-door and selling socks and shirts in a dry goods shop. Though he was an enthusiastic salesman, Stephens told Forbes he hated selling magazines door-to-door. "You'd get the door slammed in your face. You'd get cussed at by husbands. You had to bounce back." Nevertheless, he went on selling and eventually hired others to sell for him. By 1937 Stephens purchased a Keystone Readers' Service franchise.

During World War II, Stephens realized the great potential for success in selling to military bases, and in 1943 he and his wife, Alys Robinson Stephens, had invested $5,000 into their own partnership, the Military Service Company, which sold magazines, personalized binders, and racks. When Keystone fired Elton Stephens for spending too much time with his own company, Stephens offered the publishers who had supplied Keystone better terms and took their business. Stephens' treatment of Keystone became typical of his management style. If a supplier impeded the progress of a division, EBSCO would start its own venture or acquire another to replace it.

Stephens's desire to make his business as effective as possible and his youthful drive to "sell anything he could get his hands on" set the stage for EBSCO's growth. In an interview with Forbes, Stephens estimated that he launched between 60 to 80 companies over his 60 years in business, noting that 30 percent of them had failed. He recalled telling someone once "that I'd like to have five companies. That way, if one or two of them don't make it, I'll still have something to hang my hat on." By the 1990s, EBSCO would be active in 28 industries.

Stephens started his company with the idea that he would work on an all-cash basis, and for 20 years he managed his company without a long-term loan. With cash on hand, Stephens formed Metal Fabricators and Finishers to manufacture display stands, Vulcan Binder and Cover to make binders, and Vulcan Enterprises to provide community-related messages for binder covers; he purchased Hartsfield Printing Company to supply personalized stationary to the military, and acquired Hanson-Bennett Magazine Agency of Chicago and National Magazine Company of San Francisco. By 1964, Stephens had learned that loans help businesses to grow and thus took on EBSCO's first long-term debt. Remembering a lost opportunity because of his reluctance to take on debt, Stephens told Forbes "Had I done that, I would probably be worth another three or four million dollars. But I'm not."

Nevertheless, since the 1960s, EBSCO--so-called after the initials of its founder's name along with the abbreviation for "company"--continued to grow, as did Stephens's fortune. In 1971, Stephens turned over EBSCO's presidential duties to his son, J.T. Stephens. Under the leadership of J.T. Stephens, EBSCO flourished. One year after taking the presidential position, J.T. Stephens saw EBSCO's sales volume double with the purchase of Franklin Square Agency, Ziff-Davis's international subscription service. Like his father, J.T. Stephens seemed to be comfortable selling just about anything.

While the company remained focused on maintaining the prominence and leadership of its magazine subscription division, it broadened its base of operations to include unrelated industries such as National Billiard, Fine Craft Carpets, and PRADCO, the country's largest manufacturer of fishing lures. Elton B. Stephens remained as chairman of EBSCO, overseeing the company's charitable contributions and profit sharing investment trust. In 1981, he started his second career as a banker, launching Alabama Bancorp.

Information Leaders in the 1980s

To maintain its leadership in the magazine subscription services industry, EBSCO was sensitive in its role as an information handler. EBSCO researched the needs of each of the different types of libraries it serviced: academic/research, law, biomedical, school, public, and special/corporate. Staff members organized seminars and forums to create a mutually beneficial working relationship with customers, seek electronic connections between EBSCO and automated library systems, and develop special reports that aided libraries in analyzing their journal collections. EBSCO employees also helped develop library communication standards and supported the library profession through membership and active participation in the American Library Association, Medical Library Association, Special Libraries Association, National Information Standards Organization, Serial Industry Systems Advisory Committee, and the International Committee on Electronic Data Interchange for Serials. EBSCO strove to make subscription management as easy and efficient as possible. To that end it developed the world's first online data communications network for serial management. Developed in the late 1970s to connect all EBSCO Subscription Services regional offices with the central computer in Birmingham, in the 1990s EBSCONET acted as a link between EBSCO and customers worldwide. Customers could place orders and claims, order missing issues, search EBSCO's title database, send e-mail to EBSCO or other EBSCONET users, review their list of subscriptions ordered through EBSCO, access the Internet, and search for and order individual articles through the CASIAS (Current Awareness Service/Individual Article Service) option.

EBSCO's understanding of the importance of accessing information quickly and easily helped it become one of America's leading producers of CD-ROM reference products. In the 1980s, EBSCO Publishing was formed to combine two acquisitions, Popular Magazine Review--a publisher with abstracting and indexing capabilities which EBSCO renamed Magazine Article Summaries in 1987, and Horizon Information Systems, a producer of CD-ROM search and retrieval software. EBSCO Publishing's first product was The Serial Directory: An International Reference Book. The archives of Magazine Articles Summaries were converted to electronic format and published on CD-ROM in 1989.

EBSCO Publishing was the first to provide abstracts and keyword searching to full text or general magazines in electronic format. In 1993, Carol Tenopir and Péter Jacsó noted in a study for Online that given a choice between indexes with or without abstracts they thought most users would choose those with abstracts "every time." The leading CD-ROM indexes for the layperson in 1993 were H.W. Wilson Company's Readers' Guide Abstracts, UMI's Periodical Abstracts Ondisc (and its subfile, Resource-One), and EBSCO's Magazine Article Summaries. Tenopir and Jacsó attempted to differentiate between these competitors based on the quality of their abstracts. The authors looked at the consistency of style and readability in the abstracts, the extent to which the ANSI standard (The American National Standards Institute's standards for abstracts developed in 1979) was observed, and the informativeness of the abstracts. Readers' Guide Abstracts best met the test for informativeness and were two-and-a-half times longer than the others. The Magazine Article Summaries abstracts were very brief, but described the information in the article. The authors noted that EBSCO did not claim to offer full abstracts but rather summaries of articles.

Such a test might not indicate the desires of those who use indexes, however, and that was the market EBSCO desired most to please. Tenopir and Jacsó wrote that some instructors and librarians preferred "an index with shorter, less informative abstracts because they didn't want students to rely on abstracts without having to go to the original article." Indeed, EBSCO's customers were the center of product development. Joseph Tragert, EBSCO Publishing's manager of product development, remarked in Information Today that "our objectives for 1996 are a direct result of focus groups, surveys, communication with industry professionals, and feedback from our customers and our sales team regarding the needs of libraries." In describing the product development cycle at EBSCO Melissa Kummerer noted in CD-ROM Professional, "We can never consider a product to be finished. We can always make it better: by adding features, adding editorial content, or reducing memory requirements. We believe that quality is not a static term." In 1996 EBSCO planned to increase the number of titles abstracted and indexed to over 3,800 and full-text titles covered to over 1,500.

In keeping with EBSCO's interest in developing new products, it began offering an online search and retrieval system called EBSCOhost in 1996. EBSCOhost featured the same searching capabilities made popular by CD-ROM but could be accessed on the Internet. Jacsó hailed the emergence of EBSCO online because, he said, "for many magazines, EBSCO is the only abstracting/indexing and/or full-text source."

EBSCO's growth has strengthened the company and its surrounding community. Elton B. Stephens founded the Alabama "%" Club, whose member companies donate 2, 5, or 10 percent of their pretax income to foundations or other charitable projects. EBSCO was a member at the 5 percent level. In addition, EBSCO funded the nation's largest endowment for a chair of library science at the University of Alabama. Of the company's success, Elton B. Stephens told Forbes, "I never dreamed that we would accomplish anything like what we have."

New Developments Near the Millennium

EBSCO continued to update its offerings. By the end of 1997, all the company's CD-ROMs carried a Windows interface and EBSCOhost became available for Macintosh users. EBSCOhost was integrated with the EBSCOdoc document delivery service by this time.

The EBSCOdoc division reverted to its original name, EBSCO Document Services, in December 1997. The unit had begun in 1979 as an independent information brokerage called Dynamic Information. It was acquired by EBSCO in 1994.

By 1998, EBSCO's Collectanea service was providing corporate users with access to more than 1,600 periodicals dating back to 1990. However, it lacked the content of market leaders Dow Jones, Lexis-Nexis, and Dialog. Other specialized products targeted the medical market.

In developing new products, wrote Mike O'Leary in Information Today, EBSCO followed a "second-wave" strategy--benchmarking and improving upon the existing offerings of competitors such as Information Access Company (a unit of Gale Group), OCLC, and UMI. The company incorporated "relevance searching" into the 2.0 version of its EBSCOhost periodicals database for libraries, which allowed users to find the most relevant documents to their queries more efficiently--only the largely home consumer-based Electric Library service offered a similar interface at the time. EBSCOhost 2.0 also featured redesigned graphics.

By the end of 1998, EBSCO Document Services had folded, a casualty of competition, restrictive publisher licensing, and changing technology, according to J.T. Stephens. EBSCO continued to offer access to the same material via its electronic services, and planned to add the ability to order documents from third-party suppliers. Other recent casualties in the document delivery business included UMI's Information Store and Knight-Ridder Information's SourceOne. Nevertheless, during the year EBSCO had acquired Network Support Inc., maker of the Relais line of document supply systems.

EBSCO developed a new service in late 1998, EBSCO Online, which allowed libraries to access and manage its Internet journals from one source. It promised to become the online equivalent of EBSCO Subscription Services--linking publishers with libraries. Even as it was released, EBSCO Online was being integrated with the EBSCOhost databases.

EBSCO replaced the Collectanea service with Corporate ResourceNet (CRN) in 1999. CRN integrated periodical databases with Internet and third-party sources. The heavy use of Internet sources allowed EBSCO to price CRN below Dow Jones Interactive, Lexis-Nexis, and Dialog, which dominated the corporate market.

EBSCO bought NoveList, a reader's advisory in fiction, from CARL Corporation in June 1999. At the turn of the millennium, EBSCO was sealing partnerships with Dun & Bradstreet, ABC-CLIO, and Salem Press, to enlarge its databases. In late 2000, EBSCO Book Services extended its online book ordering to end users, chiefly libraries.

In late 1999, EBSCO and its partner, the Open Society Institute (OSI), announced plans for the "largest information consortium in the world," called Electronic Information for Libraries Direct (EIFL Direct). Participants included academic, research, medical, national, and public libraries in 39 countries, mostly in the third world or Eastern Europe. EBSCO provided access to several of its databases, available either on CD-ROMs or over the Internet, depending on the technological sophistication of the user.

While EBSCO's information products developed at a rapid pace, the company was also growing its sporting goods businesses. By 1998, EBSCO had acquired eight lines of fishing lures to add to its original Rebel brand. It also launched a new brand of its own, Excalibur. The company had become one of the world leaders in fishing lures, manufacturing at seven locations in the southern United States and Latin America.

Beginning with the 1997 purchase of Knight & Hale Game Calls, based in Cadiz, Kentucky, EBSCO widened its outdoor lines to include hunting products. The next year, it bought Knight Rifles of Centerville, Iowa. Knight manufactured muzzleloader rifles used to hunt deer. The Knight Rifles acquisition was EBSCO's largest yet. Knight's Green Mountain Barrel Company subsidiary in New Hampshire produced 70,000 rifle barrels a year.

EBSCO soon bought a hunting scent business called Code Blue and combined it with Knight & Hale. Other late 1990s acquisitions included Canton, Alabama-based Wayne Industries, a manufacturer of lighted signs, and Tinker Business Forms, a small operation in Pelham, Alabama.

EBSCO also sold personalized promotional items to 7,000 distributors through its Vitronic and Four Seasons product lines. By 1999, EBSCO Development Company had begun developing a residential subdivision in an 8,000 acre property along Double Oak Mountain in Shelby County, Alabama.

Principal Divisions: Carry-Lite Decoys & Accessories; Code Blue; Directional Advertising Services; EBSCO Book Services; EBSCO CardMember Services; EBSCO Consumer Magazine Services; EBSCO Curriculum Materials; EBSCO Development Company; EBSCO Magazine Express; EBSCO Media; EBSCO Promotional Products; EBSCO Publishing; EBSCO Realty; EBSCO Reception Room Subscription Services; EBSCO Subscription Services; EBSCO Teleservices; Four Seasons & Vitronic; Green Mountain Rifle Barrel Co.; Kinescope Interactive; Knight & Hale Game Calls; Knight Rifles; Luxor; Military Service Company; Mt. Laurel; NSC International; PRADCO Outdoor Brands; Publisher Promotion & Fulfillment; Publishers' Warehouse; Tinker Business Forms; Wayne Industries; H. Wilson Company; Valley Joist; Vulcan Industries; Vulcan Information Packaging; Vulcan Service.

Principal Operating Units: Information Services; Sales; Manufacturing.

Principal Competitors: DAS; Dialog; Dow Jones & Company, Inc.; Electric Library; Information Access Company; Lexis-Nexis Group; OCLC; UMI.

EBSCO Industries, Inc. History

Company Perspectives:

Key Dates:

Company History:

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