Ed Fitzelle is managing director at media investment bank Whitestone Communications.
Media Business: Do you think the latest flurry in media deals will continue well into this year?
I think it will for a couple of good reasons. One, buyers recognize that they can't wait around any longer for things to come to them. If they're going to grow, they need to start building again and putting in place the assets that will generate more cash flow and build up the scale that will improve the margins. Two, the business model has been sorted out. Sellers that have decreased their dependence on print and added many new lines of business—like sponsorships, conferences, training—are getting much more respect from buyers.
MB: Is QuinStreet Inc.'s recent purchase of Ziff Davis Enterprise a harbinger of other major b-to-b media deals in which the buyer purchases just the publishing assets?
That's going to happen. Everything has a life cycle. Product life cycles were accelerated by the onset of the digital age, so you will see more of that. A digitally oriented organization goes into some place like (ZDE) where an offshoot of the magazine publishing was data and customer lists and says, “Look, there's real data in here, and there's a database of customers. So let's go get those, and we don't need to continue the old model that was used to produce that data.”