Although other technology publishers have suffered similar setbacks in terms of shuttered titles, lousy earnings and deep staff cuts, the industry spotlight is once again on Ziff Davis Media Inc. following a series of dramatic moves designed to turn things around at the struggling company.
Ziff’s new chairman, president and CEO, Bob Callahan, who last month replaced ousted CEO Jim Dunning, is trying to put his stamp on a company whose fortunes have sagged in the last year along with the overall technology market.Callahan, who was unavailable for comment, has moved quickly to bolster the company: Earlier this month Ziff merged eWeek and Interactive Week and shut down the 120,000-circulation Smart Partner, resulting in the loss of 75 jobs. The latest layoffs followed two rounds of staff cuts earlier this year. The merged magazines will operate under the eWeek brand, with a circulation of 445,000. There will be an 8% increase in eWeek’s ad rates starting in January. In October, Ziff folded the heavily touted yet short-lived Expedia Travels. Earlier this year, the company shuttered another consumer title, Family PC. Before he was fired, Dunning apparently was on the verge of selling Ziff’s consumer crown jewel, Yahoo! Internet Life and its 1 million circulation to tabloid publisher American Media Inc. Callahan has since said the magazine is not for sale. Also last month, Ziff sold its half-interest in the parent company of MacWorld magazine, Mac Publishing L.L.C, to rival International Data Group, which now owns the entire entity.
Ziff has been grappling with profit and revenue declines. Third-quarter earnings plummeted to $3.5 million, from $32.4 million a year earlier. Revenue fell to $78.9 million, from $125.6 million, as the company saw a 47% drop in ad pages.
Kudos for Callahan
Callahan, former president of Walt Disney Co.’s ABC Broadcasting, so far has won kudos for his efforts to stem the red ink. But patience is rather thin in b-to-b publishing these days, as several CEOs have been pushed aside recently.
"It’s a good sign that Callahan is making decisions this early after starting," said Reed Phillips, managing partner at the New York-based media investment company DeSilva & Phillips. "He’s got to make the hard choices in the current climate, and that includes cutting back on properties that are losing money."
Opinion is divided on whether the latest incarnation of eWeek will fly with advertisers. The increase in eWeek’s circulation, boosted by 45,000 names from Interactive Week, might corral new advertisers but at the same time alienate Interactive Week buyers, who may take their business elsewhere because of increased rates, sources said.
"The Internet and information have started to blend, so it makes business sense; but I don’t know whether the market will accept it because the editorial base has blended, too," said Martin Walker, a magazine consultant and chairman of Walker Communications Inc. "The trouble with all of these tech books is there’s no distinction among them. There’s too much overlap, too much confusion."
Unisys Corp., which had regularly run ads in both eWeek and Interactive Week, will continue to run ads in the revamped eWeek for the rest of the year, said Donna Basilicato, a Unisys spokeswoman. The company is not committed to any tech title for 2002.
Tyler Schaeffer, senior VP-director of media brand planning for FCB Worldwide, whose clients include Compaq Corp and Avaya Inc., added: "The editorial is very different, and the buy is a different part of the media department. To simply say they can be folded together is a retrofit strategy. "
But Schaeffer, who is now huddling with Ziff on possible multi-discount ad deals, said Callahan could have an effective one-two punch in the marketplace by packaging two publications that debuted this year: Baseline and CIO Insight.
Baseline, which targets senior-level IT and C-level executives, launched last month. Initial advertisers include Novell Inc., Compaq Corp. and Oracle Corp. CIO Insight, which has attracted blue-chip advertisers such as AT&T Corp., IBM Corp. and Intel Corp., published its first issue in May.
"They are complementary yet different editorially," Schaeffer said. "It could be similar to Forbes and Fortune, which appeal to different levels of upper management but are of equal value to the tech buyer."