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IBM leaves ZD Comdex; booth clash turns bitter

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The recent defection by IBM Corp. and drastic scaling back by Intel Corp. have seriously challenged the maxim that you have to exhibit at ZD Com-dex/Fall if you're going to be a player in the computer industry.

The decisions by IBM and Intel not to exhibit at ZD Comdex/Fall this year follow similar moves in years past by other major computer companies and renews the debate about whether the trade show has gotten too big, attracts too many non-qualified attendees and is, ultimately, not worth the required investment.

Tech marketers have long privately grumbled about the costs and hassle of going to ZD Comdex/Fall, which draws more than 200,000 attendees -- about twice as many conventioneers as Las Vegas has hotel rooms.

But IBM's departure has erupted into the biggest public dispute between the show and a vendor since some key exhibitors early this decade mulled pulling out because of disagreements with Comdex founder Sheldon Adelson.

Compaq first to go

Neither IBM nor Intel are blazing new trails.

Compaq Computer Corp. quit the nation's biggest computer show early this decade and has gone on to become the world's No. 1 PC marketer.

Dell Computer Corp., No. 3 behind IBM, ditched its Comdex exhibit last fall in favor of smaller private meeting rooms where it could target select customers, analysts and press.

Intel, the dominant PC chip maker, next fall will jettison its high-profile display in favor of private meeting rooms, and Digital Electronics Corp. said it's considering a similar move.

"Up until now, people thought you had to go to Comdex/Fall," said Bob Singer, Intel's director of corporate marketing communications and events.

"I'm glad companies like IBM and Intel have made that decision to challenge the sacredness of Comdex/Fall. . . . It's an important message we want to get out to show managers in general: A show like Comdex -- any show -- is always up for review in its return on investment."

Shows can win or lose: Intel is buying its first booth at the smaller ZD Comdex/Spring show even as it scales back the costly fall show.

IBM frees up $3 million

At about $50 a square foot -- the price for next fall's show -- the 15,000- to 18,000-square-foot space ZD Comdex had expected IBM to rent would run $750,000 to $900,000. But space rental is only 20% to 25% of the cost of exhibiting at ZD Comdex, with displays, lodging, promotional materials and other expenses making up the rest.

So IBM's move could free up at least $3 million; IBM said it will reallocate the savings to other shows.

ZD Comdex's founder, Mr. Adelson, sold the show in 1995 for $800 million to Japan's Softbank Corp., which separately bought Ziff-Davis, New York. This fall, Ziff-Davis took over the show business, renamed ZD Comdex & Forums, positioning it to offer marketers an integrated package including advertising, research, training and trade shows.

Go tell it on Wall Street

The integrated package is central to the story Ziff-Davis is expected to pitch to Wall Street in an anticipated 1998 initial public stock offering, a transaction that could soothe Softbank's complex financial woes.

But IBM's move shows tech marketers aren't always interested.

On the opening day last November of Comdex/Fall, Ziff-Davis Chairman-CEO Eric Hippeau took the stage before a keynote speech to announce the merger of Comdex and Ziff-Davis. That same day, IBM, a Comdex participant since the show's beginning two decades ago, formally pulled out by declining to sign for space for IBM and its Lotus Development Corp. unit at the next fall show.

IBM said it intended to leave quietly: When the first press report of IBM's departure appeared in Business Marketing's sister publication Advertising Age early last month, an IBM spokesman said simply that the frenzied show didn't fit with IBM's focus on selling complex "solutions" of products and services.

But a week later, ZD Comdex President-CEO Jason Chudnofsky came out swinging, contending IBM left only after botching its chance to sign for space.

Comdex explains

In an extended interview last month -- and in a press release that surprised Ziff-Davis and IBM -- Mr. Chudnofsky offered a detailed explanation of IBM's departure.

Mr. Chudnofsky's story:

Before the November show, IBM had given every indication it intended to return for '98. But Jim Hasl, IBM's director of worldwide business shows, tried to leverage IBM's clout as a Ziff-Davis advertiser by pushing Mr. Hippeau and Mr. Chudnofsky for a deal on ZD Comdex.

Mr. Chudnofsky refused to deal.

"I told them that is not part of our culture," he said. "I do not want to be put in a position of a used car salesman."

At ZD Comdex/Fall, each exhibitor is given a booth selection priority number based on when the company first displayed at the show; IBM ranked No. 37 out of about 2,100 exhibitors. So, Mr. Chudnofsky explained, IBM showed up at the appointed hour the opening day of the show to pick space.

IBM selected its location -- but then asked that the space be reconfigured. Comdex told IBM that long-standing rules precluded Comdex from altering the space; show managers offered IBM alternatives. IBM staffers then huddled with Mr. Hasl, but by this time IBM's time slot had passed. Toshiba Corp., No. 61, swept in to sign for IBM's space. Informed of this, the IBM team left without signing for space -- losing its place in line.

"Toshiba bought all the space that IBM had and IBM got knocked out," Mr. Chudnofsky said.

Mr. Chudnofsky said ZD Comdex has been told that Mecklermedia Corp., Westport, Conn., is giving IBM 15,000 square feet of free space at a rival show, Internet World, in return for an endorsement by the blue-chip computer company.

Mr. Hasl is a "loose cannon" who has been covering IBM's "strategic error" in not signing for ZD Comdex space by calling around the industry asking for support and "possibly a boycott" of ZD Comdex, Mr. Chudnofsky said.

Lotus executives, he added, are "really upset" by IBM's decision.

"I have a tremendous amount of respect for IBM," Mr. Chudnofsky said. "I believe they are being manipulated right now, unfortunately, or misinformed."

Others dispute the story

Alan Meckler, chairman of Mecklermedia, calls it "an absolute lie" that IBM is getting a special deal or free space at his show.

"The gentleman is delusional," said Mr. Meckler, adding that Comdex is "living on the vapors of the past" when the world has moved on to the Internet.

Mr. Hasl through a spokesman declined to be interviewed, and Lotus executives didn't return calls. But IBM spokesman John Bukovinsky forcefully rebuts all aspects of Mr. Chudnofsky's story.

The spokesman stressed IBM is paying for expanded space at Internet World based on the audience the show draws and IBM's focus on Internet products and services.

Mr. Bukovinsky said IBM has mulled leaving Comdex for several years, partly because Comdex has declined to submit to an audit of attendees by a third-party concern, such as Audit Bureau of Circulations. Comdex instead relies on an audit done through Decision Technologies Corp., a survey software and services company partly owned by Softbank.

Indeed, in a November 1996 story, Mr. Hasl told Business Marketing that IBM had conducted research showing that attendees found Comdex too big, but that at that point the show still was reaching "serious" buyers.

A ZD Comdex spokeswoman this month declined to discuss the issue, saying IBM and ZD Comdex now have agreed not to make more public comment about their differences.

Mr. Bukovinsky said IBM had decided before the November show that it would be leaving.

"Jim [Hasl] has the responsibility for business shows for the entire company, and he makes these decisions with the full support of IBM senior management all the way up the line," he said.

ZD Comdex/Fall is too big and does not draw the non-technical business managers -- such as heads of manufacturing or marketing -- who increasingly buy IBM's solutions, Mr. Bukovinsky said.

The show still grows

Comdex/Fall, to be sure, continues to thrive: Mr. Chudnofsky expects booth space this fall to grow 10%.

But being biggest is not necessarily an advantage.

Said Melissa Bachelder, executive director of the Computer Event Marketing Association, a group of exhibitors, trade show operators and services companies: "No show is a sacred cow."

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