Two of the major b-to-b news stories this weekâthe restructuring at Ziff Davis Enterprise and the massive downsizing at Nielsen Co.âhave interesting back stories.
When Steve Weitzner was named CEO of Ziff Davis Enterprise in January, he announced a major restructuring within days. The move surprised observers, but included no downsizing. The downsizing came this week.
But the cuts may have been foreshadowed last month when Insight Venture Partnersâthe company that carved out and acquired for $160 million a portion of Ziff Davis Media last Juneâtook on a second private-equity partner. The new co-owner of ZDE was Bessemer Venture Partners, which put $20 million into the company in a move characterized as providing funding for acquisitions.
That may not be the case. Private-equity firms, says one industry source, are highly reluctant to dilute their equity position, and would only choose to do so in the event that they needed to-presumably because performance goals were not being hit.
This is, of course, pretty much pure speculation, but equity is the most expensive form of capital, and it's more likely that the BVP investment is a sign of turbulence than it's a bullish greenlight for acquisitions.
Regarding the Nielsen downsizing, one observer told me that it looks like standard General Electric practice. Of course, Nielsen CEO David Calhoun comes from GE. "It's the old GE playbook," the observer said. "They get handed their marching orders. Grow revenue in the high single digits and EBITDA by 15 percent. No questions asked."
According to a study by MediaVest, magazines are more trusted than online for content in the three areas of entertainment, food/cooking, and fashion/beauty. But online is more trusted for health/wellness information.
Here are the five key findings of the study:
1. Print is more trusted than online in every category but Health/Wellness. Readers find print more trustworthy than online by a margin of 24 percentage points for Fashion/Beauty, 7 points for Food/Cooking, and 5 points for Entertainment.
2. Readers find online more Health/Wellness more trustworthy online than in print by a margin of 3 points.Despite the abundance of online content, few see online replacing print, with just 12% of respondents strongly believing that a publisherâs website could easily replace the printed magazine within the next 5 years.
3. Titles fail to deliver value online. 79% of dual magazine/online users agree that the online site should provide something new & different from the magazine. However, only 44% strongly believe that the publishers' sites are actually offering something unique.
4. Low duplication between print and online. Hovering between 1% and 6% for all categories but entertainment, where for certain titles, duplication reaches 10% at most.5. Fashion/Beauty relies most faithfully on the printed publication, as it focuses on general trends. People are seven times more likely to go to the print publication for this category.
Read more here ...Â
Yesterday, FOLIO: reported on the lastest restructuring at Ziff Davis Enterprise. For those ZDE "completists" out there, here's the full e-mail exchange I had with CEO Steve Weitzner:
From: Dylan StablefordSent: Thursday, April 10, 2008 1:46 PMTo: Steve WeitznerSubject: folio: inquiryHi Steve:Iâm told ZDE is beginning its restructuring. Can you confirm:How many jobs were affected?Who was promoted?Are there more job cuts coming?What is the next step?Iâm on a tight deadline, so please get back to me as soon as possible.Thanks!DylanFrom: Steve WeitznerSent: Thursday, April 10, 2008 1:53 PMTo: Dylan StablefordSubject: RE: folio: inquiryDylan I will be back to you in just a few minutes. Was in the middle of something.From: Steve WeitznerSent: Thursday, April 10, 2008 2:09 PMTo: Dylan StablefordSubject: RE: folio: inquiry> How many jobs were affected?Weâre not commenting on the number of jobs affected but the changes we are making will be less extreme than some recent layoffs in the media industry. I am truly concerned with the loss of even one job and I wish this action were unnecessary. However, there are a number of changes to our structure that are fundamental to our continued success. > Who was promoted?Larry Walsh was promoted to VP and Group Publisher of our channel products. Kirk Laughlin was promoted to Managing Director of our Live Events Business. In addition, we announced that Mike Azzara has joined the company as SVP of product management for our online network and print brands. And Kevin Neary has joined as EVP and CFO. > Are there more job cuts coming?There are no additional cuts planned at this time. >What is the next step?We will have additional announcements coming up shortly regarding our expanded focus on online and user-driven content as well as improvements to our sales and client services operations.From: Dylan StablefordSent: Thursday, April 10, 2008 2:13 PMTo: Steve WeitznerSubject: RE: folio: inquiryThanks Steve. Keep us in the loop regarding anything upcoming.One more question â how many people are employed at ZDE?From: Steve WeitznerSent: Thursday, April 10, 2008 2:18 PMTo: Dylan StablefordSubject: RE: folio: inquiryApproximately 200.From: Dylan StablefordSent: Thursday, April 10, 2008 2:20 PMTo: Steve WeitznerSubject: RE: folio: inquiryThanks. Last question, I promise â would you consider this the second round of the planned restructuring. Or first?From: Steve WeitznerSent: Thursday, April 10, 2008 2:39 PMTo: Dylan StablefordSubject: RE: folio: inquiryDylan, I wouldnât call it a planned restructuring. There arenât any rounds. When I first joined we made a number of changes in roles and responsibilities to more seamlessly integrate our operations across product lines, but without changing the number of positions in the company. The changes this week are the result of greater insight into how we can streamline our operations and better align our resources to meet the needs of our audience and our customers.
From: Dylan StablefordSent: Thursday, April 10, 2008 1:46 PMTo: Steve WeitznerSubject: folio: inquiryHi Steve:Iâm told ZDE is beginning its restructuring. Can you confirm:How many jobs were affected?Who was promoted?Are there more job cuts coming?What is the next step?Iâm on a tight deadline, so please get back to me as soon as possible.Thanks!Dylan
From: Steve WeitznerSent: Thursday, April 10, 2008 1:53 PMTo: Dylan StablefordSubject: RE: folio: inquiryDylan I will be back to you in just a few minutes. Was in the middle of something.
From: Steve WeitznerSent: Thursday, April 10, 2008 2:09 PMTo: Dylan StablefordSubject: RE: folio: inquiry> How many jobs were affected?Weâre not commenting on the number of jobs affected but the changes we are making will be less extreme than some recent layoffs in the media industry. I am truly concerned with the loss of even one job and I wish this action were unnecessary. However, there are a number of changes to our structure that are fundamental to our continued success. > Who was promoted?Larry Walsh was promoted to VP and Group Publisher of our channel products. Kirk Laughlin was promoted to Managing Director of our Live Events Business. In addition, we announced that Mike Azzara has joined the company as SVP of product management for our online network and print brands. And Kevin Neary has joined as EVP and CFO. > Are there more job cuts coming?There are no additional cuts planned at this time. >What is the next step?We will have additional announcements coming up shortly regarding our expanded focus on online and user-driven content as well as improvements to our sales and client services operations.From: Dylan StablefordSent: Thursday, April 10, 2008 2:13 PMTo: Steve WeitznerSubject: RE: folio: inquiryThanks Steve. Keep us in the loop regarding anything upcoming.One more question â how many people are employed at ZDE?
From: Steve WeitznerSent: Thursday, April 10, 2008 2:18 PMTo: Dylan StablefordSubject: RE: folio: inquiryApproximately 200.
From: Dylan StablefordSent: Thursday, April 10, 2008 2:20 PMTo: Steve WeitznerSubject: RE: folio: inquiryThanks. Last question, I promise â would you consider this the second round of the planned restructuring. Or first?
From: Steve WeitznerSent: Thursday, April 10, 2008 2:39 PMTo: Dylan StablefordSubject: RE: folio: inquiryDylan, I wouldnât call it a planned restructuring. There arenât any rounds. When I first joined we made a number of changes in roles and responsibilities to more seamlessly integrate our operations across product lines, but without changing the number of positions in the company. The changes this week are the result of greater insight into how we can streamline our operations and better align our resources to meet the needs of our audience and our customers.
Bad news in the world of b-to-b journalism. Nielsen Business Media, formerly known as VNU, has laid off a number of editorial staffers. FOLIO: magazine says it's "not immediately clear how many employees have been let go." FishbowlNY says between 40 and 50 jobs have been eliminated and cites an anonymous tipster who claims "most cuts (are) coming from the company's digital and conference arms."It's been a tough year and a half at Nielsen. In that time the company has gone through a reorganization and name change, an ethics scandal and an earlier round of layoffs. And my heart goes out to the folks who lost their jobs today. I know what that's like. I've been laid off in the past. It's a truly awful feeling.But the truth is that all of us in b-to-b are vulnerable now. And all of us need to be prepared for the possibility of job loss.Several months I wrote on this blog that I was worried that 2008 would prove to be an awful year for our industry. And every week seems to bring news that indicates I'm right to be nervous.Many of the major players in b-to-b publishing are leveraged to the hilt. And they seem to have bet the house on being able to find extraordinary amounts of new revenue in the online world. But since so many b-to-b editors still don't get Web journalism, many b-to-b Web sites remain laughably bad. And as the economy slows down, I just can't imagine that people will line up to spend money on crappy Web sites.Even the very best Web sites in b-to-b are in trouble this year. Over and over again I hear from people who are struggling with demands from senior management for levels of growth that simply cannot happen. The ugly truth is that when the economy slows, you can't expect an every-growing number of people to to line up to spend an ever-increasing amount of money on any Web siteâno matter how gorgeous, well-written, and filled with multimedia it may be.I hope I turn out to be wrong about this. But I don't think today's layoffs will be the last we'll see in 2008. I'm worried that things are bad. I'm worried that they're getting worse. And as I said just last week, because so many B2B publishers are "privately held, we just don't know how ugly the balance sheets may be."Note: Although Nielsen Co., the parent of Nielsen Business Media, is privately held, much of its finances are reported publicly. And things ain't pretty at Nielsen. Several days ago the company announced it would buy IAG Research for $225 million. To finance that purchase, Nielsen said it would sell $220 million in bonds. Or, in layman's terms, the company will borrow $220 million. But that new debt comes on top of some $8.47 billion in existing debtâand that has the credit agencies shaking their heads.Even prior to word that Nielsen would return to the bond market to borrow again, Moody's had rated Nielsen's last round of debt Caa1âsome seven levels below investment grade! That's about as junk-like as a junk bond can be.
Santa Monica-based Demand Media is one of those dot.coms traditional publishers should be paying close attention to. The network of more than 60 general and special interest sites such as eHow.com and Cracked.com draws more than 60 million unique visitors per month by leveraging user-generated content including articles and video (according to a Forbes article, Demand Media has paid out more than $20,000 to one contributor at ExpertVillage.com). It's a model that's working. Demand Media generates about $150 million, is profitable and there is talk of prepping for an IPO in 2009. But the biggest takeaway for traditional publishers isn't so much how Demand has been able to leverage user-generated content as a viable business model but the way the company has developed algorithms that predict how content will perform in terms of driving traffic.Before we get too far into this, no, they aren't sharing the secret sauce (partly for obvious proprietary concerns but also because partnering with traditional publishers is an easy meal ticket). But co-founder Shawn Colo does offer some general tips for publishers on how to take stock of their content. "You have to follow logic of âit's a search-driven world,'" adds Colo. "Editorial quality has nothing to do with findability but it has everything to do with keeping the audience engaged."
1. Can your editors write a killer headline? Great. Now make sure they can write it for the search engines too. "Our staff editors spend a lot of time working on titling and making sure articles are optimized for search," says Colo. "For video, editors might go back in and edit the metadata to make sure they're optimized for search as well." 2. Collect and analyze as much data as you can, including keyword pricing. "You've got to have a lot of data to really prioritize which articles work well," says Colo. "It's a combination of a lot of things we as a company have built, a lot of what we've done on the registrar side, look at key word prices as a metric of how to determine value."3. Give content the chance to mature. In today's "go-go" Web atmosphere, constant updates are mandatory. But does that reduce the chance of people seeing it? "We worked with a publisher who had an editorial calendar that they refreshed weekly," says Colo. "But they were changing articles just as they were reaching their maturity from a search perspective. Just as they hit maximum earning potential, they were taken off the site."4. Context, not content is king, and that's true for social media as well. "Now that you have a community tab, that doesn't mean you have a community," says Colo. "You want to make sure people can comment within articles and you need to show profiles in a contextual way, not just have them off in this dark community corner."
Vogueâs latest coverâfeaturing basketball star Lebron James and supermodel Gisele Bundchenâwas notable for a number of reasons. For starters, it was just the third time a man had appeared on a Vogue cover (George Clooney and Richard Gere being the other two) and the first African-American male to do so. But the magazine quickly came under fire for what bloggers and other media critics saw as perpetuating the ugly stereotype of a black man as the âwild, savage, white-woman-obsessed beast,â as Gawker Media blog Jezebel put it. (One even suggested that those supporting the cover do a Google image search for âKing Kongâ for a comparison.)
Below, FOLIO:âs roving panel of designers weigh in on the controversial cover.
NAME: Stephanie FaucherTITLE: Design director, ComputerworldCRITIQUE: My first reaction to this cover when I saw it at the grocery store was that the two images were so oddly paired. Giselle's exuberant face and posture is just so unnatural next to Lebron's manly roar. She almost looks like a cutout. I honestly didn't think "King Kong," I just thought "strange." But since having read the various reviews and looked at the comparison photos, the resemblance to King Kong is uncanny. I can't help but wonder if Vogue didn't intend to spark a controversy over the stereotypical nature of this image. After all, what better way to sell magazines than to run a controversial cover?
NAME: Kelly McMurrayTITLE: Creative director, 2communiqueCRITIQUE: I heard there was controversy over this cover and went to the newsstand to check it out. I was looking for a controversial headline or a photo inspired by an iconic film still. What I see is an athlete in an aggressive stance. In my opinion this is a case of the people/media blowing something out of proportion and giving more attention to something than it merits.
NAME: C. Winslow Taft, Jr. TITLE: Senior art director, mental_floss magazineCRITIQUE: I don't feel qualified to comment on what many contend to be the controversial aspects of this cover. However, taking all of that out of the picture and simply looking at it as a cover, I don't think this is one of Vogue's most creative or enticing covers. I'm eagerly awaiting some amount of Brodovitch or Henry Wolf to show itself again on the cover of these magazines that show so much experimentation in their ideas for upcoming clothing trends.
NAME: Jennifer PerezTITLE: Art director, Perez DezignCRITIQUE: Doesn't every cover perpetuate stereotypes? The weirdest thing about this cover is how bad Gisele looks.
NAME: Tim O'BrienTITLE: Freelance illustrator, Rolling StoneCRITIQUE: I'm critiquing this cover AFTER the media began speculation about whether or not it's a racially insensitive cover. I have to think that this is a case of a cover where all who had a hand in it getting published; photographer to designer to editor all thought only of this as a fun, dynamic image. Should designers carry around a special filter to question whether a cover or image is going to be interpreted as being viewed as inappropriate? I think so. Once the issue is raised, whether or not it is based on the designer's real intent, it's all that is remembered. Often cited as Time darkening a photo of O.J. Simpson, Matt Mahurin years ago did with an illustration what he does to ANYTHING he illustratesâhe created a sense of depth and murkiness that make his illustrations so unique. The contrast from that image next to Newsweek running the same source image made it look like Time decided to darken O.J.âthis is ludicrous of course and since that cover, I feel these kinds of blind spots are not so common. Vogue is always a type nightmare. I wonder if people actually choose to buy it based on any promised headline on the cover? I think people who buy this magazine would do so even if they had fewer headlines and allowed their cover image to have more impact. As for the image itself, I agree that the most remarkable thing here his how this isn't a good shot of Giselle and her neck is quite wide. I keep imagining that shoot and how they had to look 'fun' and make all kinds of runs at being active.
NAME: Dan TrombettoTITLE: Art director, FOLIO:CRITIQUE: The racial/stereotype issues aside, I simply do not like the shot here. It feels awkward to meâlike Gisele is toppling over, almost as if she is tripping over Lebron's size 15 left sneaker. It also feels like the cover lines aren't playing so well with the image. Feels a little congested.
What do you think? Leave your own critiques in the comments section below ...
Much like Bobby McFerrin's chirpy ode to blissful ignorance, ABM recently attempted to put a happy spin on its analysis of its own BIN report.
Essentially, both print ad revenue and pages ended 2007 downânot by a lot, 2 percent for revenue and 3.35 percent for pages, but down. And this after a flat 2006 in revenue and a slight decline in pages.
Now these kinds of things can be looked at from any number of angles. And no one, especially an association representing an entire industry, wants to be the bearer of bad news, much less voluntarily even touch a doomy outlook. For example, ABM notes that 13 of the 21 categories tracked showed increases in respective revenues. Fair enough. But then their analysis of the report takes it one step too far.
The computing, software, telecom category has been a freefall for the last three years, declining almost 30 percent in revenues since 2005â17.59 percent alone in 2007, according to the BIN reports.
Yet here's what ABM had to say in its analysis of the 2007 report entitled "Business-to-Business Media Experiences a Robust 2007":
"In fact, ignoring the âComputing, Software, Telecomm' category would result in an overall 0% change over 2006."
I love that! So why not just keep going with the other two top declining categories, business, advertising & marketing (-10.7 percent) and travel, business conventions & meetings (-6.95 percent)? I bet ignoring those as well would rocket 2007 to "robust" indeed.
It can be harder than one might think to find an out-of-the-box cover for Face Up each month. This is especially true in b-to-b, since itâs not as simple as scanning the newsstand for a stand-out.
Thatâs why I was so excited to come across Functional Ingredientsâ March issue, which looked to me like a young boy running on glassâbut in jean shorts, like he was on recess at school. A person in every day life rather than an athlete running in an event, something we see all the time on the newsstand.
Turns out this annual issue usually features ingredients on its covers. Humans hardly ever make the cut. So the magazine went even further out on a limb and agreed to put their work to the test, offering the cover up for critique by FOLIO:âs Face Up panel of designers.
Overall, response was positive with some constructive criticism sprinkled in.
Now your mission, should you choose to accept it:
1. Offer your input on this cover by taking the Face Up survey (and a chance to win an iPod shuffle).
2. Offer up your magazineâs amazing, under-the-radar cover by emailing me at email@example.com.
Just days ago I urged journalism teachers to force students to learn about business and finance. In particular, I want students to understand debt financing, which has put a stranglehold on many publications.My hope is that by understanding the murderously difficult environment in which many publishers operate, students will made better decisions about their career path.To that end, I offer a reading assignment.Reuters has published a lengthy and well-reasoned article showing that it will be damn near impossible for Sam Zell to avoid a default at the Tribune Co., which is groaning beneath $4 billion of debt and some tough-to-meet debt covenants. You can check out the article here. Students who take the CliffNotes approach to study can get everything they need from PaidContent's take.Those of us in b-to-b should avoid the urge to feel smug about the nightmare that is newspaper finance. In our end of the industry, things are likely just as bad. But since so many of our major players are privately held, we just don't know how ugly the balance sheets may be.And as I've said before, I'm worried.Read more here ...
The Players Club, the magazine for professional athletes founded by Lenny Dykstra and published by Doubledown Media, had its launch last week. I had an interview scheduled with Dykstraâapparently notorious for missing interviews with journalists but one helluva stock picker!âbut he never called. (Naturally, I waited by the phone, sucking on a hunk of chaw for six hours, but no âNailsâ for me.) I had plenty of questions, the first of which is why Dykstraâand, moreover, Doubledownâthinks a magazine like this will work when others, specifically Overtime, have failed.
Hopefully heâll reschedule.
In the meantime, I thought it might be useful to take a peek inside the 170-page debut issue. The magazine itself is big and heavyâkind of like a W for the athlete set. And then, the ads. There are a lot of âem, mostly for private jet services. (Whether or not these ads are paid or barter or gratis is another story.)
The content is pretty standard fareâin other words, unmemorable listicles (âAll-Money All-Starsâ), grids (âWhatâs hot in your world?â), charts (âFitness Drinks: the box scoreâ) as-told-to columns by John McEnroe and Tim Brown, an awkward fashion spread featuring Philadelphia Phillies outfielder Pat Burrell and vapid profilesâincluding the laughable cover story on Yankees shortstop and noted nightclub connoisseur Derek Jeter, by otherwise respected sportswriter Bob Klapisch. (Sample Jeter quotes: âIâve really toned it down away from the fieldâ and âI watch movies.â)
One feature, though, did catch my eye: a six-page photo spread of a 12,000-square-foot mansion outside of Los Angeles, built by Wayne Gretzkyâa member of the Players Club âboard of directorsââthat sold in 2007 but is âon the market again.â
The unmentioned current owner of that estate: Lenny Dykstra.
Nothing like a free, high-end glossy house ad in a down real estate market, right? Now thatâs a true player.
I've written before about the propensity for satire at my old alt-weekly. But one ill-fated attempt at mirth at someone else's expense was a year-in-the-[not]-making spoof of the Washingtonian, a city magazine that, in my 11 years in D.C., has cycled through the same yearly schedule of lowest-common-denominator content over and over (and over) again. My old editor (whose name I won't mention) summed up the problem: "How do you satirize a magazine that satirizes itself every month?"
His words came back to haunt me as I tried to think of something to say about Baby Couture (the magazine that "puts the âcoo' in Couture") funnier than anything that appears in the first issue. At least I assume it's the first issue, there is no volume or issue number to be found. That, in itself, is proof of inexperience. They have not yet suffered the wrath of a thousand librarians, who summon up the hostility accumulated during a life enduring the twin frustrations of customer service and government bureaucracy for just such oversights. No one does poison-pen like a librarian, and little raises their dander like the omission of essential cataloging information. They don't ask for much, they ARE JUST TRYING TO DO THEIR JOB!
So, I'll try to review BabyCouture with a minimum of snarkiness.
The cover hits two of the William Randolph Hearst trifecta, pairing babe Christine Costner with baby Cayden. Cayden? Now there's a name not chosen with those painful grade school years in mind.
Apart for the photogenic models, the image is not particularly suited for cover use. It has too much background detail forcing the designer to drop teasers into little nooks and crannies here and there in defiance of a logical hierarchy. Despite the typographical gerrymandering, much of the text is hard to read, thanks to both the picture and the achromatic pallet. The goofy type choices don't help-who thought kiddie handwriting would work with that ghastly wedding script? The awkward competition between cute and sophisticated remains unresolved on the inside as well.
Sensitivity to typographical conventionsâfrom SIC-able smart-quote-driven errors in headlines such as âFlip ân Flopâ which appears on page 14, right after âWash ân Wearâ on 13âdoes not burden the staff of of BC. They do have the whole product placement thing down thoughâChristina gets a 32 pt pull quote to wax poetic about her favorite brands. âKnuckleheadsâ is the winner for her little darlings, but she also likes âDiesel Kids and Baby Gap.â
The fashion plates are the usual pictures of childrenâthough most are not babies. The oldest models, who are probably seven or eight, follow kiddie pic convention of imitating the jaunty poses of adult models, which sells, I suppose, the fantasy that if you dress your kids like little adults, they will quit acting so goddamn childish. In truth, it can go down like thatâbut only after the sort of parental behavior that can cast a pall over an entire 200,000 sq. foot suburban shopping mall, and possibly spark intervention from child protective servicesâpotentially embarrassing for parents who shops at PradaKids.
I recognize that there are parents willing to invest $300 in ensemble outfits that will look great until the kid grows out of it in 6 months, or throws up on himself, whichever comes first. (Though in the case of my daughter Emily at that age, the smart money was on reflux.) But are there enough of them who arenât already reading the Timesâ SundayStyle section to support a magazine? And arenât most of those Times readers there for yuks, not shopping advice? I guess time will, tell. Lets hope this title lasts until its Carters wear out ...
[EDITOR'S NOTE: Buy Jandos' new book!]
A couple quick notes on Michael Arringtonâthe sleep-deprived founder of Silicon Valley blog TechCrunch and member of the 2008 FOLIO: 40âwhich didnât make it into his 350-word profile.
As far as TechCrunch sale rumors, he says that while they can be expectedâgiven his 2007 hire of Heather Harde, the ex-Fox Interactive executive responsible for $1.3 billion in acquisitions including that little $500 million MySpace dealâa roll-up scenario, leveraging a small network of blogs, is much more likely. âI donât know if weâre a quarterback of something like that or a defensive back.â
Or, you know, owner. Just donât expect ValleyWag to be part of that team.
Read Arrington's full FOLIO: 40 profile here ...