Additionally, a Cahners corporate restructuring elevates Brian Nairn to the new post of chief operating officer from exec VP. He will continue to oversee Cahners' business publications.
Cahners would not comment on the restructuring's effect on its flagship publication, Variety.
TWO ISSUES AT WORK
"There are two issues here," said Cahners President-CEO Bruce Barnet. "There's a softness in ad dollars, and there's our commitment to investing in our Internet sites."
In June, Cahners launched e-inSite, a Web portal aimed at the electronics industry. It also continues to develop its pioneering Manufacturing Marketplace Web site, which incorporates content from 23 Cahners publications and serves as an e-commerce sales channel for technical books.
Mr. Barnet said that in addition to its Web efforts, Cahners has invested heavily in information technology and production capabilities, which hurt earnings in the first half of this year.
Cahners, owned by Anglo-Dutch media company Reed Elsevier, posted a 45% decline in operating profit for the first half of 1999 compared with the same period last year.
REVENUES OFF THE MARK
Cahners' revenue was flat in the first half of this year, after the company had anticipated more than 7% growth. Manufacturing, travel and technology titles were especially hard hit.
Ad pages in Cahners' technology titles tumbled to 11,577 in the first half of this year, down 6.95% from the same period last year, according to Adscope, a tracking service.
In the first five months of 1999, ad pages in business publications overall fell 4.83% to 333,180.10, according to Competitive Media Reporting. Industry observers blame the decline on Asia's economic woes and the migration of marketing dollars to the Internet.
This most recent restructuring at Cahners comes on the heels of other changes at the company. At the end of July, the company announced a reshuffling of executive duties in magazine production and its travel group.
Earlier in July, Chief Marketing Officer Brian Kardon resigned, complaining that Reed Elsevier was not allowing Cahners enough freedom to pursue its Internet strategy.
Still, Internet investment continues at Cahners. The company, for instance, formed an alliance in July with uBid, an online auction site, with an eye toward facilitating the sale of business equipment on the Web.
A larger problem for Cahners, in this era of integrated marketing, may be the structure of Reed Elsevier, which places trade shows and conferences in the hands of Reed Exhibitions, a division separate from Cahners. Discussing the setup will likely be on Mr. Barnet's agenda when he meets Reed Elsevier's new CEO, Crispin Davis.
"A fundamental business strategy in this industry is the integration of trade shows and magazines," Mr. Barnet said. "It's something I want to bring up with the new management of Reed Elsevier."