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    TechCrunch: Mendeley Will Be Sold To Elsevier
    By Hank Campbell | January 17th 2013 11:19 AM | 3 comments | Print | E-mail | Track Comments
    About Hank

    I'm the founder of Science 2.0®.

    A wise man once said Darwin had the greatest idea anyone ever had. Others may prefer Newton or Archimedes...

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    The rumor mill has it that Elsevier is in advanced talks to buy Science 2.0 fave Mendeley, a platform academics use to collate PDFS and share research and collaborate via a social network (and a terrific company all the way around, in my opinion). 

    TechCrunch says that the sale might close by the end of February and could be in the region of $100 million. But they also say Mendeley has closed a recent round of funding for ~<$10 million. The company has only publicly disclosed raising $2 million.

    That raising-more-money-and-selling-the-company part makes less sense. Early investors don't take dilution to raise more money and then sell the company for 10X of their now diluted investment - they just cost themselves a fortune doing so. Investors instead agree to raise money to run the company and expand to a point where it is self-funded.

    That said, consolidation is going to happen. For as much as the science community claims to like independence, the overall culture is really geared toward corporations and government in modern times. Big companies and government funding mean legitimacy. Mendeley giving away a product and hoping people pay for a dashboard is a tough business model when Generation Y has been taught that everything should have no cost but they have done quite well, especially if the revenue is high enough to entice the world leader in science media to buy you out. That's a testament to their devotion to the science community.

    “We don’t comment on rumors,” Mendeley’s CEO and co-founder Victor Henning told Ingrid Lunden at TechCrunch. I'd write him and ask but he's a CEO in the middle of a sale, he is playing things close to the vest, so he would give me the same answer - well, maybe he would be funnier writing back to me.  However, when things are just rumors the response is more like laughter and 'this is the first I am hearing of it' - so it looks like congratulations are in order. Hopefully it is so far along it is just lawyers talking the details, because making the devoted user base vibrate with news of a large corporate acquisition would otherwise be a negative. If the deal is not settled, Elsevier could start negotiating its way down. Once the word is out you are being sold, you have to be sold - you can't raise more money.

    The good news is that, despite the loud claims that will result in the short term, the bulk of academics will be more inclined to use something owned by Elsevier - start-ups can go out of business but Elsevier is not going away.

    And congratulations to Elsevier also. With dozens of open access journals on their roster, they are showing they also intend to be a serious player in science media of the 21st century and both Mendeley and Victor are real gems that can help them lead the way.

    Comments

    Hank
    On Twitter, the faux indignance is in.  Not to pick on one person, the link is just the one I saw when I happened to be on there, but a bunch of people who don't want to pay for the tool saying they won't use the tool if it gets bought instead of going out of business seems a little silly.

    Basically, they believe Elsevier sucks so if Elsevier embraces things to make open access and data sharing easier, they declare that the things they like will automatically suck because they were bought by Elsevier.  Using this logic, Wired and Reddit both suck because they were bought by Conde Nast. Why does Elsevier suck?  It has nothing at all to do with science but a raft of other things science bloggers dislike.

    Science 2.0 would not suck if it got bought by Elsevier, it would instead have the money to make a better feature set and be as popular worldwide as it is in America.  The tweeter I linked to can apparently work for free but not everyone has that luxury, including 40 people at Mendeley.
    that's a weak analogy. If your main beat was critically covering the established publishing model, yeah, I think you being bought up by Elsevier would mean that you'd suck. But since no one trusts a blog with all their data and (apart from those writing it) invests a lot of time in it, that'd not be a huge problem, people could read someone else at little cost.
    Along the same lines, a company that has styled itself as open access, as "disrupting the traditional publishing model" that's been very vocal against issues like SOPA etc etc. gets bought up by the archetype of, you know, the traditional publishing model, obviously people assume that that's the end of "disrupting the traditional publishing model" - but switching your ref manager is a lot more work than switching the science blog you read & there are fewer alternatives, so people are more upset. There's really nothing "faux" or irrational about it.

    Hank
    Sure there is. The mentality seems to be 'we don't like Elsevier and nothing they do will change that'.  The company is not buying up Mendeley, not for $5 million or $100 million, to kill it. To think so is 1960s-era 'companies buy technology to kill it and protect their business' conspiracy thinking by people who have never actually run or worked in any high level at a company. 

    Elsevier is buying it because they like what they see - alienating the userbase, aside from the ones who are anti-corporate zealots, is not in the cards. Springer did not kill BMC either, despite claims they would.  The benefit for Mendeley users is that the first meeting the company has after the merger goes something like "tell us what resources you need to make your roadmap happen" - it is not 'we need to cut costs and make this profitable tomorrow'.