October 2006 Archives
The Wall Street Journal and other organizations had stories yesterday about Time Warner's decision to emphasize certain magazine brands online to the detriment of the Time magazine brand. Web sites such as Money.com and Fortune.com will be "pushed" going forward.
Let me give you some personal history related to this change. In the mid-1990s I was known somewhat as an Internet visionary (back then, it was easier to be a visionary than it is today because there were so few people who knew much about the Internet). At the time I was CEO of Mecklermedia. We were public. We were one of the few public Internet companies. Therefore I was in "demand" as a speaker at public forums about the Internet and within the media industry.
One these speaking engagements ended up in my meeting strategists from the Time Warner magazine group. We had several meetings. I told them that their strategy with Pathfinder (the Time Warner attempt to create a powerful portal position) was a huge mistake and that they had a fabulous opportunity to be dominant in various vertical subject areas by using their magazine brands as magnets. I urged that they drop Pathfinder and build a great "money" site, a great "business" site as well as a great "sports" site, etc. using respectively Money, Fortune and Sports Illustrated.
Alas my suggestions were not followed. I think the people I met with liked my ideas but upper management shot down the strategy. Time Warner leaders had dreams of being competitive with AOL, Compuserve, Yahoo and others using the rather odd Pathfinder model. Interestingly two of the gentlemen I met with have big positions these days at Time Warner. I would bet they were instrumental in getting Time Warner to do something they should have done 10 years ago.
I am on my way to Barcelona to visit our new Cover office here. Earlier today I was in Madrid to meet with the Cover headquarters team.
Cover gives us a base in an important Western European country to further push the Jupiterimages brand and wholly owned content. Cover is over 20 years old and one of the grand distributor organizations in Spain.
We will now be a power in Spain, France, Germany and England with further expansion coming in due course. The other benefit is that Cover gives us the ability to translate all of our image keywords into Spanish which will help us in penetrating the Spanish speaking market.
In three short years Jpiterimages has become a power in the image industry. We have done this by adding traditional operating concepts but at the same time have blazed a trail in Web use and with a dominating strategy of owning content in a variety of areas that our competiitors have a huge void.
Jupiterimages is rising!
The longer I am in the public markets as a CEO the more I am amazed about the speculation and rumor that takes place when a public company makes an annoucement.
I have had over 20 phone calls today from various Mutual Fund managers trying to find out the "real" reason that Chris Baudouin, our CFO, resigned.
My earlier post today stated there was no "story" - Chris decided to make a career move and get away from the pressures of being the CFO of a public company on the move.
So let me add one thing which I only found out a few mintues ago: Chris is going into the financial planning business with a colleague who has been looking for an experienced partner. Chris' commute will be reduced from one hour to 10 minutes. He will no longer have to work 14 hour days, work on weekends and travel every few weeks to our various offices around the world. And finally he can spend more quality time with his three little boys -- sounds nice!
Now readers know what I know about the situation. Of course feel free to ask questions about this matter at our quarterly financial conference call in November.
We used to have a joke at Jupitermedia that you could have a job at the company if your name was Chris. For close to 10 years three of our top executives (Chris Cardell, Chris Baudouin and Chris Elwell) were named Chris.
No longer. Chris Elwell leaves the company on November 3 and now our CFO, Chris Baudouin leaves us December 31. Chris "B" as we call him decided that it was time to move on. There is nothing more to the change. However in these days of Enron and other scandals, I am sure Wall Street will quickly read intrigue into Chris' decision to leave Jupitermedia. There is no story or intrigue to report other than the fact that Chris decided to make a change in his life after 8 years of terrific service and dedication.
Chris B leaves us at a time when things are going well for our company. The new CFO will continue the work of financial intergration from our many acquisitions that Chris Baudouin has been tackling for many months and that we have discussed in quarterly financial conference calls with investors. Fortunately we will have a good transition period for change as Chris Baudouin will be with us for another few months. In addition, our President and Chief Operating Officer, Chris Cardell, was once my CFO back in the Mecklermedia days and is fully capable of running public company finances should the need arise.
We are glad that Chris Baudouin is with us for the remainder of the year and wish him well in his future endeavors.
A bonanza has landed at our frontdoor. We are always looking for talented individuals who have worked in the creative and tech space of the stock photo industry. Such individuals are difficult to find.
Recently, however, we have hit the motherlode. Our friends at Getty Images are terminating (as we hear it) 10% of their workforce worldwide. And thus the bonanza.
We have been inundated with resumes from a solid pool of Gettyites that have been or are fearful of being made redundant. This is particularly true in Germany where we are growing rapidly and have a need for skilled image professionals. We welcome anyone from Getty who is looking for a home from a growing image company. Come one and come all.
My recent posts on CNET and JupiterWeb have brought a flurry of questions about the future of both properties. The press too is interested in the CNET story.
Red Herring had an intersting story speculating about CNET's future.
It certainly would make sense for one of the larger media companies that wants Internet presence to consider buying CNET. Perhaps this is the property that Viacom should acquire?
Readers surely have noted that this blog now has advertising. Advertising is indicative of change taking place with our online media division known as JupiterWeb. No doubt ads on this blog will add revenue to Jupitermedia - certainly not a load of ad dollars but more than enough to pay for a few servers and laptops and perhaps more.
In a way ads that you see here are the beginning of change that will be more apparent across JupiterWeb in coming weeks and months. For example we are about to launch a new Web site and trade show by the same name. More information about these launches will be public in about three weeks. These additions will be followed by some acquisitions for JupiterWeb.
I have analyzed JupiterWeb after staying "away" from growing it for well over two years. The analysis showed me that JupiterWeb is still one of the largest business to business online communities in the world with nearly 15 million unique visitors reading it every month. With very little effort and a rather small investment we can make JupterWeb a more significant property in a very short time.
I do not see this renewed effort on JupiterWeb conflcting with our continued growth of our Jupiterimages division. And in fact my decision to start spending more time on JupiterWeb should be viewed as bullish for Jupiterimages in that I feel that we have turned a major corner in the integration and build out of Jupiterimages so that I can indeed afford to spend time on re-energizing JupiterWeb.
On a personal note the time I have spent on JupiterWeb and will spend in coming months is actually huge fun for me as I am back in difficult but familiar terrain - terrain that I have traversed for over 30 years.
BtoB communities are out of favor today compared to consumer online communities. We probably have seen the peak on consumer community valuations with the recent acquisition of YouTube. So perhaps our re-energizing JupiterWeb could be ahead of the next cycle?
Readers know that I have been involved in the IT and Enterprise publishing arena for many years. I have seen many ideas and many companies come and go. I have witnessed ups and downs with my own properties in this space.
It is particularly interesting to see what has happened to CNET. CNET has terrific properties. But I think it took a wrong turn about 5 years ago. It went from a tech source to a company that wanted to be a combination of Yahoo, Amazon.com and Circuit City.
CNET was "the place" to go for Tech information in 2000. CNET's News.com was the go to Web site for tech news and was often times quoted in traditional financial outlets such as The New York Times and The Wall Street Journal. CNET pulled off a coup when it shockingly was able to walk away with the URL Zdnet.com in a deal with Ziff Davis. Ziff Davis Media today has never recovered from losing the zdnet.com URL; in fact, this is one of the more shocking and goofy deals of all time in the short life of Web site transactions.
I am not privy to know what took place in the executive suite of CNET over the years, but at some point someone over there decided that being the center point for tech information and news was not glamorous enough. Fast forward to the present: CNET has lots of traffic dealing with consumer electronics, but gave up its pre-eminence in covering Tech. No doubt there is potentially more money being big in consumer electronics than in Tech, but consumer electronics is a commodity business and Tech is solid meat and potatoes.
Adding insult to injury was the news last week that Shelby Bonnie, CEO of CNET, had to resign over stock option backdating problems.
Writing posts such as this in which I offer criticisms leaves me open to greater criticism down the road if my company does not perform to expectations. I am prepared for all eventualities, but believe that our focus will see us through any potential rough spots.
I have been in the publishing or media business since 1969. I started out in scholarly reprinting in 1969 and began my own business in 1971 with a journal that reviewed scholarly collections of microfiche and microfilm.
Perhaps 2500 different people have worked for me during this period of time. I have been fortunate that several individuals stayed with me for many years. One such person was Tony Abbott. Tony was my editor in chief at Meckler Publishing from 1980 to 1994. Tony is now one of the foremost childrens' book authors in the United States.
Recently one of the stalwarts from both Mecklermedia and Jupitermedia decided it was time to leave working with me and to start his own business. Chris Elwell will be leaving November 3.
Chris was hired in late 1996 to become General Manager of our fledgling Web site operations (then called Iworld.com). Chris had been in the print newsletter business when I hired him. I calculated that a newsletter publisher would comprehend my theories about the Internet being a vertical library of infinite topics. And I was right. Chris took to the task and is the man behind what JupiterWeb is today (a network of nearly 150 Web sites covering the Enterprise and IT with about 15 million unique visitors per month).
We wish Chris well. Thanks for a job well done.
Reading about the Google - YouTube deal today made me reflect yet again on the 1999-2000 Internet period.
This latest deal very much reminds me of Yahoo buying Broadcast.com back then. This was the beginning of Yahoo attempting to be more of a media company than an Internet search company.
Therefore one can see Google repeating a bit of what Yahoo did by buying a property that makes them somewhat of a media company for the first time in their brief history. A big difference, of course, is that when Yahoo bought Broadcast.com keyword ads were yet to be born. And now Google can presumably monetize YouTube with keyword buys alone (although I would presume that the combined Google-YouTube braintrust has greater ambitions than just selling keywords).
Broadcast.com ended up being basically worthless to Yahoo. Mark Cuban sold just at the correct time and cashed in his stock to become a billionaire. It will be interesting to see what happens to YouTube as part of Google - will YouTube be a cornerstone to the growth of Google or will it be another Broadcast.com? One thing for sure, the YouTube founders will certainly be very wealthy. I wonder if they will buy a pro basketball team?
Red Herring was a high flying magazine of the 1990s. I remember when it was offered to me to buy in July of 1999 for some $30 million. After the Internet crash of 2000-2001 it disappeared. If I am not mistaken in 2003 it was resurrected as a magazine and a Web site. I not sure the magazine remains?
With my historical background, I find it more than ironic that Red Herring (a player in the Internet craze of 1999) would be the one publication that decided to comment on the valuation of the Shutterfly IPO.
The Wall Street Journal had an article on Tuesday (31 October) entitled "Despite Crackdown, Online Gamblers Aren't Ready to Fold" by Christina Binkley and Jessica E. Vascellaro. To summarize, despite the latest legislative attempts by the federal government, it is most certain that online gambling will continue to thrive no matter what the federal government does.
It is fun to watch politicians trying to get on the "right" side of the issue. For example take Senator Bill Frist (Rep. of Tennessee). He wants to run for president in 2008. He has decided that he will appeal more to the right wing of his party by being the leader in the Senate that is opposed to online gambling. If one knows football, and one knows Tennesseans, one knows for sure that the Senator is probably a big fan of the Vols - the University of Tennessee football team. Or perhaps he is a big fan of the Commodores - the Vanderbilt Univeristy football team. And perhaps he is a big fan of the professional football team the Tennessee Titans? Odds are (no pun intended) that the good Senator has made many wagers over the years on point spreads on one of these three teams or at least bet with friends on the outcome of games. Of course we will never find out because the pious Senator Bill wants to appeal to a set of voters that he perceives to be anti-online gambling.
And beyond Senator Frist, I would wager that 80 percent of the 100 United States Senate has wagered and does wager on football games including the Super Bowl.
My point is that gambling is no different than alcohol. Most Senators drink and most Senators bet. The USA tried to prohibit alcohol in the 1920s and 30s and failed miserably. The same is about to happen with online gambling.
Shutterfly went public last week at $15.00 per share. Shutterfly describes itself in the prospectus in the following: "We are an Internet-based social expression and personal publishing service that enables consumers to share, print and preserve their memories...Our vision is to make the world a better place by helping people share life's joy."
The company is moving in on $80 million a year of revenue and makes no money. The business is fiercely competitive. And today, after an IPO, the company has a market cap of over $300 million.
This IPO reminds me of IPOs of the 1999-2000 era. In those days companies went public on ideas with no revenue. Shutterfly has revenue but I would doubt that it can ever be profitable. I can understand why the prospectus uses the "joy" word after studying the financials and the business model.
As a CEO of a public company I realize that this post might draw criticism. I am used to criticism and realize that if my own company's financial results do not satisfy The Street then I will be condemned and reminded of this post. However we do make money - lots of it. And our market cap is now significantly lower than the market cap of Shutterfly (Nasdaq:SFLY).
I am constantly amazed by the process of being a public company. I spend hours with analysts and fund managers. They rip apart and parse my every phrase and thought about our business model. And that is why for the life of me I cannot understand how any fund manager would have purchased shares in Shutterfly at the level the company sold itself to the market.
Congratulations to the banks that brought this deal to the market and of course to the founders (many of whom sold shares on the offering). I wish you luck with your business and no ill-will. I am just a mere Internet industry commentator who has observed it all in the Internet space since 1994. We shall see where this all winds up over the next 12 months.
Now back to making sure Jupitermedia remains a significantly profitable corporation.
I have tended to write about our Jupiterimages division. Therefore many readers might not realize that Jupitermedia owns the largest BtoB Web site network devoted to Enterprise IT and Tech.
Our Internetnews.com team of reporters covers the tech world as well as any journalism operation but gets little credit in the trade press. We have bureaus in Silicon Valley, Washington, DC, Boston and New York City as well as in Darien, Connecticut.
And now this team is behind our launch of Internetnews.com Podcasts. Every Friday we will have a "week in preview" podcast along with on-demand access to our fast growing podcast library.
Our podcast launch is just one of many new services that will be launched by our JupiterWeb division this fall and into 2007. Frankly Jupitermedia has not invested enough time and effort recently in our online media operations but this is now changing. We will even be launching some new trade shows in the spring and each show will have a new companion Web site. My roots are firmly affixed to online media and it is invigorating for me to get back into the online media "saddle." I look forward to announcing online media initiatives in forthcoming posts.
Jupiterimages is fortunate to own the best known stock photo subscription site - Photos.com. Photos.com was started in late 2002. Today it offers over 310,000 professionally shot photos. New images are added every month. While we do not add images at the same pace of micropayment sites, such as our Stockxpert.com which increases by about 15,000 images per week, Photos.com is adding nearly 2,000 new images each month.
Today we added several new embellishments to Photos.com. Previously a buyer could order a super-resolution (25-30 MB) pay-per download (PPD) image or order a subscription. Now we have added yet another PPD offering: ultra resolution (50 MB). By offering two pay-per- download high-resolution offerings, Photos.com becomes an even better shopping market for image buyers. Other new features include a mini lightbox so a user can drag-and-drop an image from the search result page and from the image detail page as well as a click and "add to the lightbox" link.
We have also added a rollover pop-up preview feature and a new "thumbnail size" feature so users can have small, medium and large samples of the images.
Photos.com constantly evolves. This is required in order for Photos.com to remain one of the most significant image subscription offerings worldwide.
And while on the topic of subscriptions, our new ComstockComplete subscription plan is appealing to the image buying market as well as our Rolls Royce-like subscription plan - JupiterimagesUnlimted. Jupiterimages is the world leader in multi-tiered subscription offerings. Our ability to offer these approaches stems from our leadership position in owning more high quality royalty free digitized images than our competitors combined. And we aim to maintain this position and offer even more creative image packages in coming months.
I was reading the Forbes 400 list of richest Americans and realized that I had had encounters with several of these people over the years. Of course my meetings were Internet or tech trade publishing related. I was particularly interested in the paths taken by Sheldon Adelson and Patrick McGovern. Both made big money on covering tech through trade shows (Adelson) and tech magazines (McGovern).
Sheldon Adelson at number 3 on the list is quite amazing. Sheldon made his first big money by building and selling Comdex trade shows. While building Comdex Sheldon picked up the Sands Hotel in Las Vegas (where Comdex took place for many years). When Comdex was sold, Sheldon kept the hotel property. He tore it down and built the Venetian hotel. He now has gambling properties in Las Vegas and Macau and that is how one gets to be worth $20 billion.
Sheldon was super smart to sell Comdex at the high and then to move into gambling. Contrast this to Patrick McGovern of IDG (according to Forbes worth a mere $3 billion). McGovern created his trade tech publishing company in the 1970s and rode the microcomputing wave to great wealth.
Pat did not move into any other business as did Sheldon and has remained with trade tech publishing and trade shows and research. I presume Forbes figures that Pat liquified his IDG holdings over the years in order to arrive at his being worth $3 billion. I find it hard to believe that IDG (which Pat still owns) could possibly be worth but a tiny fraction of $3 billion. It would be interesting to see how Forbes magazine arrived at its calculation.