Reed Elsevier, the media and information giant with units across Europe and North America, has decided to ankle (or quit) running Reed Business Information, the U.S. magazine division that publishes Variety, as well as Broadcasting & Cable and Publishers Weekly. Reed cited an interest in getting away from the wide swings of the ad business, known in Variety-ese as the blurb biz.
"RBI is a well-managed, high-quality business, as evidenced by the success of its online growth and the control of costs," Crispin Davis, Reed Elsevier's straight-talking CEO, said in a statement today. "Its advertising revenue model and the inherent cyclicality fit less well, however, with the subscription-based-information and workflow-solutions focus of Reed Elsevier's strategy."
Variety reported that the company did not name any potential buyers or give a timetable for the sale. "The precise method of divestment of RBI will be the subject of review in coming months," said a company statement. In 2007, RBI had revenue of $1.76 billion, about 60% from advertising and 30% online. Adjusted operating profit was $233 million, according to Variety.
Analysts at Numis Securities signaled their approval of the disposition. "We expect the earnings of the reshaped group to be of still higher quality," they wrote, "cementing Reed's position as the more resilient stock in the sector."
The news came a day after Reed Elsevier released results for 2007, reporting essentially flat revenue of roughly $1.8 billion at the Reed Business Information unit. In addition to those mentioned above, Reed Business Information publishes titles including Multichannel News, Furniture News, Home Textiles Today, Industrial Distribution, Tradeshow Week and Asia Food Journal.