I was initially a little puzzled by Warren Buffet's recent acquisition of BusinessWire . Far be it for me to question the investment prowess of the Oracle of Omaha, and I am certainly not down on BusinessWire (we awarded them a Model of Excellence award, they presented at InfoCommerce 2003, and we're also a long-time BusinessWire customer), but BusinessWire is in one tough market. Warren Buffet has other information industry investments (Moody's and the Washington Post Company), but Business Wire doesn't seem to me to have the market oligopoly characteristics of these other two investments.

True, BusinessWire has built a strong and respected brand. Its service works fast and well. Its customer support is outstanding. It's been rolling out an endless stream of innovative new capabilities and features. There's unquestionably a valuable business here.

However, as a newsletter publisher and industry research firm, we're in the interesting position of both generating and receiving electronic press releases. And with over 100 press releases flooding our inboxes daily, you start to notice things, key among them: there are at least a dozen press release distribution firms. Leaving aside its large direct competitor, PR Newswire, most of these other competitive firms are tiny, but that's just my point: they are getting their press releases to me. Just as importantly, none charge anywhere near as much as BusinessWire (some are even free), and this is always on my mind as I write those $200 checks to BusinessWire for each press release we distribute.

What's changed is that the business of press release distribution has gone from being a push business to being a pull business. Prior to the Internet, BusinessWire needed to know where, how and to whom to direct press releases, a huge job that created real value and high barriers to entry. Now, the business has flipped entirely, with journalists and others actively searching for news on the Web, and it's not hard to find. We cast a wide net with keyword blog searches, Google news alerts, even spidering Web sites of major data publishers for new press releases, but we're hardly pushing the envelope, and we've got all the press release flow we can handle.

BusinessWire has been working ceaselessly to maintain its edge and perfect its online distribution, but with competitors offering "good enough" levels of distribution for close to nothing, this is a tough business that's only going to get tougher.

So has the great Oracle been overcome by vapors on this investment? Perhaps not. There will always be companies whose news is so significant (at least to them) that they will not want to skimp on getting the best distribution. And to increase their value, the big firms have glommed on to analytics that purport to quantify the ROI of PR buzz.

Also, in reviewing all these press releases, it seems to me there could be an interesting quality play on the receiving end. With press releases so easy and cheap to create, everyone's doing them, creating a whole lot of "fact inflation" in the process. It's hard to tell who is real and who is dreaming, and it's near impossible sometimes to separate fact from fiction. A great differentiator for BusinessWire might be some sort of credentialing function. How about a partnership with D&B to link press releases to company credit ratings and backgrounders? How about a deal with ZoomInfo to provide quick background on company principals? There are lots of easy, risk-free ways BusinessWire could vouch for its customers, moving them into a trusted and preferred status.

Once you start thinking this way, it becomes clear that while this battlefield may be a tough one, the underlying need is not going away, and product differentiation is still very much possible. The battle is becoming a creative battle, and winning depends on deploying the right combination of value added content and tools.

There's clearly no shortage of creativity at BusinessWire, and there's clearly no shortage of capital at Berkshire Hathaway, and in combination it does look increasingly like Warren will win again ... again.