Ziff-Davis’s magazine unit could be cast adrift if Rupert Murdoch’s
News Corporation snaps up the internet element of the computer
Murdoch is said to be considering buying the business in a bid to boost
News Corp’s online capabilities. However, it is not known whether he
will buy the entire dollars 1.5 billion US-based company.
Insiders said Murdoch’s youngest son, James, who is thought to be
negotiating the deal, is principally interested in internet firm, ZDNet.
Murdoch senior recently reversed his earlier opinion that online
companies were overvalued.
Ziff-Davis’s other assets in the US include PC Week and the computer
exhibition, Comdex. In the UK, Ziff-Davis publishes PC Magazine, PC
Direct, PC Gaming World and IT Week.
Most commentators believe Murdoch will steer clear of the company’s
traditional media interests, which are considered lacklustre both here
and in the US. But the internet arm is a different story. Phil Hodgkiss,
an account director working on IBM at MindShare, said: ’ZDNet has the
potential to be enormously profitable.’
Media buyers are unenthusiastic about Ziff-Davis’s UK magazines. ’Most
are direct replicas of US titles,’ one said. ’This is an American
operation which has failed to adapt to other markets. For instance, it
is a ratecard company and absolutely refuses to negotiate.’
The exception is IT Week, launched in May 1998, which is considered a
success in a market historically dominated by VNU’s Computing and Reed’s
’Its secret is almost certainly that it’s a UK-specific title,’ the
buyer said. ’I can imagine a few people getting excited if it came up
Otherwise, I can see a competitor buying Ziff-Davis in order to close it
down, which is more or less what has happened in the case of CMP and
If it goes through, the News Corp deal will strengthen the relationship
between Murdoch and the Japanese web investment group, Softbank, which
owns 70 per cent of Ziff-Davis. Softbank effectively put Ziff-Davis up
for sale in July, when it said it intended to concentrate on ’pure’ web
News Corp and Softbank have a joint business called e-ventures, set up
to invest in internet start-ups.
Ziff-Davis made a loss of dollars 77.8 million on sales of dollars 1.8
billion. In May, it hired the investment bank, Morgan Stanley Dean
Witter, to look at ways of improving its value.