With ink on sale finally dry, VNU shakes up management

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Now comes the hard part.

After spending much of the past year in a state of uncertainty following its failed bid to acquire health care researcher IMS Health, VNU seems to have finally turned a corner.

The media conglomerate--whose assets include the Nielsen TV ratings service, media research firm ACNielsen and a portfolio of 45 trade titles, including Billboard and The Hollywood Reporter- -recently made a series of upper management changes designed to enhance the company's products and services, more effectively integrate its three main business units and rebuild its reputation.

The changes came two months after a consortium of private equity firms, called Valcon Acquisition, bought VNU for roughly $11 billion. The company officially changed its name to VNU Group and in June delisted from the Amsterdam stock exchange.

The executive changes culminated in late August with the appointment of David Calhoun, former vice chairman of General Electric Co., as chairman-CEO. He succeeds Rob Ruijter, who has served as interim CEO since June and who will continue as VNU's CFO. Calhoun, who has no previous media experience, was not available to comment, according to a VNU spokesman.

Calhoun also served as president-CEO of GE Infrastructure, where he was responsible for the company's aviation, energy, oil and gas, transportation and water units, which are expected to generate a combined $47 billion in revenue this year and employ more than 85,000 people. By comparison, VNU reported 2005 total revenue of $4.3 billion and has about 41,000 employees.

Calhoun's appointment was preceded by a shakeup at VNU Business Media. Michael Marchesano, CEO of the unit since 2001, was named exec VP-chief transformation officer, a new position. In this role, Marchesano, who will report directly to Calhoun, will lead VNU's Project Forward, a three-year initiative designed to cut VNU Business Media's annual operating costs by a reported $160 million.

"We need to look at out how we can better serve our customers and break away from silos," Marchesano said. "We've been in a holding pattern the last 18 months and can now move forward."

Asked how Marchesano will now be involved in the company, Ruijter said: "The promotion takes Mike out of books and trade shows and into the company overall. [The new owners] are fully confident that he can bring a lot more value to the bottom line, and he'll be at the center of what we're doing for the next few years."

B-to-b media veteran Robert Krakoff, who was most recently chairman-CEO of media consulting firm Blantyre Partners, was brought in to succeed Marchesano as CEO of VNU Business Media. The unit generates about $750 million in annual revenue--the smallest total among the company's three main divisions. It'll be Krakoff's job to squeeze more value out of the unit.

"Now that the future is clear, the question is, how can we go and provide a solid return for the investors?" said Krakoff, a former CEO of Advanstar Communications and vice chairman of Reed Elsevier. "You don't look at magazines and trade shows, but markets and how you can grow those markets either organically or through acquisition."

Roland DeSilva, a partner in media investment bank DeSilva & Phillips, said: "It seems to me that the key priority should be to expand [the b-to-b media] portfolio and rationalize it within the strategic context of the new ownership."

A major pruning of the division has been under way for months. In August, 26 staffers were let go from the Billboard Information Group, one month after VNU merged Billboard Radio Monitor into Radio & Records .

Around the same time, VNU Business Media sold Sporting Goods Business and related properties to the SportsOneSource Group, an online information source for the sporting goods industry.

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