The Thomson Corporation Business Information, Profile, and History
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The Thomson Corporation is a leading global provider of integrated information solutions to business and professional customers. Thomson provides value-added information, with software tools and applications that help its customers make better decisions, faster. We serve more than 20 million information users in the fields of law, tax, accounting, higher education, reference information, corporate e-learning and assessment, financial services, scientific research and healthcare.
History of The Thomson Corporation
The Thomson Corporation is a publishing and information services powerhouse serving businesses, libraries, and individuals worldwide. Its electronic information databases are second to none, and Thomson publishing includes the reference, educational, and trade markets. With operations in 40 countries worldwide, Thomson is organized into four divisions, each a leader in its field: Legal & Regulatory (serving the legal, tax, accounting, professional, and governmental markets); Learning (serving higher education, corporate, professional, and governmental clients); Financial (serving investment, banking, and financial planning markets); and Scientific & Healthcare (serving the research, healthcare, scientific, and academic markets).
Birth of an Empire: 1890s to 1950s
Born in Toronto in 1894, Roy Thomson left school at 14 to become a bookkeeper and, later, branch manager of a cordage company. After an unsuccessful attempt at farming in Saskatchewan, he returned to Ontario in 1920 to establish an automotive parts distributorship, which also proved unsuccessful. In 1930 Thomson agreed to a franchise arrangement to sell radios in the remote town of North Bay. As Susan Goldenberg reported in The Thomson Empire: "Only someone with Thomson's optimism, stamina, and ebullient salesmanship would have accepted such an assignment under the odds he faced." Not only was it the Depression, but radio reception in North Bay was dismal. Thomson solved the problem of feeble radio sales by borrowing money and opening his own radio station, CFCH, in 1932.
Thomson's avowed ambition was to become a millionaire by the time he was 30 but, nearing the age of 40, he was nearly penniless. His decision to capitalize on advertising revenue in his current venture, however, helped him to belatedly achieve his goal several hundred times over. Within two years of CFCH's debut, Thomson had bought additional stations in Kirkland Lake and Timmins. The latter purchase coincided with Thomson's entry into newspaper publishing, another source of advertising revenue and what would become the cornerstone of his empire, via the Timmins Press, a paper whose offices were in the same building as his newest station. By 1944 his holdings included five newspapers and eight radio stations. Newspapers became Thomson's primary concern, while Jack Kent Cooke, with whom he formed a partnership in 1940, assumed management of the radio end of the business. Their partnership ended in 1949, just as Thomson began buying newspapers outside Ontario.
In 1952 Thomson bought his first newspaper outside Canada, the Independent of St. Petersburg, Florida, to add to the 12 he already owned. A turning point came in 1953 when Thomson moved to Great Britain, leaving his North American operations under the control of his son Kenneth, then 30. Thomson's first U.K. acquisition was the Scotsman, a prestigious Scottish daily founded in 1817. Owning Scotland's leading newspaper put Thomson in an excellent position to make a bid for a commercial television franchise covering central Scotland when it became available in 1957. Famous for his frugality as well as for his quotes on the topic of wealth, he called this coup "a license to print money."
The enormous profits from Scottish Television (STV) made it possible for Thomson to buy London's leading Sunday paper, the Sunday Times, as well as 17 other local newspapers from the Kemsley family in 1959. This was the first "reverse takeover" in U.K. business history. Kemsley Newspapers bought Thomson's STV company in return for Kemsley shares, which gave Thomson majority control of the group and allowed him to indirectly retain STV as well, with 70 percent control of the total business (stricter government controls later led to a forced reduction in Thomson's holdings).
Adding Publishing, Travel, and Petroleum: 1960s-70s
Thomson did not restrict himself to newspapers and television. Thomson Publications, the forerunner of what became Thomson's largest and most profitable group, was established in 1961 to publish books and magazines. The subsidiary began with the acquisition of the Illustrated London News Company, which owned not only the magazine of that name and the Tatler, but trade book publisher Michael Joseph. To this base Thomson Publications added educational publisher Thomas Nelson & Sons; George Rainbird, specializing in illustrated books; Hamish Hamilton in trade books; and Derwent Publications in scientific and technical information, all in the early 1960s.
Thomson moved into consumer, professional, and business press publishing in the United Kingdom, Australia, and Africa. It also revamped its regional newspaper group, launched four newspapers, started new magazines, including Family Circle and Living, to be distributed through supermarkets (a novel concept that proved highly successful in the United Kingdom), and started the Sunday Times color magazine, which by 1963 was an unqualified success. In addition, Thomson Publications created a paperback imprint, Sphere, in 1966, aiming its titles at confectioners, news agents, and tobacconists rather than established bookshops. This venture suffered losses, in part because it could not secure the paperback rights of books published by other Thomson companies, since most of these had already been bought by rival paperback publishers.
In 1964 Roy Thomson made it clear that Britain rather than Canada was now his base by taking British citizenship and accepting a seat in the House of Lords as Lord Thomson of Fleet, an honor sponsored by Prime Minister Harold Macmillan. From television, newspapers, books, and magazines, Thomson next extended his empire into the travel business starting in 1965, when foreign travel was just beginning to become a popular activity in Britain. Three existing package tour companies and a small airline, Britannia Airways, were bought and formed the basis for Thomson Travel. After an initial period of good profits, the company encountered intense competition in the early 1970s which resulted in the failure of several competing companies. Thomson Travel survived as the largest operator due to a reconstruction of its management, organizational, and commercial policies.
In 1972 the group moved into travel retailing with the acquisition of Lunn Poly. Thomson introduced Yellow Pages to the United Kingdom as a long-term profit venture. Once he had won the contract from the Post Office to sell advertising in its telephone directories, Thomson persuaded the agency of the need for a classified directory in all 64 telephone regions. From this enterprise the company learned the constraints and difficulties of working in a commercial venture with a public utility. In 1980 Thomson relinquished the Yellow Pages contract and start its own local directory operation in partnership with the American firm Dun & Bradstreet.
Thomson had been looking for a national daily newspaper to put together with the Sunday Times, and in 1966 he bought the London Times and its associated weeklies, Times Literary Supplement and Times Educational Supplement, from the Astor family. Thomson described the acquisition as the summit of a lifetime's work, and cheerfully bore the continuing financial losses as his one extravagance. Perhaps even more to his credit than his financial commitment was Thomson's pledge of complete freedom and independence for his papers' editorial staff.
In 1971 the company went into its single most profitable area of business when it joined with Occidental Petroleum, Getty Oil, and Allied Chemical as the sole U.K. partner in a bid for oil exploration licenses in the North Sea. The consortium's first strike, in 1973, was in the Piper field, containing more than 800 million barrels of oil. Thomson rejected the U.S. partners' offer to buy his 20 percent stake, and his investment turned out even wiser than expected when a second strike, in the Claymore field in 1974, brought the consortium another 400 million barrels. Within a decade the International Thomson Organisation was gaining most of its overall profits from North Sea oil on the basis of an initial stake of just CAD 5 million and bank loans using the oil itself as collateral. In 1977 International Thomson showed a trading profit of almost CAD 190 million, compared with less than CAD 20 million in 1971.
Expansion Through Acquisitions: Late 1970s-80s
When Kenneth Thomson succeeded his father in 1976, he inherited control of a CAD 750 million media monolith. British government policy on monopolies prevented expansion of newspaper holdings in the United Kingdom, and exchange controls, since abolished, would have made overseas investment from a base in London very costly. The decision was made to concentrate on expanding in North America by investing oil profits into publications and publishers with proven track records. In 1978 International Thomson Organisation Ltd. (ITOL) was established and corporate headquarters were moved back to Toronto. ITOL's philosophy, according to a 1988 Forbes article, became: "Buy the market leader, even in a specialized field, and then you can afford to pay for the acquisition."
In 1979 ITOL's first acquisition in North America was U.S. college textbook publisher Wadsworth Inc., followed quickly by others in business and professional publishing and information services, such as Callaghan & Company, Van Nostrand Reinhold, Research Publications, and Warren, Gorham & Lamont, as well as numerous business magazines. By 1983 a quarter of ITOL's sales were to the United States and nearly 20 percent of its workforce was employed there. Acquisitions continued over the next several years, bringing in such companies as Gale Research, South-Western Publishing Company, and Mitchell International.
Back in the United Kingdom, Times Newspapers had become a source of continual trouble for the group. By 1978 strikes over pay and conditions were seriously disrupting the publication of both titles. The situation continued to deteriorate until the company suspended publication for 11 months. Not long after the papers' operations resumed, International Thomson gave up the unequal struggle to introduce new technology on terms acceptable to the company and, in 1981, sold the titles to Australian media magnate Rupert Murdoch.
The Canadian company Thomson Newspapers Ltd., which was separate from ITOL, had long restricted itself to owning small Canadian and U.S. newspapers with circulations below 20,000; the strategy was in keeping with Roy Thomson's drive to contain costs while nonetheless being assured of near monopolies in local advertising. During the 1950s under Kenneth Thomson, the group published the largest number of newspaper titles in Canada. In the following decade a bold U.S. acquisition program was launched. In 1967 the company acquired 16 daily and six weekly newspapers, mainly from the purchase of the Brush Moore Newspaper, Inc., and was publishing more daily newspapers in the United States than in Canada. By 1974 the group owned more than 100 newspapers.
In 1980 its profile was transformed through the acquisition of FP Publications and its chain of newspapers in most of the big cities of Canada, including Toronto's Globe & Mail, which Thomson attempted to turn into a national newspaper along U.K. lines. By this time, Thomson Travel ranked as the largest inclusive tour operator based in the United Kingdom (about three times the size of its nearest rival), owning the country's biggest charter airline, and was one of the world's largest travel retailers. Within a few years of entering the U.S. market it became one of the top three U.S. tour operators, although by 1988 it had withdrawn completely in order to concentrate on its activities based in the United Kingdom. This same year Thomson strengthened its U.K. leadership in tour operating, charter airlines, and travel retailing with the acquisition of the Horizon Travel Group, one of its major competitors.
For ITOL, expansion continued throughout the 1980s in Britain and the United States alike. With the 1986 acquisition of South-Western, the largest American publisher of business textbooks, ITOL became second overall in U.S. college textbook publishing. The following year saw one of ITOL's biggest British purchases, when it acquired Associated Book Publishers (ABP), a group including legal publisher Sweet & Maxwell and academic publisher Routledge, Chapman & Hall. Purchased for $323 million, ABP represented a major advance for ITOL in legal, scientific, technical, and academic publishing in the United Kingdom, North America, and Australia.
The 1986 fall in oil prices dragged the company's North American petroleum subsidiaries into losses and they were sold off in 1987. By reducing its oil interests, ITOL was able to concentrate even more resources and attention on its core activities of publishing and information services. In 1988 subsidiary Thomson & Thomson launched a database containing over 300,000 trademarks and logos and ITOL acquired 36 free newspapers in Britain. By the end of 1988, after 54 years of growth, Thomson Newspapers published 40 daily and 12 weekly newspapers in Canada, and 116 daily and 24 weekly newspapers in the United States, representing the largest number of daily newspapers of any publishing group in either country with a daily circulation exceeding three million.
In 1989 ITOL exited the petroleum business completely, selling its remaining interests. Next, in a dawning era of megamergers among media conglomerates (Time Inc. and Warner Communications Inc. had proposed such a landmark merger, which was completed in early 1990), ITOL and Thomson Newspapers announced preparations to merge as the Thomson Corporation, a CAD 4.7 billion entity which began operations a few months later. Thus empowered, the new company then bought the Lawyers Cooperative Publishing Company for CAD 815 million, at the time the largest acquisition ever by a Thomson company. In 1990 Thomson purchased five daily newspapers and several associated weekly publications in the United States, its largest ever single purchase. Eight more Canadian local papers and the Financial Times were also bought. Thomson newspapers were now being published in 32 of the 50 American states and in eight of the ten Canadian provinces.
Transition to a Single Focus on Information, 1990s
From 1990 to 1992 Thomson saw its revenues and profits rise from $5.36 billion to $5.98 billion; its operating profits, however, stumbled from $726 million to $692 million before partially rebounding to its 1992 figure of $714 million. Two straight years of double-digit profit declines for Thomson Newspapers were caused by recession-influenced decreases in advertising and the introduction of 400 new products, including the first corporation-generated project, an entertainment weekly entitled CoverSTORY, whose circulation, primarily through Thomson newspapers, approached one million. While newspaper profits fluctuated, Thomson invested in Internet-based services, including ownership of 190 online services, 161 CD-ROM products, and a large number of other software offerings, all part of subsidiary Thomson Information/Publishing Group (TIPG). Thomson further accelerated its entry into information services with the $210 million purchase of New York-based JPT Publishing, to acquire its data provider Institute for Scientific Information (ISI). ISI enjoyed over 300,000 customers worldwide and was believed to be generating healthy annual profits estimated at $15 million.
During the mid-1990s Thomson completed several more acquisitions, three of which were particularly important. In 1994 the company paid about $465 million for the Foster City, California-based Information Access Company (IAC), a former division of Ziff-Davis Communications. IAC was a leading provider of reference and database services for academic and public libraries, corporations, hospitals, and schools. Thomson also added the $339 million purchase of the Medstat Group to its healthcare information portfolio, but lost out to rival Reed Elsevier in the bidding for information database Lexis-Nexis. Two years later, in 1996, Thomson completed the largest acquisition in its history when it paid $3.4 billion for the Minnesota-based West Publishing Company, which maintained more than 6,000 electronic databases on law, medicine, and insurance.
Thomson and West were the two largest U.S. legal publishers, which prompted close antitrust scrutiny and objections from competitors in the field, most notably Reed Elsevier. To gain antitrust approval, Thomson and West sold off more than 50 legal publications, some of which went to Reed Elsevier. In early 1997 West and Thomson Legal Publishing were merged as West Group. At the same time, Thomson had reduced its newspaper holdings by divesting numerous U.K. papers in 1995 and U.S. and Canadian daily newspapers in 1996.
Michael Brown was named deputy chairman in 1998 and replaced as president and CEO by Richard Harrington. The early 1998 acquisition of Computer Language Research Inc. for about $325 million bolstered Thomson's existing tax and accounting information operations, which centered on its Research Institute of America Group. By this time, Thomson's information services operations were the core of the company, with overall information revenue increasing by more than 75 percent over a five-year period to $4.8 billion. The company took another major step to further its focus on information in May 1998, when it spun off Thomson Travel through a public offering that generated net proceeds of $2 billion. As a result more than 83 percent of 1998 revenues were derived from Thomson's information businesses.
Going Global, Electronically: 2000-01
Given Thomson's historic roots in the newspaper industry, its February 2000 announcement to sell its newspaper interests was dramatic. Thomson Newspapers included 55 daily newspapers and more than 75 nondaily newspapers and had generated $810 million in 1999 revenues. The company's flagship, the Globe & Mail, was sold to Bell GlobeMedia, with Thomson retaining a stake of 20 percent. Proceeds from the sales bolstered Thomson's growing portfolio of electronic databases. Acquisitions remained a key strategy for its business units, especially Thomson Learning, which purchased test provider Prometric, Alliance Press, Wave Technologies, Dialog Corporation, Greenhaven Press, and Lucent Books. In addition, Thomson inked a deal with Reed Elsevier Plc to buy Harcourt General's higher education and professional units for $2.06 billion during Reed's $5.7 billion acquisition of Harcourt.
Thomson Financial planned an aggressive international campaign to knock rival Reuters Group Plc from its perch as the global leader in financial information services. During 2000 and 2001 Thomson Financial made several purchases along this line including Primark Corporation, a European electronic data distributor; Brazil's Invest Tracker Technologia, a data provider; the remaining interest in Wall Street data firm First Call Corporation; and put its business publications, including American Banker and Bond Buyer, up for sale. This repositioning was a prime example of Thomson's strategy for the future, to be electronic and global, not print and local. Thomson finished 2000 with revenues of $5.9 billion and income of $1.1 billion.
As expected in the Reed Elsevier/Harcourt deal, the Department of Justice (DOJ) was concerned about antitrust issues and ordered Thomson to sell 38 college titles before approval would be given for the acquisitions. Thomson complied, having expected interference from the DOJ, and the Reed Elsevier/Harcourt deal became final in July 2001.
A New Era: 2002 and Beyond
In 2002 Thomson was poised for a new era, not only in leadership, since Chairman Kenneth Thomson was planning to retire, but as the company considered a public offering on the New York Stock Exchange. With the vast majority of the company's shares retained by the Thomson family (more than 70 percent), many believed the future of the electronic information powerhouse was in having a more diversified shareholder base. Others speculated the fund-raising was for a sizeable acquisition. In May 2002, before its planned offering on the New York Stock Exchange (NYSE), Kenneth Thomson stepped down as chairman and was succeeded by his son, David Thomson, a fellow director on the board. In June Thomson floated 32 million shares on the NYSE, raising over $1 billion from the offering.
Other news included Thomson Learning's acquisition of McGraw-Hill's Lifetime Learning unit; Thomson Scientific & Healthcare's purchase of the U.K.-based Current Drugs, Ltd., an e-services provider; Thomson Legal's acquisitions of Brazil's leading legal publisher, Sinese, and the United Kingdom's Lawtel in 2002 and the purchase of Elite Information Group in early 2003. Despite a weakened economy, Thomson Corp. finished 2002 with revenues of $7.2 billion and climbed slightly to $7.6 billion for 2003.
Thomson continued to acquire electronic data providers and launch new services in 2004, including the purchase of Information Holdings Inc. and Techstreet Inc.; the rollout of Thomson Learning subsidiary Gale's Virtual Reference Library of numerous reference books and series; and the purchase of dozens of texts and titles for its Learning unit. Late in the year, Thomson finally sold its Media unit to Investcorp for $350 million. Thomson Media, which held the company's financially themed print assets (American Banker, Bond Buyer, Accounting Today, and others), was originally put up for sale in 2001, then taken off the market. Thomson Scientific & Health also divested its print assets, selling 15 healthcare magazines to Boston-based Advanstar Communications for $135 million.
Thomson posted strong results for 2004 with revenues hitting $8.1 billion, led by Thomson's Legal & Regulatory division with CAD 3.3 billion in revenues. Thomson Learning ranked as the company's second revenue producer with $2.2 billion, Thomson Financial weighed in at $1.7 billion, and Thomson Scientific & Health brought in $934 million for the year, which the company hoped would be bolstered by the acquisition of the Seattle-based NexCura, Inc., a healthcare information services firm, in 2005.
By the mid-2000s Thomson's transformation from a newspaper publishing empire to a global Web-based information services provider was complete. With more than 20 million users in an unparalleled number of disciplines--including law, tax, accounting, higher education, reference, corporate, assessment, scientific, and healthcare--Thomson's reach was far beyond what its founder ever believed possible. Led by the third generation of the Thomson family, the sky was truly the limit for the multibillion-dollar firm.
AutEx; BETA; Creative Solutions; Current Drugs; Datastream; Derwent World Patents Index; Elite; FindLaw; First Call; IR Channel; ISI Web for Science; Micromedex; Medstat; Thomson Delmar Learning; Thomson Gale; Thomson NETg; Thomson ONE; Thomson Peterson's; Thomson Prometric; Thomson Wadsworth; TradeWeb; Westlaw, Sweet & Maxwell.
Thomson Legal & Regulatory; Thomson Financial; Thomson Scientific & Healthcare; Thomson Learning.
Bell & Howell Company; Dow Jones & Company, Inc.; Dun & Bradstreet Corporation; Gannett Company, Inc.; Hearst Corporation; Hollinger Inc.; Hoover's, Inc.; InfoUSA Inc.; John Wiley & Sons, Inc.; Knight Ridder; LEXIS-NEXIS; McGraw-Hill Companies, Inc.; News Corporation Limited; Reed Elsevier Plc; Reuters Group Plc; Times Mirror Company; Tribune Company; United News & Media plc; W.W. Norton & Company, Inc.
- Key Dates
- 1932 Roy Thomson begins operating a radio station in North Bay, Ontario.
- 1934 Thomson acquires his first newspaper, the Timmins Press.
- 1949 Thomson exits the radio field to concentrate on newspapers.
- 1952 Thomson buys the Independent of St. Petersburg, Florida, his first American newspaper.
- 1953 Thomson moves from Canada to Great Britain.
- 1961 Thomson Publications is established.
- 1966 The London Times and its associated weeklies are acquired.
- 1978 International Thomson Organisation Ltd. is formed; headquarters is moved to Toronto.
- 1980 Thomson Newspapers Ltd. acquires a group of Canadian newspapers, including the Globe & Mail.
- 1989 ITOL and Thomson Newspapers merge to become The Thomson Corporation.
- 1994 Thomson acquires Information Access Company and the healthcare database firm Medstat Group.
- 1995 The company divests numerous U.K. newspaper holdings.
- 1996 West Publishing Company is acquired, and most North American daily newspapers are sold.
- 1998 Thomson sells its leisure and travel firm.
- 2000 The company divests more newspaper interests, maintaining a stake in the Globe & Mail.
- 2001 Reed Elsevier Plc and Thomson buy Harcourt General's assets.
- 2002 Kenneth Thomson retires and Thomson offers shares on the New York Stock Exchange.
- 2004 Thomson sells print assets from its Financial and Scientific & Health divisions.
- 2005 Seattle-based NexCura, Inc. is acquired by Thomson Scientific & Health.
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