Recent events underscore just how serious Ziff-Davis is viewing the new ventures. It closed three publications and will lay off 10% of its employees in a restructuring brought about in part because of softness in the technology ad market, a blow to its print publications.
Ziff-Davis at the same time announced it would be issuing shares for a tracking stock for its ZDNet business. Although publications accounted for 62% of its total revenues last year, it's obvious Ziff-Davis believes multimedia products are its future.
Last May, ZDTV-a Ziff-Davis affiliate owned by Softbank Corp.- launched as a 24-hour cable channel aimed at computer and Internet enthusiasts. Ziff-Davis is expected to buy ZDTV late this year from Softbank, the majority owner of Ziff -Davis.
Apart from the cable venture and its 80-plus magazines-among them, the computer category's circulation and ad leader, PC-Ziff has a hand in online products, newsletters, trade shows, market research and computer-training programs.
"As the [technology] market became more mainstream, it became absolutely normal and natural for the people we were speaking to become interested in information from more and more sources," explains Ziff-Davis Communications Director Greg Jarboe.
ATTRACTING NEW ADVERTISERS
The landscape Ziff-Davis has fashioned, incorporating the magazines, ZDTV, ZDNet Internet site and other products, aims to attract those advertisers looking to reach a range of media consumers.
"Advertisers want to create packages, they want synergy. They want to be in all the best places, where customers of different types with different buying criteria are searching for products," explains Claude Sheer, president of Ziff-Davis Publishing. "We want to make it easier for our vendors to execute large-scale, dramatic marketing programs with one stop."
There are doubts the time has come for a round-the-clock channel devoted to technophiles.
"In the multichannel universe, it's very expensive to produce programming, and the ratings are just too small," says Steve Klein, media director at agency Kirchenbaum Bond &*Partners, New York. "How many homes does ZDTV reach? They're not really on the radar screen, and they're not an important part of any TV buy, except for a computer manufacturer."
Despite agency questions about the network's reach, ZDTV has the support of such major computer and Internet advertisers as Microsoft Corp., IBM Corp., Sun Microsystems and Gateway, as well as companies outside the category, including Charles Schwab & Co., Sprint Corp. and Barnes & Noble.
THE LONG HAUL
The channel is available in 8 million cable homes, which Mr. Jarboe calls "on target" with the company's immediate goals. Analysts say a channel must be carried to at least 30 million homes to even think about breaking even.
Ziff-Davis remains committed for the long haul, according to Mr. Jarboe. He points out that Ziff-Davis' first publication, Popular Aviation, was produced in 1927, "long before aviation was popular."
"As distribution increases and the computer channel takes its place alongside business news and sports and other mainstream cable TV channels, it won't be any more unusual to see people tuning into ZDTV than tuning into ESPN to watch the playoffs," he predicts.
"These are world-class marketers, and they're not doing ZDTV by accident," says Terri Holbrooke, president of ZD Brand & Market Services.
"They're buying it to invest in a community of affluent, technology-savvy consumers," she says.