The recent suicide of Aaron Swartz, a digital activist who was facing decades of jail time for allegedly "stealing" copies of academic journals (actually downloading them) and distributing them (making them available) highlights one aspect of the change. That is, academics are revolting against the cozy system of academic publishing, a business Wiley and Reed Elsevier both participate in, through which the publishers get hundreds of dollars per year to publish work that is given to them, and reviewed free, by academics. Harvard just announced they will no longer subscribe to Wiley and Reed Elsevier journals, demanding "open access."
The second threat comes from "open source" textbooks, which allow for mass customization, lower-cost products students can get for low prices. Flat World Knowledge recently abandoned its "free to download" plan, but prices starting at $20 are still a good deal, and the company now has more than 100 books in its catalog. More important, Flat World is just one of many outfits, both private companies and university consortia, working on this problem.
The Internet is behind both trends, and both companies are trying to get out from under the threat with Internet-related acquisitions. Most recently ENL bought ExitCare, which produces patient discharge instructions from a database, while Wiley bought a chemistry database called FIX Chemie.
Of the two companies, Reed Elsevier has made the most progress getting out of the way, and retains net income of 15% of revenue, which comes to over $3.45 billion/year. There is no debt on the balance sheet and the company was up over 25% over the last year. Wiley, meanwhile, has a debt-to-assets ratio of nearly 25%, annual sales of just $1.78 billion/year, but similar margins.
Wiley remains almost totally devoted to books, being the publisher of the Frommer's travel guides and Dummies books, which were both popular in the 1990s. Elsevier now owns Lexis-Nexis, which it has evolved into highly valuable specialty databases, and a large trade show division.
Of these two companies I would be much more comfortable right now owning ENL than JW.A (or JW.B, which also tracks the company) not just due to the mix of assets but due to the management, which is more ingrown at Wiley. I hold to this despite the fact that ENL still owns many magazines, and as Felix Salmon notes that's a bad business to be in. I should add that I have published books under Wiley imprints in the past, and have worked for magazines now owned by Reed Elsevier. (I also majored in magazine publishing at Northwestern's Medill School.)