Although Lionbridge Technologies Inc. is playing a key role in globalization of hundreds of other companies from Microsoft to Merrill Lynch to Pfizer, it sure isn’t getting rich doing it. The company has been posting losses for the three consecutive quarters due to the very fact that no matter how high the company’s revenues go, its expenses seem to go higher. One answer to the puzzle seems to be that Lionbridge’s expansion has put it at the mercy of the same twin forces—technology and globalization—that drive demand for its services. Translation is still a labor-intensive process, and Lionbridge’s strategy of employing hundreds of managers, engineers, and translators in expensive regions like Europe may be backfiring with the weakness of the U.S. dollar against the Euro and many other currencies.
Read the full article here