BREAKING NEWS & VIEWS

A Divestment of 'Cyclicality'
Monday, February 25, 2008

Industry Insiders Tight-Lipped as RBI Goes on the Block

International media conglomerate Reed Elsevier's planned divestment and ultimate sale of Reed Business Information (except for its exhibition business), a major B2B publisher whose titles include Variety, Broadcasting & Cable and Publishers Weekly, is generating buzz but little commentary from key players as to what this portends for RBI and for the viability of the ad-based B2B industry.

The divestment represents a move away from B2B's ad highs and lows. About RBI, Reed Elsevier CEO Sir Crispin Davis said in a company statement that "its advertising revenue model and the inherent cyclicality fit less well" with Reed Elsevier's subscription-based information strategy.

To industry observers, these developments might not come as a shock. Last weekend, England's Telegraph newspaper reported that Reed Elsevier, which employs 32,000 people in over 200 locations, was planning to eliminate 1,000 jobs. According to the statement released by Reed Elsevier to announce its planned divestment of RBI, which is being handled by the London-based office of UBS, the company's maneuver is designed to cut costs and "restructure" its portfolio following an analysis of its 2007 financial performance. (Reed Elsevier's recent sale of Harcourt Education also falls into this category.) Reed Elsevier is viewing these multiple moves as a way to "accelerate growth."

So far RBI CEO Tad Smith and company VP of corporate communications and public relations Salina Le Bris have declined to comment on the immediate future of RBI (formerly Cahners Publishing Co. prior to its 1977 purchase by English publishing firm Reed International). RBI publishes more than 80 B2B magazines, and manages more than 55 Web sites (go to our Digital Media chart on pages 6-7 for data on some of them).

RBI generated $1.9 billion in revenue in 2007, just a few hundred thousand dollars shy of analyst expectations.

This latest turn of events is interesting in light of a Q&A with Smith in min's b2b's Oct. 8, 2007, issue. When asked how RBI's business sector was doing, Smith was optimistic but cautious, as he compared the company's growth to a year before: "The portfolio overall looks reasonably good. Design is doing fine. Textiles are making a decent comeback after a tough period when the trade tariffs fell. Manufacturing is solid. Electronics is doing just fine, even though we discontinued a couple of electronics books versus the same period a year ago. Variety is solid, even though we had one less Oscar week this calendar year. The situation is reasonably good across the portfolio, and much, much better than last year." 

Reed Elsevier sees its new acquisition of U.S. risk-management business ChoicePoint Inc. for $4.1 billion as a positive step. In the press release, CEO Davis said that combining ChoicePoint and its properties with the company's LexisNexis risk-information and analytics group would solidify Reed Elsevier's position in a fast-growing market.

If you have breaking news to share please contact Steve Smith at ssmith@accessintel.com
Search Jobs
Media Jobs
min Social Networks

Join us on Linkedin
Follow us on Linkedin

White Papers
Get even smarter -- download a white paper today.

Featured White Papers:
All Content is Now Evergreen
By nstein


Making the Move: Tips on How to Create Digitally-Optimized Magazines
By Nxtbook Media Design



... more Whitepapers
min Contests

min contests




To sponsor a min contest in 2010, contact Erica Gottlieb at egottlieb@accessintel.com.

 Reserve your contest in min

min Press

State of Digital MediaThe State of Digital Media

 View Details
                           

Twitter Best Practices for Media CompaniesTwitter Best Practices for Media Companies

 View Details
                           

                                    Internet Sales            Guidebook

 View Details

All min Press

Inside min This Week
Events Calendar

February 16, 2010
min Webinar: How to Monetize Your Video Streams Now
Learn More

February 25, 2010
Managing and Monetizing the Magazine Content Eco-System
Learn More

February 28-3, 2010
4A's Transformation 2010
Learn More

All Events


min
Free Eletters — Sign up Now