Primedia Inc. last week announced a few more alliances designed to position the New York-based specialty and b-to-b publisher as a company with Internet cachet. The alliances included several consumer partnerships and one b-to-b deal, linking IndustryClick, Primedia's b-to-b Internet unit, with DigitalMediaNet.com.
While investors have generally supported chairman-CEO Tom Rogers' moves even before the latest announcement of Internet partnerships, impatience with Primedia has begun to appear on Wall Street. Case in point: Merrill Lynch & Co.'s report previewing Primedia's second-quarter results was titled, "Here Comes the Hard Part--Execution."
To help ensure his Internet strategy will be well executed, Rogers, who came to Primedia from NBCi last September, has hired executives from prominent publishing companies, especially in b-to-b.
David Ferm, former president of the Business Week Group, is now president of Primedia's business-to-business group, which includes Intertec Publishing and IndustryClick, the company's b-to-b Internet unit. And Tim Andrews, formerly head of Factiva, a Dow Jones & Co. and Reuters joint venture, is now president-CEO of IndustryClick, which includes sites such as AgriClick and Media Central.
"Primedia has a number of b-to-b assets in print, audio-video and trade shows that I thought we could really leverage against the Web," Andrews said of his attraction to the IndustryClick job.
IndustryClick figures in the alliance announced June 26 with DigitalMediaNet.com, a developer of online communities for the digital media market. As part of the agreement, Digibid, the auction unit of IndustryClick, created a co-branded auction center, called DigitalMediaAuctions.com, which can also be accessed at DigitalMediaNet.com. Digibid already has a similar deal to develop an auction site for Philips Broadcast.
The latest b-to-b agreements build on other alliances announced in recent months. The most prominent among these is Primedia's deal with CMGI Inc. The companies plan joint ventures to create b-to-b online communities and marketplaces in vertical industries such as agribusiness, digital entertainment, electrical/construction and telecommunications.
Andrews' team at IndustryClick has first-generation sites up in these arenas and is currently building what he calls "megaportals." TelecomClick, which is aimed at the telecom industry and built around such Intertec publications as Telephony, will relaunch in the third quarter, Andrews said.
These megaportals will mix daily news, how-to information and decisionmaking content to facilitate e-commerce. However, Andrews was careful to point out that the sites won't be cookie-cutter efforts.
In the digital media industry, IndustryClick relies on its own Digibid auction product for the e-commerce component. In some verticals, such as agribusiness, IndustryClick will partner with established e-commerce players, Andrews said.
Currently, IndustryClick is beta-testing software from MetaFarms, which develops software to help farmers manage hog production.
In addition to keeping an eye on customer needs, Andrews is trying to make IndustryClick appealing to potential hires. IndustryClick has moved its headquarters from Kansas City, Mo., to Princeton, N.J. "We wanted to make sure we had access to people with experience in the Web business, people that have experience in e-commerce as well as in creating Web content," Andrews said.
Attracting talent and developing partnerships are two key pieces of Primedia's b-to-b Internet strategy. A third piece is investment. In the second quarter, Primedia will have $10.4 million in cash costs on its
b-to-b Internet business, which is up more than 200% from the same period last year, according to Merrill Lynch estimates. Primedia will post $5.4 million in b-to-b Internet revenue in the second quarter, a boost of 125% from the same period last year, according to Merrill Lynch.
Merrill Lynch, apparently confident in Rogers and his hires, has set a target of $25 per share for Primedia. The share price has reached as high as $34.88 during Rogers' tenure but was around $20 last week. That, however, is better than $11 a share, which was the Primedia share price the last trading day before it was announced Rogers was taking over the company.