Hollywood Online purchase bolsters TimesLink, but exec exits show problems persist
Is Times Mirror Co. making a renewed push toward new media? Don't bet on it, despite a flurry of interactive activity last week.
The Los Angeles-based publisher, rocked by layoffs and losses last year, is acquiring Hollywood Online, a Santa Monica, Calif.-based company that designs movie promotions for the World Wide Web and online services. Hollywood Online becomes a subsidiary of Times Mirror and will operate as a separate company.
On the other coast, Times Mirror's New York-based magazine division is in final negotiations for a multititle online content deal--believed to be with America Online.
Although the moves may keep the Times Mirror ship afloat vis-a-vis new media, there's no sign yet of smooth sailing for the company as a whole.
Since his arrival last June, CEO Mark Willes has overseen dramatic cost-cutting that shut down decades-old newspapers New York Newsday and Baltimore's Evening Sun and eliminated 2,200 jobs, mostly in the newspaper division. In new media, the company shuttered its Times Mirror Multimedia unit.
Some analysts, including John Kelsey, president of the Princeton, N.J.-based Kelsey Group, see the Hollywood Online acquisition as a smart business move that could help the company establish a profitable new media model for its newspapers, especially The Los Angeles Times. The Times pulled its TimesLink service off Prodigy last fall and will relaunch it in March on the Web.
Others suspect Mr. Willes is no more bullish on new media than he was when he arrived. In fact, some think the company remains ripe to go into play.
Porter Bibb, managing director at Ladenburg Thalmann & Co., New York, said of the Hollywood Online deal: "It's a paper tiger. I still think the company is stripping the deck for a sale. When you start to see them hiring people in their core businesses in magazines and newspapers, then they'll convince me they are not for sale."
NOT FOR SALE
The company has steadfastly insisted it isn't for sale, and at last December's PaineWebber media conference in New York it told Wall Street analysts it was seeking earnings growth of 50% in 1996 after last year's downsizings.
The reductions have been good news on Wall Street, where the stock has recently been trading around $32 a share--about $3 below its high of $35.25.
Prior to Mr. Willes' arrival, the stock had skidded to $17.25 a share. Much of the drop was attributed to the company's announced plans to aggressively pursue new media.
INTERACTIVE PICTURE FUZZY
But a clear picture of the company's interactive strategy is only beginning to emerge.
The Times plans to incorporate content from Hollywood Online into TimesLink, said Harry Chandler, the newspaper's director of new media.
"We'll come up with bundles for advertising between Hollywood Online and our online news brands," said Bob Brisco, VP-advertising, marketing and planning at the Times. Rates are under discussion.
Also possible: content deals with non-Times Mirror newspaper brands online, which could become a good revenue source.
Despite the new launches and acquisitions, two senior-level executives associated with the company's new-media strategies have left the company.
George Bell, a senior VP and president of the Skiing Group, is joining Architext, a Web browsing software company in Mountain View, Calif., as its new CEO. Mr. Bell helped launch the magazine group's new-media ventures, although Jack Horstmeyer, VP-multimedia and director-new business development, has handled day-to-day management for more than a year.
Brian Sellstrom, president of Times Mirror's Transworld Snowboarding, replaces Mr. Bell.
At TimesLink, Editor in Chief Dan Fisher resigned this month, just months before the Web launch to join Microsoft Corp. Times Deputy Editor Terry Schwadron assumes his duties until a replacement is named.
Copyright January 1996 Crain Communications Inc.