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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Form 10-K

Commission file number 0-25849

OneSource Information Services, Inc.

Registrant’s telephone number, including area code:

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act:

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes þ          No o

     Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

     Indicate by check mark whether the Registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).     Yes o          No þ

     The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the most recently completed second fiscal quarter (June 30, 2003) was approximately $52 million.

     As of March 18, 2004, the Registrant had 11,647,768 shares of common stock outstanding, $.01 par value.

DOCUMENTS INCORPORATED BY REFERENCE:

     OneSource Information Services, Inc. (“OneSource”) intends to file its proxy statement pursuant to Regulation 14A within 120 days of the end of the fiscal year ended December 31, 2003. Portions of the proxy statement are incorporated by reference into Part III of this Form 10-K. In addition, OneSource has filed a Registration Statement on Form S-1, File No. 333-73263.

TABLE OF CONTENTS

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PART I

Item 1.     Business

      Except for historical information contained herein, the matters discussed in this Annual Report on Form 10-K are forward-looking statements that involve risks and uncertainties. OneSource makes such forward-looking statements under the provision of the “Safe Harbor” section of the Private Securities Litigation Reform Act of 1995. Any forward-looking statements should be considered in light of the factors described below in Part II, Item 7 under “Certain Factors that May Affect Future Results.” Actual results may vary materially from those projected, anticipated or indicated in any forward-looking statements. In this Annual Report on Form 10-K, the words “anticipates,” “believes,” “expects,” “intends,” “future,” “could,” and similar words or expressions (as well as other words or expressions referencing future events, conditions or circumstances) identify forward-looking statements.

General

      OneSource provides primarily Web-based business and financial information products to professionals who need quick access to timely and reliable company, industry, and market intelligence. OneSource’s primary products, the OneSource® Business Browser^SM products, are password-protected, subscription-based products that provide sales, marketing, finance, and management professionals and consultants with industry and company profiles, research reports, media accounts, executive listings and biographies, and financial information on over 1.7 million public and private companies. OneSource customers access this information over the Internet using standard Web browsers. As a Web-based solution, the Business Browser product line does not require the purchase of additional computer hardware by the customer. OneSource also distributes its CorpTech® high-technology company database as part of the Business Browser product line, as part of a separate Web-based product, as part of CD Roms, as printed directories, and through third party distributors. In addition, OneSource provides fee-based consulting services to customers who seek to integrate content from OneSource products into their internal software platforms and applications such as intranets, portals, and customer relationship management systems. These fee-based services include helping customers apply OneSource’s proprietary classification system, the Global Business Taxonomy^TM system, which organizes and links customers’ internal data with content from OneSource products, and assisting customers in designing and building customer information applications.

      OneSource uses the Global Business Taxonomy system to associate, link, and integrate over 2,500 disparate sources of information on public and private companies worldwide that are made available from more than 30 information providers and the OneSource CorpTech high-technology database. Each information source provides its database to OneSource with identifiers for companies unique to that source. The information providers provide both textual information, such as news, business and trade articles, SEC filings, executive listings and profiles, industry intelligence, and analyst reports; and numeric information, such as company financial statements, financial ratios, stock quotes, and industry statistics.

      The OneSource product line also includes the AppLink^SM software development kit. The Applink software development kit lets OneSource customers access content from OneSource Business Browser products in HTML and XML formats via their internal applications. These customer applications may be internally developed or utilize third party software, and typically apply to corporate intranets, portals, or customer relationship platforms. OneSource has formed a number of alliances to enhance the integration and marketing of content from Business Browser products with third party software platforms. OneSource believes that the capability of its customers to access, use, and integrate information from Business Browser products with their own internal applications is an important trend and requirement.

      OneSource products and services are designed to address the information needs of leading professional and financial services firms, technology companies, and other large organizations. OneSource’s primary target market consists of Global 5000 business-to-business companies in the technology, professional services, and financial services industries with at least 500 employees and $250 million or more in sales, and that employ large direct sales forces. Representative customers include Deloitte & Touche LLP, Hewlett Packard

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      As of December 31, 2003, 750 organizations subscribed to the Business Browser product line, compared to 812 organizations as of December 31, 2002. Customers for Business Browser products had an average annualized contract value of $70,297 per customer as of December 31, 2003, compared to an average annualized contract value of $69,058 per customer as of December 31, 2002. As of December 31, 2003, 45 organizations licensed the AppLink software development kit compared to 51 organizations as of December 31, 2002. Customers for the AppLink software development kit generated, on average, approximately $380,000 and $345,000 each in annualized contract value as of December 31, 2003 and 2002, respectively.

      The aggregate annualized contract value of Business Browser product contracts was $52.7 million as of December 31, 2003 and $56.1 million as of December 31, 2002. Of this $52.7 million, $47.6 million was attributable to those customers that were under contract as of both December 31, 2002 and 2003. The renewal rate for subscribers of the Business Browser product line as of December 31, 2003 was 78% calculated on a dollar basis, whereas the renewal rate for those subscribers to the AppLink software development kit as of December 31, 2003 was 81% calculated on a dollar basis (annualized contract value is described in more detail in Part II, Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations).

      OneSource’s business is not seasonal to any significant extent. As a percentage of total invoiced fees, invoiced fees in the fourth quarter of the fiscal year have exceeded invoiced fees in other quarters for the corresponding fiscal year. However, this percentage does not represent seasonality to any significant extent. During the fourth quarter of fiscal years 2003, 2002, and 2001, OneSource invoiced 36%, 34%, and 31% of total invoiced fees for each fiscal year, respectively. OneSource attributes this primarily to the budgeting cycles of its customers.

      OneSource’s principal executive offices are located at 300 Baker Avenue, Concord, Massachusetts, 01742, and its telephone number is (978) 318-4300. OneSource’s common stock is traded on the NASDAQ National Market System under the symbol “ONES”. OneSource’s Internet address is www.onesource.com, and OneSource maintains a website at that address. OneSource makes available on or through its website, without charge, its annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports on the day such material is electronically filed with the United States Securities and Exchange Commission or if not reasonably practical on that day, on the first business day following electronic filing with the United States Securities and Exchange Commission.

Recent Significant Developments

      On October 3, 2003, OneSource announced that it had received an unsolicited letter from ValueAct Capital Partners, L.P. and its affiliates (“ValueAct Capital”) expressing an interest in acquiring OneSource’s business. OneSource’s board of directors subsequently formed a special committee of outside directors to evaluate OneSource’s strategic options to maximize shareholder value. The special committee engaged Morgan Stanley & Co. and Portico Capital Securities LLC to assist it in this review. On January 13, 2004, ValueAct Capital amended its Schedule 13D indicating that it was not in a position to refresh its level of interest until OneSource announced its fourth quarter and year-end 2003 financial results.

      On February 5, 2004, OneSource announced that as part of the special committee’s evaluation of strategic options, discussions were held with potential acquirers, and the future operating plans and prospects of OneSource were reviewed. A number of organizations expressed interest in OneSource, but none of these discussions led to a final offer to acquire OneSource. As a result, the special committee concluded its active evaluation of strategic options. In connection with this review of strategic options, both the board of directors and Dan Schimmel, president and chief executive officer and director of OneSource, determined that new executive leadership would be in the best interest of OneSource and its shareholders. As a result, OneSource accepted the resignation of Dan Schimmel effective as of February 5, 2004. OneSource’s current chairman Martin Kahn was appointed executive chairman and chief executive officer on an interim basis.

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      On February 9, 2004, OneSource announced that it received a letter from ValueAct Capital indicating that it was prepared to offer to acquire all of the outstanding shares of OneSource not already owned by ValueAct Capital at a cash price of $8.10 per share on the terms and conditions contained in a merger agreement enclosed with the letter.

      On February 18, 2004, OneSource announced that it had entered into a merger agreement with affiliates of ValueAct Capital. Under the agreement, each share of common stock of OneSource outstanding at the time of the merger (other than shares held by ValueAct Capital), will be converted into the right to receive $8.40 per share in cash. ValueAct Capital held an approximate 32% ownership interest in OneSource, according to its filing on February 9, 2004 with the Securities and Exchange Commission. The transaction is expected to close in the second quarter of 2004. On February 17, 2004, OneSource’s Rights Agreement with American Stock Transfer & Trust Company, dated as of October 7, 2003, was amended to exempt the proposed transaction.

      During the first quarter of 2004, OneSource incurred approximately $0.5 million to $0.7 million in expenses in connection with the execution of the merger agreement with affiliates of ValueAct Capital. These expenses include legal fees, accounting fees, and compensation for members of the special committee. In addition, severance costs for OneSource’s previous chief executive officer, which were recorded in the first quarter of 2004, include cash payments of approximately $0.5 million and non-cash compensation expense of $56,000 related to the modification of stock options.

Industry Trends

      During the past several years, the direct access to, and the purchasing decisions for, business information products have increasingly migrated from centralized information specialists to core operating functions in corporations. This has led to the availability of more information products throughout corporations and has increased direct access to these products by end-users.

      The spread of information products throughout corporations has created opportunities for companies with knowledge of business information and the requisite skills and experience in integrating such information to assist customers in better leveraging their internal and external information sources. It has also empowered end-users to require that information products are designed and developed to work with their existing applications and business processes, and that the information itself is the most relevant to perform their functions.

      This underlying trend is directly affected by the substantial investments that corporations have made in various software applications such as customer relationship management platforms, enterprise information portals, and various desktop applications. Business information solutions now must be designed to consider these applications of choice as the prerequisite user work modes and environments. OneSource believes that the companies that solve these particular problems of delivering products and services that operate effectively with these third party applications and that satisfy the data requirements of end-users’ functions will ultimately succeed and be the leaders in the business information industry.

Business Strategy

      OneSource’s goal is to be the leading provider of business information solutions to Global 5000 companies. It plans to achieve that goal through a number of core business strategies as follows:

	•	Evolve and develop products that support the functions, applications, and business processes of end-users. OneSource’s product strategy is to provide end-users with the information they need, when they need it, and in the applications they use. OneSource believes that the productivity and efficiency of workers such as sales people, loan officers, and management consultants are enhanced with time saved or additional revenue earned through the use of effective, easy-to-use, and customizable business information products. Two primary themes drive OneSource’s product strategy:

	•	Continue to enhance Business Browser products — Today, Business Browser products comprise the majority of Web-based revenues. In 2003, OneSource added an Executives module to help

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		end-users better search and find executive names in the Business Browser products. In addition, OneSource enhanced the export function and the support for and breadth of corporate relationships contained in the Business Browser product line. OneSource also expanded the volume of company profiles, executives, and industry information in the Business Browser products and introduced an enhanced offering for UK financial and professional services’ customers. OneSource expects to continue to selectively invest in Business Browser products to provide new features, functions, and content.
	•	Introduce evolved and new products — At the same time while serving Business Browser customers, OneSource will continue to evolve and introduce products that address the needs of customers who seek solutions that are flexible and customizable and that integrate with the software applications, business processes, and tasks of end-users. During the past year, OneSource introduced an XML-based version of the AppLink software development kit and the new CatalystSM modules that support Siebel eBusiness and Microsoft Office software applications. OneSource expects evolved and new products to contribute an increasing portion of future revenues and growth.

	•	Provide the right and best information content in support of the roles and requirements of end-users. OneSource spends considerable time in acquiring, integrating, and managing its content sources and ensuring that critical fields of data such as executive and financial data are available to serve the specific roles and tasks of end-users. Despite the amount of information available through the Internet, OneSource believes that business professionals seek, and will pay for, high quality data that will both save time and enhance decision-making. Therefore, OneSource considers information quality to be a high priority, and OneSource strives to obtain accurate, complete, and timely information. During the past year, OneSource took steps both on its own and with its data suppliers to add to the breadth, depth, and quality of the content in its products.
	•	Continue to leverage OneSource’s core competency in integrating company-related business information. The OneSource Global Business Taxonomy system allows OneSource to easily and effectively classify business information and tie together internal and external sources of business information. In 2003, OneSource implemented a new text-based tagging convention as part of the Global Business Taxonomy system. This new capability provides users the ability to search and receive more information related to such categories as topics, industries, executives, and geographies. OneSource plans to continue to extend the capabilities of the Global Business Taxonomy system.
	•	Align and train sales, marketing, and customer support teams to optimally serve OneSource’s primary target market. During the last two years, OneSource has taken a number of steps to enhance how its sales, marketing, and support teams serve Global 5000 customers. This included focusing the sales, marketing, and support teams on the high technology, professional services, and financial services industries. Sales representatives and product marketing managers with respective experience in selling and marketing to these industries were recruited during the past year to better serve OneSource’s primary target market. In addition, in 2003, OneSource’s professional services consulting team began building and deploying applications that integrate content from the Business Browser products with customers’ systems, data, and applications. Further, OneSource’s customer support team initiated a number of campaigns with existing customers to enhance product usage, including offering more training programs and initiatives to help ensure customers maximize the value of their OneSource products and solutions.

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Products

      The OneSource Business Browser product line is designed to be a comprehensive, efficient, and easy-to-use business and financial information resource for professionals who require quick access to reliable company, industry, and market intelligence. OneSource customers generally use the Business Browser products for such purposes as account prospecting and management (i.e., business development), competitive and peer analysis, company tracking and monitoring, and company and industry research.

      The Business Browser products integrate over 2,500 sources of business information from more than 30 business and financial information providers. These sources include textual information, such as company profiles, news, business and trade articles, SEC filings, executive listings and biographies, industry intelligence, and analyst reports; and numeric information, such as company financial statements, stock quotes, and industry statistics. OneSource uses its Global Business Taxonomy system to sort, categorize, link, and integrate information on over 1.7 million worldwide public and private companies.

      Business Browser products are accessible to licensed users through a standard Web browser that is readily available and generally familiar to users. OneSource customers require minimal installation and systems support, and users can access the Business Browser products at any time via the Internet. In addition, the AppLink software development kit and Catalyst modules enable licensed subscribers the option to access Business Browser content via their corporate intranets, portals, or customer relationship platforms.

      OneSource concentrates on the functional uses of the business and financial information that it integrates and makes available to users. The Business Browser product line has been designed for use not only by traditional users of business information, but also throughout an organization, including sales forces, professional service and consulting staffs, marketing and new business development executives, financial analysts, and purchasing personnel. OneSource applies its knowledge of how business professionals use information in order to transform raw, disparate data into information that is integrated, meaningful, and actionable. OneSource specializes in integrating and presenting information in such a manner that the user can efficiently interpret, analyze, and problem solve. OneSource uses the feedback of its users in deriving and enhancing its products’ user interface and functionality in order to make its products easy to use, and to enable users to become productive quickly with minimal training.

      The Business Browser product line delivers information in an integrated format. This allows customers to obtain different types of information from multiple sources through a single, easy-to-use interface. Business Browser products organize data around business applications, and transform raw, disparate data into meaningful, actionable information, delivered according to the characteristics that users have defined and in the custom formats, tables, and reports that users require. Users that wish to perform detailed analysis can also easily transfer certain quantitative data into spreadsheets or other desktop tools, such as contact management software.

      Examples of some of the core functions of the Business Browser product line are as follows:

	•	profile a public or private company for a business summary, current news, financial reports, corporate affiliations, and executive listings;
	•	research an industry to measure a market, list major participants, or review articles or reports on market share and trends;
	•	identify companies by industry, geography, size, or other key characteristics;
	•	research a topic and find the latest news, analyst reports, and trade information;
	•	learn who’s who in the executive arena; and
	•	track the latest news and product information on competitors.

      The Business Browser product line is generally available to a specified number of users in a customer organization at a fixed annual subscription fee that declines on a per-user basis as the total number of users

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      The Business Browser product line includes:

      GLOBAL BUSINESS BROWSER. Global Business Browser was introduced because business professionals require global perspectives to complement detailed coverage of local markets. Global Business Browser is available in four editions. Global Business Browser — US Edition is an integrated information resource that delivers integrated information on over 435,000 North American and global companies. Global Business Browser — European Edition includes both European and global content with over 488,000 companies profiled. Global Business Browser — UK Edition is an integrated resource including both United Kingdom and global content with more than 500,000 companies profiled. Global Business Browser — Asia Pacific Edition is an integrated resource including both Asia Pacific and global content with approximately 346,000 companies profiled.

      US BUSINESS BROWSER. US Business Browser is focused specifically on public and private companies in the United States and Canada. It contains a subset of business, financial, and industry information from Global Business Browser — US Edition. It covers approximately 339,000 public and private companies in the United States and Canada. OneSource makes available in-depth content on approximately 3,600 Canadian companies for an additional subscription fee. OneSource also makes available in-depth content on approximately 295,000 small and mid-market United States and Canadian companies for an additional subscription fee.

      EUROPEAN BUSINESS BROWSER. European Business Browser provides users with an integrated database on more than 405,000 public and private companies across Europe, including approximately 50,000 United Kingdom companies. It contains a subset of business, financial, and industry information from Global Business Browser — European Edition. European Business Browser is available in two configurations, European Business Browser Select and European Business Browser Standard. European Business Browser Select comprises a subset of the content and functionality that European Business Browser Standard contains. European Business Browser Select contains a fewer number of financial variables that are available for screening purposes and financial information only for the current year. European Business Browser Standard contains up to 3 years of detailed financial information for European companies and up to 5 years for United Kingdom companies.

      UK BUSINESS BROWSER. UK Business Browser is an integrated source of information on up to 400,000 public and private companies in the United Kingdom. It contains a subset of business, financial, and industry information from Global Business Browser — UK Edition. UK Business Browser is available in two configurations, a 100,000 companies edition and a 400,000 companies edition. OneSource makes available copies of registered filings for approximately 2.0 million United Kingdom public and private organizations at no additional subscription fee. OneSource also makes available in-depth content on approximately 60,000 United Kingdom public sector and partnership entities for an additional subscription fee. OneSource also makes available in-depth content that details the information technology and telecommunications infrastructure of approximately 25,000 United Kingdom companies for an additional subscription fee.

      US COMPANY BROWSER. US Company Browser is focused specifically on public and private companies in the United States and Canada. It comprises a subset of the business and financial information and functionality that US Business Browser contains. It covers approximately 339,000 companies in the United States and Canada. OneSource also makes available in-depth content on small and mid-market United States and Canadian companies for an additional subscription fee.

Additional Applications

      Three additional optional applications that are available for Business Browser products for additional subscription fees are as follows:

      BUSINESS BROWSER AP. Business Browser AP is an advanced Web-based quantitative analysis tool available as an add-on option with all of the Business Browser products other than European Business

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      APPLINK SOFTWARE DEVELOPMENT KIT. The AppLink software development kit consists of software that allows customers to easily access Business Browser content, such as company profiles, news, business and trade articles, analyst reports, executive biographies, industry intelligence, and financial data, in HTML and XML formats without use of the Business Browser product interface and for use with customers’ intranet or other third party software applications such as prospect and customer databases, sales force automation tools, enterprise reporting software and corporate Web applications. No special client software, other than a standard Web browser and dedicated servers, are necessary.

      CATALYST MODULES. The Catalyst modules consist of software that allows customers to easily access Business Browser content, such as company profiles, news, business and trade articles, analyst reports, executive biographies, industry intelligence, and financial data, in HTML and XML formats without use of the Business Browser product interface and primarily for use with Siebel and Microsoft software applications.

      Revenues contributed by Web-based products during each of the last three fiscal years were as follows: $55.4 million for the year ended December 31, 2003; $55.7 million for the year ended December 31, 2002; and $56.3 million for the year ended December 31, 2001. For the years ended December 31, 2003, 2002, and 2001, Web-based products were 97%, 96% and 95%, respectively, of total revenues.

Other Products and Services

      The CorpTech high-technology database is designed to be a comprehensive, efficient, and easy-to-use source of information on high-technology companies. The CorpTech high-technology database provides in-depth profiles on more than 50,000 technology companies in the United States. The CorpTech high-technology database is available via CD Rom and printed directories and through a website located at www.corptech.com. This website offers several options for customers including downloadable report lists that are based on such criteria as geography and companies of interest in a particular industry, company profile reports on a pay-per-view basis, and a subscription-based offering in which the fee varies based on the functionality selected and whether the licensee is a library or other entity type.

      OneSource also provides fee-based consulting services to customers who seek to integrate content from Business Browser products into their internal software platforms and applications such as intranets, portals, and customer relationship management systems. These fee-based services include helping customers to apply OneSource’s proprietary classification system, which organizes and links customers’ internal data with content from OneSource products, and assisting customers in designing and building custom information applications.

Product Development and Content

      OneSource employs two teams, the Product Development Team and the Content Team, which contribute to the (i) commercialization, research, and development of OneSource products and their underlying technology platforms, and (ii) evaluation, licensing, integration, and management of the data in the OneSource products.

      The Product Development Team (formerly the Products and Solutions Team) consists of product managers, development engineers, quality assurance engineers, and architects. Product managers specify the functionality, user interface, product workflow, format and look of reports, and information designated for the OneSource products. Product managers also supervise the delivery and maintenance of the OneSource products. Development engineers develop, deploy, and maintain the functionality and core technologies of the OneSource products. Quality assurance engineers ensure software quality, monitor and analyze the software development process, and recommend improvements. Development engineers and quality assurance engineers work closely with product managers to ensure that functionality and support requirements are understood,

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      The Content Team consists of content managers, content licensing personnel, content engineers, and content integration specialists. Content managers analyze and evaluate third party data sources for inclusion in OneSource products, specify the business parameters for loading and integrating data, and manage data vendor relationships. Content licensing personnel negotiate redistribution terms with information providers and maintain the business relationship. Content engineers receive content feeds from information providers and write data loaders based on content management specifications to facilitate data integration into the OneSource products. Content integration specialists maintain and enhance the Global Business Taxonomy system, update corporate family and executive content, and provide fee-based services to customers that seek to integrate Business Browser content with their internal systems and applications. The Content Team seeks to select the best possible information providers for each type of content; effectively standardize, integrate, and add value to this content for the OneSource products; and strategically link each item of information to all relevant company information included in the OneSource products.

      Operating expenses relating to platform and product development during each of the last three fiscal years were as follows: $10.6 million for the year ended December 31, 2003; $10.0 million for the year ended December 31, 2002; and $8.4 million for the year ended December 31, 2001. For the year ended December 31, 2004, OneSource plans to decrease its spending in platform and product research and development slightly compared to the prior year. For the years ended December 31, 2003, 2002 and 2001, capitalized software development costs which were primarily associated with the development of OneSource’s new products and platforms were $3.9 million, $1.9 million, and $0.8 million, respectively. OneSource anticipates capitalized software development costs will be approximately $3.0 million to $3.5 million in 2004.

Information and Providers

      OneSource Business Browser products integrate a selection of financial, company, industry, executive, and news-related content from over 2,500 sources, more than 30 information providers, and OneSource’s proprietary CorpTech high-technology company database. OneSource enters into contracts with its information providers in order to license their information. These license agreements allow OneSource to integrate and distribute the information as part of OneSource on-line products.

      OneSource’s contracts with its information providers are generally for terms of at least one year and automatically renew if not canceled by either party as of the end of any term. In addition, these contracts allow for termination under certain circumstances including contract breaches. Certain limited contracts with information providers also allow for the use of their information for a predetermined period of time at no additional cost to OneSource after termination of the contract. Royalties under OneSource’s contracts with its information providers are typically calculated as a fixed fee, as a flat percentage of the amount that OneSource invoices its customers, or as a calculated fee based upon revenue growth of OneSource products compared to prior periods. Royalties are generally paid to information providers on a quarterly basis.

      The information contained in the OneSource Business Browser products is updated at varying frequencies depending on the nature of the data. For example, news-related information is updated frequently throughout the day whereas portions of the information databases on company and executive profiles are updated on either a weekly, monthly, quarterly, semi-annual, or annual basis. Regardless, OneSource attempts to ensure that the information contained in its products is updated no less frequently than each information provider makes the information available to its own customers or to other distributors.

      Alternative supply sources generally exist for the information that OneSource licenses from information providers. However, consolidation in the information industry is an ongoing trend, and there is no assurance that alternative supply sources will continue to exist. The nature and relative importance of any given database in the Business Browser products varies. OneSource attempts to secure longer-term rights for databases where alternative sources are limited. Some of the companies that supply OneSource with information include the United States and United Kingdom business units of Dun & Bradstreet, Inc. (a subsidiary of The Dun &

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Intellectual Property

      OneSource considers its copyrights, trademarks, trade secrets, trade names, service marks, databases, software, and other intellectual property to be proprietary, and relies on contractual restrictions and a combination of copyright, trademark, trade secret, patent, and confidentiality safeguards to ensure adequate protection. OneSource believes that the following intellectual property is important to its business: the Business Browser product line; the Global Business Taxonomy system; the trade secrets and source code relating to OneSource products; the OneSource name and logo; the OneSource product and brand names; the CorpTech high-technology company database; and the OneSource and CorpTech websites and elements therein.

      OneSource is licensed to access and use certain technology and other intellectual property that are owned and controlled by third parties. OneSource’s contracts with its technology and information providers typically contain warranties from the providers that the licensed technology or data do not infringe any third party proprietary right. The technology and information providers agree to defend, indemnify, and hold OneSource harmless with respect to any third party claim alleging that the licensed technology or data infringes any proprietary right of any third party. OneSource believes these industry standard warranties and indemnities are sufficient to protect it from claims of infringement relating to the intellectual property that it licenses, but there can be no assurance that these warranties and indemnities will be adequate.

      OneSource has filed and/or registered trademarks and service marks in the United States, Canada, and Europe, and has registered copyrights in the United States. OneSource believes that its intellectual property does not infringe upon the proprietary rights of third parties.

Alliances

      OneSource identifies and forms alliances with other companies in order to extend the possibilities for access to the information from OneSource products by ensuring compatibility with and the integration of such information with other third party software applications. These applications generally focus on corporate intranets, portals, and customer relationship management platforms. In addition, the alliances intend to increase marketing reach and awareness.

      In 2003, OneSource integrated its products for use with 2003 versions of Microsoft Word and Excel software and in support of Microsoft’s Office Systems 2003 marketing launch. OneSource also renewed its alliance with Siebel Systems, Inc., a supplier of e-business applications software.

      Examples of other alliances that OneSource has formed include those with the following corporations: Pivotal Corporation, a provider of customer relationship management, business marketing, and service solutions; ONYX Software Corporation, a provider of enterprise-wide customer-centric e-business solutions; and Microsoft Business Solutions Corporation (a subsidiary of Microsoft Corporation), a provider of business management software. OneSource believes that its ability to provide access to its products through other third party applications is a component to its growth strategy, and it expects to continue to selectively form alliances in the future.

Customers

      OneSource does not rely upon any single customer, or a few customers, such that a loss of any one or a few customers would have a material effect on OneSource’s business. As of December 31, 2003, OneSource had 750 customers. In 2003, no one customer contributed more than 3% of annual revenues, and as of December 31, 2003, 295 customers comprised 80% of annualized contract value. OneSource’s primary target market consists of Global 5000 companies and specifically business-to-business companies in the technology, professional services, and financial services industries with not less than 500 employees and $250 million or more in sales, and that employ large sales forces. As of December 31, 2003, approximately 68%, or

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Sales and Marketing

      OneSource markets its products through a field and telephonic sales force and a support and marketing staff. Sales and marketing employees are located primarily in the United States and the United Kingdom. OneSource also has formed alliances to help in the promotion and marketing of its products.

      During fiscal year 2003, OneSource incurred selling and marketing expense of $17.1 million, compared to $16.5 million incurred during fiscal year 2002 and $18.4 million incurred during fiscal year 2001. OneSource expects that selling and marketing expense will decrease slightly during fiscal year 2004.

Customer Service and Support

      OneSource provides support to customers worldwide through instant messaging, electronic mail, telephone, and its website. OneSource support representatives assist customers regarding OneSource product issues including customized applications built using the AppLink software development kit. OneSource support representatives also assist customers with various administrative and technical tasks such as managing product trials, training and registering users, managing usage, promoting product-related awareness, and configuring custom registration pages on the Internet for OneSource product registration. In addition to employing customer support personnel, OneSource also maintains a customer support portion of its website that provides product-related support for customers.

Website Technology and Operations

      OneSource makes its on-line products available through a hosting facility managed by SAVVIS Communications Corporation (formerly Cable & Wireless U.S.A., Inc.). The hosting facility was moved in fiscal year 2003 from Medford, Massachusetts to Waltham, Massachusetts. SAVVIS Communications Corporation provides facilities and facilities management services including continuous monitoring, multiple high-volume access lines to the Internet, uninterrupted power supplies, generators, physical security, and protection from disaster. OneSource’s on-line products are generally available twenty-four hours a day, seven days a week, excluding scheduled maintenance.

      OneSource also has a production data center at its corporate headquarters located in Concord, Massachusetts. This data center is used to process data feeds from information providers, distribute this data to the live site, and serve as the physical facility where all of OneSource’s pre-production/development and internal computing resources are located. OneSource has taken a number of steps to keep its data center operational in the event of emergency. These steps include the use of a diesel standby generator, an automatic FM200 fire suppression system, and uninterruptible power supplies and electrical power filters. Redundant cooling capacity is also in place. All systems are under maintenance contracts. Additionally, there are separate security and access restrictions as well as in-house operations staff.

Competition

      The business information products and services industry is intensely competitive and rapidly evolving. Several of OneSource’s information providers compete against each other and in some cases with OneSource. OneSource faces direct or indirect competition from numerous companies, including the following:

	•	large, well-established business and financial information providers, such as Dow Jones & Co., Pearson PLC, Reuters Group PLC, and McGraw-Hill Companies Inc.;
	•	aggregators of business and financial information, such as LexisNexis Group (a Reed Elsevier Plc subsidiary), The Dialog Corporation (a Thomson Corporation subsidiary), Factiva (a Dow Jones & Co. subsidiary), Alacra, Inc., Capital IQ, Inc., and Bureau Van Dijk Computer Services SA;

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	•	providers of company information, such as Thomson Financial, Inc. (a Thomson Corporation subsidiary), Hemscott Group Ltd. (a Finmedia Ltd. subsidiary), and Hoovers, Inc. (a subsidiary of The Dun & Bradstreet Corporation);
	•	providers of sales, marketing, and credit information, such as Dun & Bradstreet, Inc. (a subsidiary of The Dun & Bradstreet Corporation) and infoUSA Inc.; and
	•	Web retrieval and Web “portal” companies and other free or low-cost mass market on-line information services, such as Yahoo! Inc., AOL-Time Warner, Inc., MarketWatch.com, Inc., Google, Inc., and TheStreet.com, Inc.

      Several of these competitors offer products or services similar to those of OneSource and in some cases at lower prices. The principal competitive factors in the business information products and services industry are availability of comprehensive, timely, integrated, and reliable business and financial information; product ease of use; professional service, support, and training capabilities; financial, technical, administrative, and marketing resources; brand recognition; vendor reputations; timely development and introduction of new products and product enhancements; and product price/performance characteristics. Based on reported operating results, industry reports, and other publicly available information, many of OneSource’s competitors have longer operating histories, greater name recognition, larger customer bases, and greater financial, technical, and marketing resources. OneSource differentiates itself from its competitors through its product features, ease of use, target market, geographic focus, data integration capabilities, professional services expertise, corporate selling skills, and customer service and support.

Laws and Government Regulations

      OneSource is subject, both directly and indirectly, to laws and government regulations relating to the Internet and OneSource’s Web-based information products. There are currently few laws or government regulations directly applicable to Web-based information products or the Internet. Some existing laws we believe may be applicable to Web-based information or the Internet, albeit indirectly, are those that relate to, but are not limited to, property rights, libel, and personal privacy. However, due to the increasing use of the Internet for information-based solutions and company and industry research, laws and government regulations may be adopted that are directly applicable to Web-based information products and the Internet. For example, these laws and government regulations may address user privacy, taxation, and product quality. In order to comply with such laws and government regulations and maintain its competitive position in the business information products and services industry, OneSource may need to increase expenditures and adjust its pricing structure.

Employees

      As of December 31, 2003, OneSource employed 264 employees (including 256 full-time employees and 8 part-time employees), compared to 242 at the end of fiscal year 2002 (including 232 full-time employees and 10 part-time employees). OneSource employees are not represented by any collective bargaining organization. OneSource has never experienced a work stoppage, and believes that its relationships with its employees are generally satisfactory.

Geographic Information

      OneSource conducts its business globally through two geographic locations: the United States and the United Kingdom. OneSource had revenues of $41.0 million, $42.0 million, and $44.1 million from the United States business, and $16.3 million, $15.7 million, and $14.9 million from the United Kingdom business, for the years ended December 31, 2003, 2002, and 2001, respectively.

      The operations in the United Kingdom are subject to the usual risks inherent in doing business in countries outside of the United States, including potentially higher costs, unanticipated regulatory changes, political instability, terrorism, difficulties in staffing and managing operations, adverse tax consequences, currency and exchange rate fluctuations, and seasonal reductions in business activity. In addition, the impact

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Item 2.     Properties

      OneSource’s headquarters are currently located in approximately 50,900 square feet of office space located in Concord, Massachusetts. The office space has been leased through June 2004. This lease includes an option to renew the lease at the then current market rental rate for another five years. OneSource leases additional office space in New York, New York; San Francisco, California; Woking, England; and London, England. In 2004, OneSource made the New York office space available for sublet through September 29, 2007, which is the end of the lease. OneSource believes that its existing facilities are adequate to meet current requirements, and that suitable additional or substitute space will be available as needed.

      OneSource deems the buildings and equipment used in its operations (whether owned or leased), generally to be in good condition and adequate for the purposes for which they are used.

Item 3.     Legal Proceedings

      OneSource and its directors were named as defendants in two purported class action lawsuits filed in the Delaware Court of Chancery in February 2004, entitled Hoffacker v. OneSource Information Services, Inc., et al., Filing ID No. 3140593, and Pennsylvania Avenue Funds v. Kamin, et al., Filing ID No. 3141683, respectively. The complaints allege, among other things, that the defendants breached their fiduciary duties in entering into the proposed transaction with affiliates of ValueAct Capital. The complaints seek unspecified damages and injunctive relief. OneSource and its directors believe the claims to be without merit and intend to defend against them vigorously.

      No matters were submitted to a vote of our security holders during the fourth quarter of the year ended December 31, 2003.

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PART II

      OneSource’s common stock is traded on the NASDAQ National Market System under the symbol “ONES”. Public trading of OneSource’s common stock commenced on May 19, 1999.

      The following table sets forth the high and low closing prices as reported by the NASDAQ National Market for the periods indicated.

      The quotations represent inter-dealer quotations, without adjustments for retail markups, markdowns, or commissions, and may not necessarily represent actual transactions. The number of record holders of OneSource’s common stock at March 18, 2004 was 59.

      OneSource has not declared or paid any cash dividends on its common stock and presently intends to retain its future earnings, if any, to fund the development and growth of its business. OneSource does not anticipate paying any cash dividends in the foreseeable future.

      In May 1999, OneSource completed an initial public offering, (the “Offering”) of 3,636,000 shares of its common stock, of which 2,500,000 shares were issued and sold by OneSource, and 1,136,000 shares were issued and sold by certain stockholders of OneSource.

      The net proceeds to OneSource from the Offering, after deducting underwriting discounts and commissions and other offering expenses, was approximately $27.0 million.

      The net proceeds from the Offering, less $6.8 million used to pay off long-term debt and $7.6 million used to acquire Corporate Technology Information Services, Inc., have been invested in interest bearing, investment grade securities.

      OneSource has not sold any securities in 2003, 2002, and 2001 that were not registered under the Securities Act of 1933.

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      The following table provides information regarding our equity compensation plans approved and not approved by stockholders as of December 31, 2003:

(1)	Excludes 129,016 shares available for future issuance as of December 31, 2003 under the OneSource 1999 Employee Stock Purchase Plan, which was terminated effective February 29, 2004.

      Additional information with respect to our equity compensation plans appears in this Annual Report on Form 10-K in the Notes to Consolidated Financial Statements under the caption “Stock Plans” on page F-16, and is incorporated by reference.

Item 6.     Selected Financial Data

      The consolidated statement of income data provided for the years ended December 31, 2003, 2002, and 2001, and the consolidated balance sheet data as of December 31, 2003 and 2002, are derived from, and are qualified by reference to, OneSource’s audited consolidated financial statements, which are included elsewhere in this Annual Report on Form 10-K. The consolidated statement of income data for the years ended December 31, 2000 and 1999, and the consolidated balance sheet data as of December 31, 2001, 2000, and 1999, are derived from audited consolidated financial statements, which are not included in this Annual Report on Form 10-K. The following consolidated financial data should be read in conjunction with the Consolidated Financial Statements and the Notes thereto and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this Annual Report on Form 10-K.