By Stevie Rosignol-Cortez

Existential threats, in some cases, create transformative opportunities.

Wolters Kluwer, a Dutch publishing company specializing in medical and tax information, found itself in a similar uncertain position as others in the industry at the dawn of the internet age. If knowledge became freely accessible via internet browsers and search engines, how would that affect companies that sell information?

"If you go back to when the internet first came out, there was a real focus on, would people that had proprietary information like we do survive?" Wolters Kluwer CEO Nancy McKinstry, who has held the role for 21 years, says in an interview with At Barron's Andy Serwer.

That concern turned out to be a valid one. Pirated material can be just a mouse click away, posing a serious threat to some companies' livelihoods. A quick Reddit search reveals forums offering free textbooks and course materials like those Wolters Kluwer offers. However, McKinstry explains, the availability of information has increased demand for reliable and trusted sources.

"The value of the content and the brands actually has increased quite dramatically. The reason for that is that ultimately, our customers need to know that they can trust the fundamental content and how that is used to make a decision," she says.

The increasing usage of AI and chatbots like ChatGPT underscores the need for reputable information, particularly when making critical decisions. Chatbots can hallucinate responses, providing false details. In fields like law, tax compliance, or medicine, even a 1% error rate could have serious adverse consequences. Some AI chatbots demonstrate error rates multiple times higher than that.

Wolters Kluwer's Amsterdam-listed stock is up about 23% this year, and has shown impressive growth. Over the past decade, the stock has climbed nearly 700%, according to Dow Jones Market Data. Its American depositary receipts are up about 20% this year.

Wolters Kluwer cemented itself early as a provider of trusted information in medicine, accounting, and taxes. It acquired J.B. Lippincott, the almost-200-year-old publisher of medical journals, in 1990. Lippincott published the first textbook of nursing in 1878 and is used by over one million students today, according to its website. In 1998, Wolters Kluwer acquired Ovid Technologies, with its connection to MEDLINE, the world's oldest medical database. In 1996, Wolters Kluwer acquired CCH, which specializes in tax and accounting information and is over 100 years old.

"These brands have tremendous equity, but the value is in that trusted, authoritative kind of content," McKinstry says.

Write to Stevie Rosignol-Cortez at stevie.rosignol-cortez@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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October 26, 2024 03:00 ET (07:00 GMT)

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