"This took me by surprise," said Reed Phillips, managing partner of media investment bank DeSilva & Phillips.
Speculation about the rationale for the move centered on David Levin, who took over as CEO of United Business Media, CMP Media's parent, on April 15 of this year. "My guess is that it's as simple as the new CEO wanting to have someone in that role that he was comfortable working with," said one investment banker who requested anonymity. "I can't imagine it's performance-related."
CMP Media insiders speculated that the move was made in an effort to spur growth at the unit, which has sputtered in delivering top-line improvement. Marshall, who has a financial background, excelled during the downturn at cutting costs and streamlining CMP.
In addition to previous cuts, the unit achieved $7 million in new cost savings in the first half of this year, according to UBM's interim results report for the period.
But some questioned Marshall's ability to grow the company. "We can't continue to cut our way out; we have to grow," said one insider.
In his statement about the management change at CMP, Levin focused on growth. "Steve [Weitzner] has the skills, knowledge and passion to make the business increasingly customer focused, to lead the online migration of the business and to drive top-line growth," he said.
While UBM as a whole boosted its revenue 19.7% in the first half of this year compared with the first half of 2004, CMP's revenue dipped 6.1% in the same time frame. Additionally, CMP's adjusted group operating profit dropped 9.8% in that period.
Growth the big challenge
Part of the challenge for CMP is developing growth at its print publications. In the first quarter of this year, for instance, not a single one of CMP's major titles-which include such stalwarts as InformationWeek and EE Times-delivered growth in ad pages compared with the first quarter of 2004. The best performers were Network Magazine, which posted an ad page decline of 5.8%, and CRN , which posted an ad page decline of 5.9%.
CMP has had its troubles since UBM bought the tech publisher in 1999, when the tech bubble was still expanding, for $920 million. In recent months, CMP has made a number of acquisitions, buying small but growing online media operations such as Light Reading.
In his statement, Weitzner emphasized these moves and CMP's online growth. "This growth will be fueled by our talented employees, who continue to accelerate change and build momentum with innovative products like `The News Show,' the Lead Nurture Program and mobilizedsoftware.com as well as value-added acquisitions like Light Reading."
Robert Crosland, managing director at media investment bank AdMedia Partners, said: "They [CMP] have had several strategic acquisitions recently. It kind of makes you wonder who's been pulling the strings. Only an insider can read the tea leaves."
"Gary guided CMP through difficult times over the last five years," Richard Mead, managing director at media investment bank Jordan, Edmiston Group, said of Marshall. "United [Business Media] is fortunate to have Steve in place to continue the resurgence of CMP under his leadership."