Folio magazine's May cover story, "Ziff's Last Stand," about the troubled
auction of Ziff Davis Media Inc., is worth a read because it offers an
in-depth look at how the once great magazine empire has failed to transition
to the Internet era. The article lays out in no uncertain terms that the
relevance of magazines is on the decline and uses
Ziff
Davis' issues as the poster child of the future for much of the industry.
However, it is also clear that Ziff faced an uphill battle following
Softbank's
$780
million sale of the company to Willis Stein & Partners in 2000.
Softbank unwound the magazine business from the Internet business, which
Cnet
Networks Inc. bought separately for $1.6 billion. Softbank's move,
combined with the gobs of debt Willis Stein poured on as part of the buyout,
left Ziff at a disadvantage in a period where its rivals, International Data
Group and CMP Media LLC, were transitioning to the Web. The debt load left
Ziff with little money to build Internet properties, as illustrated in the
Folio article. Consequently, Folio concludes that Willis Stein will be lucky
if it breaks even on the dissolution of the company — the same conclusion that
The Deal's Richard Morgan came to in a
Backstory
column from October 2006. —Matthew Wurtzel
See
story from Folio
See Backstory column about the auction from The Deal
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