(via Drudge) Rumors abound that Ziff-Davis will declare bankruptcy by the end of the week.
The company recently closed Yahoo Internet Life, a 1.1 million circulation magazine that lost $30 million in its seven years of existence, according to the trade magazine Mediaweek. Ad pages dropped 50 percent in each of the last two years.My belief, wholly without any objective evidence, is that the Web has killed the market for computer technology magazines and probably other genres as well. On the other hand, the Web doesn't beat a real paper and ink magazine for accompaniment on a "porcelain cruise".
Six of the company's 15 magazines have been shut in the last six months, including Family PC, Expedia Travels, Interactive Week and eShopper The company reduced Smart Business to a newsletter and laid off most of its staff. The company still publishes PC Magazine, which has a circulation of 1.23 million, three controlled circulation magazines in the technology sector, and five game magazines, including the recently introduced Xbox Nation.
Willis Stein & Partners paid $780 million for the company during the bull market in technology in a deal that closed in April 2000. The company's earnings before interest, taxes, depreciation and amortization are projected to be $6.5 million in 2002, according to security filings, and then are expected to rise to $34.4 million in 2003 if the restructuring goes as planned.
Savings will be gained from the closing of money-losing magazines and the layoff of 700 of the company's 1,150 employees the last year. With its remaining employees, Ziff Davis is trying to diversify out of the technology sector by starting additional computer-game magazines and by tapping into the youth enthusiast markets, like skateboarding magazines, although no specific magazines are in the works.
