I talked with Gordon Hughes, pres/CEO of ABM, yesterday about his trip to China to be a part of the 36th annual FIPP (International Federation of the Periodical Press) World Magazine Conference.  Hughes says that B2B is gaining worldwide recognition and respect, but we’ll discuss that in this week’s issue of min’s b2b.

More interesting was the difference of business climate.

“China, to me, as it prepares for the summer Olympic games, especially in Beijing, is going through a real transformation,” says Hughes.  “The biggest thing to me is that the head of the GAPP [the government office that controls the media] said that they were indeed going to loosen up the magazine business so that more business can be done.  This is just more than window dressing.  They’re making money, people are doing better, and it’s a very exciting time in China.“

See more in this week’s issue of min’s b2b (goto minonline.com).

ARF, AAAA, ANA, OPA, and MPA–all interested parties in the ongoing IAB/comScore/Nielsen//NetRatings drama surrounding third party auditing/accrediting…except ABM.

I know that Gordon Hughes, president and CEO of ABM, was in China on an ABM project during the meetings, which occurred last week at IAB’s offices. But, with the leading position that B2B publishers have taken in the move to and monetization of the Web, I think ABM should have been, in some way, represented here.

I also find it curious that comScore and Nielsen//NetRatings are the focal points of IAB’s efforts when there are many other companies out there that are doing the same thing. According to IAB, these two are the biggest, but, again, take a look at our exclusive min’s b2b digital boxscores–there are lots of other big guys playing here. As Sheryl Draizen, SVP at IAB, told me yesterday, IAB wants to get comScore and Nielsen on board and then will tackle the rest of the industry.

All this being said, Kudos to IAB for moving strongly on this issue.

On December 31, 2006, Ziff Davis had $15.4 million in cash/cash equivalents.  After borrowing $20 million on February 15, the company has $22.2 million in cash/cash equivalents as of March 31, the close of the first quarter.

I’m not a financial guy, but I can do basic math.  If you add the $20 million they borrowed with the $15.4 million they had at year end 2006, they should have at least $35.4 million at the end of Q1…that is, if they didn’t need to burn through any cash to continue to run the business.  We’re looking at a gap here of $13.2 million.  

If current trends continue–a hypothetical if there ever was one, let’s say for safety’s sake–and Ziff Davis doesn’t borrow any more money, they should run out of cash some time in the middle of Q3.

When you run out of cash, you’re out of business.

The facts: Source Interlink has agreed to buy Primedia’s enthusiast division for almost $1.2 billion; KKR has a 60% stake in the business. Industry sources speculated that the 70-odd magazines and ancillary properties would (should?) go for around $800-900 million. The reported asking price was “around $1 billion”. And one source speculated that they heard that the next highest bidder was close to $800 million.

So what gives with this hefty price tag? Why would Source outbid the next highest bidder by a mile?

The dish: Many insiders have privately conveyed to me that they think the company has been overvalued and that Source Interlink is going to have to work very hard to make up the $300-400 million through taking costs out of distribution and fulfillment (their core competency) and by boosting newsstand sales through their powerful market position. Only time will tell if they can do this…to the tune of several hundred million. Remember, they’re not trying to break even on this deal.

On the other hand, some insiders welcomed Ron Burkle (ultimate new owner of PMG) putting this amount of money into the industry–they’ve taken it as a sign of health.

Tad Smith, CEO of Reed, and an admittedly interested acquisitor, has remarked that “it’s very expensive out there. There’s a lot of money chasing some very high quality deals.” He added that, “we’re going to be very, very careful.”

It rhymes.  Harry McCracken is back in as editor-in-chief at PC World.  And Colin Crawford is, as of Wednesday, no longer CEO of PC World.  He is now executive vice president, online.

If anyone had any doubts as to whether the editors or publishers were in charge of PC World, this development should clear things up.  McCracken clearly won this battle, and, presumably, Bob Carrigan, CEO of IDG, and Pat McGovern, chairman and founder, are behind him.

This move should go a long way in restoring the damaged credibility of the publication.  Readers can rest assured that PC World isn’t a shill for advertisers, and advertisers can run programs with PC World with the knowledge the magazine has editors that readers can trust.  The value proposition should soon be restored.

Personally, I think Crawford acted with some grace in this situation.  Clearly, he had to go.  And he did so without much fanfare.  Over at IDG, Carrigan et al love what Crawford has to bring to the table and I’m sure are happy to have him back.  As for Crawford: “I’m really, really excited to be back on the IDG executive team, and excited to be focusing on the growth of IDG’s online activities again.”

Who would have thought this would end so well?  Aside from Crawford getting a nasty scratch (and learning some lessons in the process, I imagine), all seems to be well, or on its way.  The search for PC World’s next CEO begins today.

According to the ABM Spring Meeting program, 39 of the registered speakers are men, and 10 are women.  Minorities also seemed to be barely represented.

“I’ve been coming here for a number of years and I’d like to see more women and more diversity in the speaker program,” says Alix Raine, spokesperson for CMP Technology. 

In fairness to ABM, compared to the average attendee, the speaker program was fairly diverse.  Also, as a content provider, ABM wants to present the best speakers possible, regardless of their sex or any other non-business related characteristic. 

Nevertheless, as a leading community organization, I think that it is important for ABM to show those that are in the minority in the audience that people from their specific peer groups are industry leaders, too, as they undoubtedly are.

Great spring meeting, ABM.  Just something to think about for next year.

I caught up with Bob Carrigan (CEO of IDG) at the ABM spring meeting in

Well, kudos to PC World for finally publishing this story. It’s just too bad that Harry McCracken, an asset to IDG at the very least, had to leave over it.

Maybe he’ll come back?

Carrigan doesn’t know and prudently won’t comment. But, as of now, he’s still resigned.

One Question

The piece on PC World (see it here) has two pieces: “10 Things I Hate about Apple” and “10 Things I Love about Apple.” Was that second story part of the original editorial package? Was it part of some sort of compromise? I hadn’t heard anything about it during the initial dustup. Anyone who has the answers to this, feel free to comment, or, if you’d like to remain anonymous, email me: jgreenfield@accessintel.com.

Update

Just heard from McCracken.  Apparently both stories were prepared at the same time, but when the “Hate” story was axed, it didn’t make sense to publish the “Love” story.

Steve Cohn, editor-in-chief of min tells a story about David Carey, current publisher of Conde Nast Portfolio and ex-publisher of The New Yorker. Apparently, though Carey had an inkling of what topics might be discussed in any given issue, he did not see the final articles before Sunday, when it was way too late to make changes to the issue. No messing with the church/state wall.

If you’ve been paying attention, you already know that Harry McCracken now-ex-EIC at PC World has resigned over an argument with CEO Colin Crawford regarding an article reportedly entitled “10 Things I hate About Apple.” Supposedly, Crawford wanted changes made and McCracken would not compromise and then resigned. Media reports and Crawford tell different stories on what exactly happened and what the details of the situation are.

Regardless, McCracken is no longer EIC of PC World, a brand he worked for for 12 years, and the reason has something to do with Crawford meddling with an article–both sides have admitted these facts.

So, who was in charge at PC World editorially? McCracken’s resignation tells us that it was no longer him at that point, and this is very dangerous. Crawford is a smart publishing executive and lets readers know through his blog (also the official statement on the matter from PC World at this point) that “There is no shift in editorial policy at PC World, editorial integrity remains a core value and this will not change.” But how can we think this is true? We don’t know for sure exactly what the disagreement was about, but we do know that Crawford read an article for a future issue, had a problem with it, and attempted to have it changed. That shows a lack of editorial independence, if not integrity.

Kudos to McCracken for making a stand. As an editor, it’s easy for me to applaud when editors do something for themselves; but this is not simply a case of that. McCracken, through his attempt to maintain control of the publication, was also attempting to maintain the reputation, and ultimately, the value proposition of the publication.

This is a sad week for PC World: they lose both a veteran leader on the editorial side and some integrity, too.

The Apple Twist
Has anyone considered the way this might damage Apple? An article in PC World called “10 Things I hate About Apple” might have had some minor effects, maybe have garnered some publicity. But this little incident has brought Apple a lot more negative attention–and with only the title of the article! If, in fact, Crawford was acting out of deference to an advertiser (which is not necessarily the case), he may have inadvertently done more harm than good.

I read an article in the May 2007 issue of Harper’s Magazine about a couple who are both intimately involved with digital content. Rick “moonlights—in his day job—as board president of the Internet Archive, a Web clearinghouse for free, public-domain information,” while Megan “is on the editorial board of a magazine called Bad Subjects, which provides fifteen years of back content for free online.”

The article isn’t about how they are a Net-savvy couple who take advantage of all this digital life has to offer. It’s about their hobby, a personal library of over 50,000 items (books, pamphlets, “ephemera”) that they have organized by how the subjects relate to each other in their own minds. To them, and to me, the beauty and usefulness of this library is a great example of why print is absolutely necessary to the industries it serves in B2B media.

When readers search the Internet, they go to Google, or a specific Web site that they are already aware of to find what they need. The notion of “surfing” the Net is outdated: exploration rarely happens online anymore, especially for business.

This is one of the things magazines are good for. You trust the editors at a publication to aggregate a host of related information for you, and then you open up that aggregation and flip through it, looking to find whatever it is you might find. (And then, when you get there, taking a good, long look…but that’s another issue.)

Being able to find the solutions to business problems quickly and real-time, actionable information has done wonders for our productivity—the Internet is one of the greatest business tools ever invented. But that doesn’t mean that exploration and deep-diving aren’t as absolutely essential as they used to be—and that’s print’s job.