From watching the actions and statements of Bowne (BNE) personnel, you would have to say that the Bowne's end game is much the same - make Bowne Global Solutions an interesting enough package with annual sales of over US$ 200 million, and then sell it off. As most everyone knows by now, Bowne recently bought Berlitz for US$ 75 million, bringing its purchase of translation related firms close to US$ 150 million over the past five years. This does not include the money that has been spent trying to integrate these companies, since they all come to Bowne with different platforms, different infrastructure and different business processes. One authority says it will take Bowne another two years to "digest" Berlitz.

It almost seems that every dollar of purchase price for each acquisition (IDOC, I&G Com, ME&TA, Pacifitech, Gecap, ME&TA Multimedia, Linguistix, Mendez, and Berlitz GlobalNet) has brought no more than a dollar in sales. Bowne's announcement of its Berlitz purchase gave its stock a boost of six cents a share (now trading around US$ 13.00 a share).

This is better than other acquisitions, according to Rory Cowan, chairman of LioNBRIDGE, who states that last year all the new venture capital plowed into the language business (some US$ 220 million) brought in no more than US$ 10 million in sales. Why did this happen?

Ben Sargent of LioNBRIDGE offers his explanation: "Technology maps to business processes; not the other way around. The early adapters of GMS platforms found them to be inflexible and stopped using them. The lack of success stories made it hard to generate momentum around the ideas. In addition, corporations do not need another platform to integrate. They need help in rationalizing the technology investments they have already made."

To put this in terms of another common business story. McDonald's has been successful because when it introduces new food menu items to sell, the new items have to be made in the context of the existing kitchen. Other companies that compete with McDonald's would introduce menu items that couldn't be made within the existing system and this turned out to be more expensive and take longer.

Among the leading venture GMS, Uniscape merged with Trados, and Idiom has gotten rid of its CEO and other staff, has gone into a strict sales mode and according to one source is now up for sale "in the six figures". Convey Software (formerly eTranslate) finally gave up its efforts in localization by turning over its localization group to Translations. Com. Even though Convey had gone through perhaps US$ 80 million in venture capital, the purchase by Translations.com involved very little except "a combination of cash and future considerations."

While this entire reshuffling makes for interesting reading, it doesn't increase the size of the market and actually detracts from the efforts to keep momentum growing within the industry. More troubling have been the problems of AOL in Europe, which has been covered extensively by the press in the US. It oversold the promise of the Internet not only in the US but also in Europe, where it translated it browser into seven languages. It told advertisers that "more tongues means more sales." That didn't turn out to be the case and now we are wondering: " If translating is such a good thing, what happened to AOL's European ventures." A lot of things to be sure, but we can only hope that international marketing managers look beyond the negative headlines.

While it is true that the crash of the telecommunications companies has affected the language business, many firms are charging forward with new vigor and investment. Trados will be reinvigorating its connection to the translator market and adapting its Uniscape merger to existing business processes, while other private companies like PH Brink are introducing new content management systems in to the market. Called OTTO, it follows Ben Sargent's admonition that 'technology needs to follow processes." I believe new investment will follow this path.

So is anyone else making money out there? SDL International is and in its six months statement of June 2002, it reported that its turnover is up 68% to £ 28.10 million, it reported EBITDA profit of £1.10 million and net cash resources of £5.50 million.

But across the channel in France, Systran reported sales of 3.1 million Euros in the first half of 2002, with a loss of 1.8 million Euros.

LioNBRIDGE reports that for the quarter ended June 30th 2002, total revenues were US$ 29.5 million an increase of 29% over the previous year. Earnings before EBITA were US$ 521,000. For the first six months sales were $54 million and loss from operations were US$ I million. It had US$ 12 million in cash on hand as of June 30th.

While it has been hard to find venture capitalists at US language conferences, three European players - IBB Betellingungsgesellschaffft GmbH, Triangle Venture Capital Group and T-Venture - will be making presentations at Lang Tech 2002 in Berlin in late September. We will report later on their comments.

John Freivalds is Managing Director of JFA, an international marketing communications firm based in Lexington, Virginia.