With a total market size of approximately $15.7 billion in 2002, the economic and financial segment represents the largest component of the business information market. The individual investor market consists of approximately 84.3 million investors in the United States, according to the Equity Ownership in America report (the EOA report), and an equal or greater number in major international markets. It is estimated that there are approximately 285,000 financial advisors in the United States and an additional 410,000 in major international markets. In the institutional segment, it is estimated that there are approximately 4,000 financial institutions in the United States, and an additional 5,000 in major international markets.

It is believed a number of trends should support continued demand for economic and financial data. At the broadest level, the U.S. financial services industry has experienced significant growth over the past 30 years. Fueling this growth have been rising equity markets and a shift away from traditional bank savings accounts to investment-related assets, such as stocks, bonds, and mutual funds. The total value of assets in these securities, according to Federal Reserve data, increased from $765 billion (45% of total household liquid financial assets) in 1975 to $11.2 trillion (73% of total household liquid financial assets) in mid-2003.

Household ownership of equity securities has also increased dramatically, with 49.5% of U.S. households owning stocks or stock mutual funds as of December 2002 compared with 19.0% in 1983, according to the EOA report. Total assets in U.S.-based mutual funds have grown from $370.7 billion in 1984 to $7.4 trillion as of December 2003, representing a compound annual growth rate of 18.1%. It is believed the increased participation of individual investors in the equity markets—both directly via stock ownership and indirectly via mutual funds—has led to a greater need for information about investing. In the retirement market, millions of investors are now charged with planning for their own retirement, as more companies have shifted from traditional pension plans to self-directed retirement plans such as 401(k)s. Retirement plan providers—typically third party asset management companies or companies that offer administrative services—often supply investment offerings to these plans and their participants. Total assets in 401(k) plans have increased from $385 billion in 1990 to an estimated $1.54 trillion at the end of 2002, according to the ICI Mutual Fund Fact Book.

For individual investors, the Company’s largest product is the U.S.-based Web site. The Web site is a leader in broad-based, innovative investment research, and it consistently ranks among the best investment sites on the Web. The site has more than 2.7 million registered users and an additional 120,000 paid subscribers. The Company also offers numerous investor Web sites in international markets, as well as a variety of print publications for individual investors. The Company’s Individual business segment also offers independent equity research to individual investors.

For financial advisors, the Company’s largest products are Advisor Workstation, a comprehensive, Web-based investment planning system, and Principia, a CD-ROM-based investment research product. The Company also offers an asset management service consisting of portfolios of mutual funds in which advisors can invest their clients' assets. The Company sells its advisor-related products both directly to independent financial advisors and through enterprise licenses.

For institutional clients, the Company’s products and services include a set of Web-based research tools that combines advanced performance and holdings-based analysis with access to the Company’s proprietary statistics, a complete set of investment data spanning all seven of the Company’s core databases, available as an electronic data feed, and investment consulting, which draws on the Company’s extensive industry knowledge to help clients create and maintain investment products.

Operating income increased $28.5 million to $17.7 million for the year ended December 31, 2004 from an operating loss of $10.8 million for the year ended December 31, 2003.

Cost of goods sold increased $11.2 million, or 25.7%, to $54.7 million for the year ended December 31, 2004 from $43.5 million for the year ended December 31, 2003.

Sales and marketing costs increased $5.2 million, or 17.0%, to $36.0 million for the year ended December 31, 2004 from $30.8 million for the year ended December 31, 2003.