A Matter of Perspective — Elsevier Acquires Mendeley . . . or, Mendeley Sells Itself to Elsevier | The Scholarly Kitchen

" ... From Elsevier’s perspective, the deal is accurately described as, “Elsevier Acquires Mendeley.” However, because Mendeley has been a darling of open access (OA), which inevitably brings with it some anti-Elsevier sentiments, the deal may also be interpreted as, 'Mendeley Sold Itself to Elsevier.' David Crotty and I were allowed to interview Mendeley’s Victor Henning and Elsevier’s Olivier Dumon in anticipation of Elsevier’s announcement, which was embargoed until 9 a.m. GMT Tuesday, an embargo that was quickly undone by TechCrunch, then social media, and finally on Mendeley’s own blog Monday night. This post uses portions of that interview to inform the speculation and perspectives that follow. (I wrote most of the post, with David contributing edits throughout the evening.) Anyone who has been through an acquisition knows that the acquirer ultimately holds the cards, no matter what assurances are made at the outset. To mitigate any perception that Elsevier doesn’t understand the Mendeley community, Elsevier has immediately expanded Mendeley’s services to users, doubling storage capacity and promising to continue the freemium business model Mendeley has been using. Mendeley’s future at Elsevier seems to be a mix of 'remain a standalone platform, building on what people know and like' and 'integrated more deeply with Elsevier’s sales and technology strategies.' There seem to be some obvious paths for Mendeley at Elsevier, as a discovery tool for readers in Science Direct or as an almetrics tool built into Scopus. In a blog post published last night, Mendeley has this cryptic description of its role at Elsevier: Mendeley will become Elsevier’s central workflow, collaboration, and networking platform, while we continue on our mission of making science more open and collaborative. So perhaps Scopus and Science Direct are about to be subsumed by Mendeley. Whatever the internal changes at Elsevier, the market face of Mendeley is not about to go away. This was not an acquisition to take out a threat, but an acquisition to create a more vertically integrated tool. Mendeley staff also remains intact — Henning will continue on at Mendeley, and will have an additional role at Elsevier in their strategy group, while Jen Reichelt will run Mendeley’s day-to-day operations. Digging a bit deeper, you begin to see some real business drivers behind the deal.  One of these emerges when you consider the Mendeley Institutional Edition (MIE), which currently accounts for about 1/3 of Mendeley’s revenues (group and individual purchasers of premium services account for the other 2/3 of their revenues). In our interview, I asked if MIE will be rolled into Elsevier’s 'Big Deal' licensing approaches. Their response was a little vague and more stumbling than the text below might indicate:  'What we know for sure is that we can keep the Mendeley Institutional Edition as an ongoing product, so that we know for sure. It’s going to stay as a standalone product for now. Whether we’ll potentially integrate this new feature into other product offerings that we currently have, it is too early to say. I think we will decide that in the upcoming weeks or months. We don’t know for now.'  It’s just a gut feeling, but I believe the short answer is, 'Yes.' Time will tell, but Mendeley is a high-priced item already. A February 2013 Library Journal article goes into some details around the pricing at institutions:  'Subscriptions for small academic institutions (with fewer than 500 FTE) start at $5,500. Very large institutions (more than 50,000 FTE) would pay $50,000 per year.  Currently, Swets is the only sales agent selling the MIE product for Mendeley, but this is a non-exclusive arrangement with some exclusions Swets carved out which prevent Elsevier from using a few specific agents. A blog post on the SwetsBlog notes that MIE sales have been made to at least six major institutions, plus many other smaller institutions. Assuming full-price, that would put Mendeley revenues via MIE at about US$400,000, possibly higher; if this is 1/3 of their revenues, then individuals and groups are chipping in another US$800,000, for total revenues of US$1.2 million in 2012. But this is just a 'back of the envelope' guesstimate, and earlier estimates peg the revenues at 'tens of thousands of dollars per month.' This makes the $69-100 million range quoted at TechCrunch for the acquisition startling.

Nevertheless, it seems likely that other agents will soon be selling the MIE product for Elsevier, possibly integrated with current 'Big Deals.' ... "