BtoB Media Business - January 2007 - (Page 3)

Warning : session_start : The session id contains invalid characters, valid characters are only a-z, A-Z and 0-9 in /mnt/data/www.nxtbook.com/fx/config_1.3/global.php on line 9 Warning : session_start : Cannot send session cache limiter - headers already sent output started at /mnt/data/www.nxtbook.com/fx/config_1.3/global.php:9 in /mnt/data/www.nxtbook.com/fx/config_1.3/global.php on line 9 Warning : Cannot modify header information - headers already sent by output started at /mnt/data/www.nxtbook.com/fx/config_1.3/global.php:9 in /mnt/data/www.nxtbook.com/fx/config_1.3/global.php on line 10 MB _ 01-15-07 A 3 B2DB 1/5/2007 1:04 PM Page 1 Upfront JANUARY 2007 Upfront 1105 Media continues its aggressive buying . . . Page 4 Saga continues regarding potential sale of Ziff assets BY MATTHEW SCHWARTZ Cover Story Our annual look at the state of b-to-b media . . . . . . Page 8 Feature The outlook is strong for most vertical markets . . . . . Page 12 Endnote HP execs on how to meet advertisers’ needs . . Page 30 Departments Sales & Marketing . . . Page 18 M&A . . . . . . . . . . . . . . Page 19 Events . . . . . . . . . . . . . Page 20 Production . . . . . . . . . . Page 21 Online . . . . . . . . . . . . . Page 22 Circulation . . . . . . . . . Page 24 People . . . . . . . . . . . . . Page 25 Benchmarks . . . . . . . . Page 26 E D I T O R I A L OFFICES 3 1 2 649-5401 FAX 312 649-5462 A D V E R T I S I N G SALES 2 1 2 210-0782 VP-Publisher Robert Felsenthal 212 210-0262 Editor Associate Publisher David Bernstein Ellis Booker Managing Editor Account Executives John Obrecht Eric Gordon David Spindler Design Director Peter Loibl Martin Musker Lynne Bosnack Contributing Editor Marketing Manager Mary E. Morrison Tara Curran Associate Editor Tequia Burt Marketing Assistant Megan A. Lee Senior Reporters Carol Krol Production Manager Kate Maddox Nicole Dionne Reporter Circulation Manager Matthew Schwartz Andrea Richardson Copy Editor Online Marketing Richard K. Skews Development Manager Intern Jeff Buddle Emerald S. Morrow SUBSCRIPTION Contributors HOTLINE 8 8 8 288-5900 Marie Griffin, Mark J. Miller T H E AD AGE GROUP VP-Publishing and Editorial Director David S. Klein C R A I N COMMUNICATIONS INC. Chairman, Keith E. Crain; President, Rance Crain; Secretary, Merrilee Crain; Treasurer, Mary Kay Crain; Executive VP-Operations, William A. Morrow; Senior VP-Group Publisher, Gloria Scoby; Group VPTechnology, Circulation, Manufacturing, Robert C. Adams; VP-Production & Manufacturing, David Kamis; Corporate Circulation Director, Patrick Sheposh; Founder, G.D. Crain Jr. 1885-1973 , Chairman Emeritus, Mrs. G.D. Crain Jr. 1911-1996 Media Business® is a registered trademark of Crain Communications Inc. Rumors are once more swirling that tech publisher Ziff Davis Media is in play. An item posted in late December by paidcontent.org, which covers new media, said investment banker Lehman Brothers is actively looking for buyers for Ziff Davis’ Consumer Small Business Group and Game Group in what would be separate deals. The Consumer Small Business Group includes Ziff Davis’ flagship PC Magazine, while the Game Group includes Electronic Gaming Monthly. The report said private equity firm Quadrangle almost bought Ziff Davis’ Enterprise group in November but that talks have since stalled. The Enterprise Group includes Baseline, eWeek and several other b-to-b media properties. Robert Callahan, chairman-CEO of Ziff Davis Media, told Media Business that he would not comment on the report, nor would Quadrangle or Lehman Brothers. “Quadrangle got cold feet on the print side,” said one media investment banker, who asked not to be identified. “It was trying to buy Ziff’s online portfolio, but I can’t imagine Ziff selling online and not its print assets, which is what got the company in the position it’s in right now.” The analyst added: “Ziff burned through a lot of cash in 2006, and the pressure is going to be on this year.” Ziff Davis Holdings, parent of Ziff Davis Media, announced in July that it is “exploring strategic alternatives” for the technology publisher and said the company retained Evercore Partners and Lehman Brothers as R ancial advisers to assist in a possible sale. fin Since last summer there have been periodic reports of a possible Ziff Davis sale—either the entire company or in clusters—but nothing has materialized. Private equity firm Willis Stein & Partners, which owns Ziff Davis Media, would likely take a loss “in the hundreds of millions” of dollars, according to an industry observer who requested anonymity. Sales discussions are “not going well,” the observer said. “They were aiming to have [a sale done] by the end of 2006. … Some of [Ziff Davis’] books are in decent shape, and it’s not an unattractive business. The question is how people value them and whether [potential] buyers want to go up against CMP and IDG.” If Ziff Davis Holdings tries to maximize its return by selling the business units separately, it would mirror the last time Ziff Davis changed hands. In late 1999 and early 2000, Japanese conglomerate Softbank carved up the company, selling Ziff Davis Media to Willis Stein, which bought the magazine assets for $780 million in cash, and ZDNet to CNET for $1.60 billion. Ziff Davis’ online revenue continues to grow significantly, which is partly attributable to the fact that the company essentially started from scratch in 2000 after selling ZDNet. Ziff’s consolidated EBITDA rose to $4.4 million for the third quarter of 2006, compared with $1.5 million a year earlier; the growth was primarily due to the company’s online businesses. Online revenue through September increased 32%, while print revenue excluding closed publications fell 14%. eport shows record number of media deals in ’06 A record 151 media deals took place in 2006, up 33% from 114 deals the previous year, according to a report released by media investment bank DeSilva & Phillips. Last year’s number of deals topped the previous record of 124 set in 2004. In dollar volume, the 2006 total of $20.50 billion was 242% greater than the $6.00 billion recorded in 2005. Two major deals accounted for a large share of the dollar total: the $11.10 billion sale of VNU to a group of private equity companies and the sale of Reader’s Digest Association for $2.40 billion, including the assumption of debt. The b-to-b sector had nine of the top 15 transactions and accounted for 101 of the 151 total deals last year. —M.S. mediabusinessonline.com | January 2007 | Media Business | 3 Warning : Unknown : The session id contains invalid characters, valid characters are only a-z, A-Z and 0-9 in Unknown on line 0 Warning : Unknown : Failed to write session data files . Please verify that the current setting of session.save_path is correct /var/lib/php/session in Unknown on line 0 http://mediabusinessonline.com

Table of Contents for the Digital Edition of BtoB Media Business - January 2007

Contents
Upfront
Cover Story
Feature
Sales & Marketing
M&A
Events
Production
Online
Circulation
People
Benchmarks
Endnote

BtoB Media Business - January 2007