Tuesday, October 28, 1997

10/28/97: Primedia, Dow Jones, Amazon.com,

Washington Post Co. 3q Profit Up 29%
K-Iii Communications Creates A New Division, The Supplemental Education Group
Dow Jones Rumored To Be Mulling Sale Of Markets Unit
Saddle Up Silver….Polo Magazine Re-launch For Stylish Ride
Gruner & Jahr Reported Looking At Reed IPC Magazines
Amazon.Com And Barnes & Noble Drop Suits
Knight-Ridder, NY Times Unveil New Online Initiative
Busy Week For Ziff-Davis Publishing


The Washington Post Co. reported net income of $71.6 million or $6.64 per share for the third quarter, up 29% from net income of $55.4 million or $5 per share in the year-ago period. Quarterly revenue totaled $478.4 million, up 4% from revenue of $460.3 million in the year-ago period. The company cited strength from its print businesses, partially offset by increased spending at the company's other business. The results include a one-time after-tax gain of $16 million relating to the sale of its PASS Sports subsidiary and termination of its regional sports network. Third-quarter newspaper division revenue rose 4%; broadcast division revenue rose 1%; and the cable division, which serves 635,000 households, had revenue increased 13%.

The Post Co.'s stock closed Tuesday at $457.75 per share, down $1.5625.

Cowles/Simba Media Daily 10/21/97
Copyright 1997 Cowles Business Media. All rights reserved.

K-III Communications, publisher of several trade and consumer magazines and educational properties, such as the World Almanac and Westcott Communications' 22 educational TV networks, has announced the creation of a new division, the Supplemental Education Group. The new group will comprise national elementary school publication The Weekly Reader, Funk & Wagnall's Encyclopedia, the World Almanac and educational video company Films for the Humanities & Sciences. Weekly Reader president and CEO Richard LeBrasseur will be the group's president.

Cowles/Simba Media Daily 10/21/97
Copyright 1997 Cowles Business Media. All rights reserved.

Dow Jones & Co. said it was placing its revamp of its Dow Jones Markets financial information service under review, suggesting to some analysts that it might be planning to sell off the struggling unit. Dow Jones spokesman Richard Tofel would only say that the board of directors was "reviewing" Dow Jones Markets' previously announced $650 million overhaul and considering "various alternatives" for the unit, which was formerly known as Dow Jones Telerate. Tofel noted that review is part of the company's overall budget planning for the coming year.

Dow Jones Markets currently provides electronic financial data to corporate customers, but has faced increasing competition from online services, brokerage houses and other suppliers of financial information. The review comes on the heels of Dow Jones taking a 34% third-quarter earnings hit, in part due to Dow Jones Markets suffering an 83% loss in operating income.

Analysts conjecture that rivals Reuters PLC and Bloomberg LP may be in line to bid on the unit. Thus far, Dow Jones has only denied rumors that the unit is for sale. A joint venture with NBC was floated as another possibility for Dow Jones Markets.

Cowles/Simba Media Daily 10/20/97
Copyright 1997 Cowles Business Media. All rights reserved.

POLO magazine, which for 23 years has continuously chronicled the game and lifestyle of polo, goes into mass circulation this week expanded into a bold and colorful journal of adventure, elegance and sport. The glossy magazine's re-launched October / November issue of 550,000 copies is one of the largest in publishing history and exceeds House & Garden's vaunted re-launch last year. POLO magazine will send copies of the magazine and a special subscription offer to 1 million Neiman Marcus card holders over the next year.

Beginning early next year, POLO magazine will be sold at $6 an issue at newsstands at selected airports, bookstores, grocery stores and high-end retailers. The magazine will also expand on its international readership in such markets as London, Paris and Buenos Aires. POLO magazine, which derives its name from what is called "the sport of kings," also will distribute the magazine to royalty throughout the world including kings, queens, princes, princesses and sultans. In fact, the magazine plans an upcoming feature on the Sultan of Brunei, who reportedly keeps his polo field lighted throughout the night and a stable of players and ponies at the ready 24 hours a day for whenever he has the urge to play.

SOURCE Westchester Media Company

LONDON (AP-Dow Jones)-- Gruner & Jahr , a 75% owned publishing subsidiary of Germany's Bertelsmann AG (G.BRT), has held 'informal' talks with Reed Elsevier (u.ree n.els) about buying IPC Magazines, the Anglo-Dutch publisher's U.K. consumer magazine business officially put up for sale Monday. Executives familiar with the situation confirmed late Monday that the Bertelsmann unit had approached Reed Elsevier about buying IPC, which publishes some 70 titles ranging from Woman to Marie Claire to Loaded.

A person familiar with the situation said G&J 'were interested and indeed have informally contacted' Reed Elsevier about buying IPC. However, stiff competition for the unit could come from EMAP PLC, a U.K. magazine publisher with significant French publishing interests. A management buyout of the titles is a further possibility, onlookers said. The publishing executive said Reed Elsevier had chosen to sell IPC now because 'the business is at a peak' with advertising revenue at cyclical highs and paper prices at cyclical lows. The executive also noted that IPC had undergone drastic cost cutting, while receiving little in the way of new investment.

'I cannot imagine someone buying the whole thing,' the executive said, while acknowledging that Reed Elsevier will push hard to sell the unit in one piece. The source also said that IPC could fetch $1.2-1.5MM, should several interested bidders emerge. In the year ending December 1996, IPC (excluding New Scientist) reported sales of 314 million GBP and profit of 63 million GBP

Onlookers note that G&J, which publishes women's market titles such as Prima and Best, is a natural fit with IPC, whose titles include Woman, Woman's Own and Marie Claire. 'It's a perfect match with IPC,' said one onlooker.

A spokesman for SBC Warburg Dillon Reed, which is advising Reed Elsevier on the sale, refused comment on whether talks with G&J had begun. Other buyers for IPC could include U.S. publishers Time Warner and Hearst Corp. as well as French publishers Matra Hachette and Havas.



According to the joint press release, online booksellers Amazon.com and BarnesandNoble.com agreed Tuesday to drop their respective lawsuits. The plaintiffs recognized "they would rather compete in the marketplace than in the courtroom." In a related note B&N reported web sales could top $100MM in 1998 which is the close to the expected level for Amazon.com.

Knight-Ridder New Media made the newspaper industry's debut entry into the online city guide network field on Monday with Real Cities (http://www.realcities.com). The rollout includes 32 Web sites of local Knight-Ridder newspapers across the U.S., networked under the umbrella brand Real Cities; all sites had already existed independently. However, Real Cities has added proprietary services such as CarHunter, HomeHunter and entertainment search engine JustGo; these and others will apply to all Real Cities member sites as Knight-Ridder continues to build out the network.

Real Cities is going up against established online brands Digital City from America Online and Sidewalk from Microsoft, as well as numerous individual city guides and the emergence of localized directory and search sites such as Yahoo. But the company hopes to distinguish itself through the home-grown content of its local publications and its reputable journalism. "On other online guides, there is a lack of quality in community reporting," said Real Cities national marketing director Amy Rabinovitz.

Meanwhile, The New York Times announced that it is launching New York Today (http://www.nytoday.com) in January, which is intended to be the definitive guide to New York culture, news and services. It's unclear how the newspaper company plans to outdo the many local guides for New York City, which include – in addition to national brands Sidewalk, Digital City, CitySearch and Yahoo – local properties such as the Village Voice http://www.villagevoice.com), Total New York (http://www.totalny.com) and recently launched New York magazine (http://www.newyorkmag.com).

Cowles/Simba Media Daily 10/21/97
Copyright 1997 Cowles Business Media. All rights reserved.

While its parent company Softbank Corp. is floundering financially as a result of making acquisitions it can't afford, Ziff-Davis Publishing Co. -- purchased by Tokyo-based Softbank in 1994 -- owns several leading products in the computer publishing industry. In an effort to create community-focused services, ZDNet joined with personalization technology developer Firefly for the launch of My Hot Files (http://hotfiles.firefly.com).

Firefly, which also provides the underlying technology for Yahoo's My Yahoo service (http://www.my.yahoo.com), has enabled users in search of shareware to tailor ZDNet's shareware site Hot Files to their needs. Now those customers can receive alerts and recommendations based on their registered profiles (which are dynamically compared to other users) and their shareware preferences through Firefly's collaborative filtering.

Cowles/Simba Media Daily 10/20/97
Copyright 1997 Cowles Business Media. All rights reserved.

Soundscan reports sales (POS system) for 85% of all music stores (and growing) and the company is expanding into book store sales reporting. Soundscan has been criticised in the Music business for being too expensive to subscribe to however the system is being credited with reducing music store returns from 23% to 13% (1990-93). Each point is worth $15MM. A system called BookTrack has been operational in the UK for the past year and currently 40% of all book publishers use the system.

COSTCO, a warehouse club, has moved to vendor managed inventory for it’s book departments. Over 40% of book sales at warehouse clubs are Harcover fiction titles.

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