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Ziff Happened, All Right
Imagine Wired's surprise upon waking up one June morning last year to find that Ziff Communications Company was for sale. Just a couple months before this shocker hit the headlines, the reclusive Ziff family - Bill Jr. and his sons Dirk, Robert, and Daniel - had relaxed for a nice long chat with Wired's David Armstrong. Funny - despite our leading questions, the word "sale" never crossed their lips�.
Though the brothers Ziff vowed to keep their empire intact, no one, it seems, was willing to swallow the whole US$2-3 billion enchilada. In the end, the company was sold in four chunks, garnering the Ziffs in excess of $2 billion. Their publishing company, which will remain under existing Ziff management, was the first to go.
By far the largest piece of the Ziff family business, Ziff-Davis Publishing Company sold for $1.4 billion. Its stable of computer magazines, including PC Magazine, PC Week, PC/Computing, Computer Shopper, MacWeek, and MacUser, was bought by Forstmann Little & Co., a large but low-profile New York-based private investment firm. News of the intended sale broke on October 27, 1994, though the deal wasn't inked until the last days of December. The Ziff-Davis/Disney venture, Family PC, and Computer Life were also part of the package.
Privately held since 1927, Ziff Communications now faces radical change. According to sources at Ziff-Davis, Teddy Forstmann, 54, announced that he plans to take the company public in three to five years. To keep valuable employees from heading for the hills in the interim, every Ziff-Davis employee enrolled in the profit-sharing plan was immediately vested (a process at Ziff that normally requires seven years' hard labor), and generous holiday bonuses were also doled out.
Ziff-Davis Expositions was off the block next, on October 31. The bill: $202 million, picked up by Tokyo-based software distributor and magazine publisher Softbank Corporation. The company already publishes Japanese versions of PC Week and MacUser. Ziff-Davis's Information Access Company, which provides electronic indexes, abstracts, and information from trade and industry publications, went on December 8, to Canadian media concern Thomson Corporation, for a whopping $465 million.
But industry watchers were most interested in who would buy Interchange Network Company L.P., developer of Interchange Online Network. Cambridge, Massachusetts-based Interchange was Ziff's pricey (and, at this writing, not-yet-launched) online service, specifically designed for electronic publishing.
Three days before Christmas, AT&T announced that it would purchase Interchange for more than $50 million - a deal when you consider that Ziff had already invested tens of millions to develop and test the service. It was made an even better deal by the subsequent announcement that TCI was investing in the Microsoft Network at an implicit valuation of over $600 million.
Throughout the past six months, the firmly retired Bill Jr. has publicly stood behind his sons' decision to sell the family business. - Janice Maloney
[Original story in Wired 2.05, page 86.]
Internet Flames Scorch West
As part of the Republicans' new "Contract with America," the House of Representatives put forth legislation called the "Paperwork Reduction Act." This bill, introduced on February 6, 1995, contained a provision, widely believed to have been inserted for West Publishing, that would have limited the government's right to dis-seminate or provide public access to databases. But on February 10, flames from Net users put the kibosh on West's plans, and the provision was struck from the bill. More details next month.
[Original story in Wired 2.05, page 98.]
Blame the Consumer
Last March, Performance Systems International (PSI) and Continental Cable Vision announced Internet access delivered over the TV cable system. Would-be customers in Cambridge, Massachusetts, were promised data rates of 500 Kbits per second for US$125 a month. More than a year has passed, and the service has yet to get off the ground. One problem, says Jeffrey Shapard, PSI's cable product manager, is Continental's television cable. "Some segments are cleaner than other segments. When we run data communications over it, we have to tune. We have the individual service in beta."
Meanwhile, Cambridge residents will have to keep waiting. For how long? Nobody's sure. "We stopped saying dates. Every time we say a date, we get burned."
[Original story in Wired 2.05, page 28.]
The Zillionaire Fumbles (Again)
Seems Paul Allen's flagship company, Asymetrix, is acting true to form. After recent, massive layoffs (more than 89 people were let go, and many have handed in resignations), Jesse Berst, an editor at Windows Watcher newsletter, told the Wall Street Journal on January 17, "[Asymetrix] had a great mind-share lead and squandered it."
Though its bylaws call for yearly meetings, the 10-year-old Asymetrix called its first shareholders meeting on March 15, 1995. At press time, it was rumored that current employees will have their stock reissued: those who are vested will no longer be, and will possess shares at a lowered stock valuation. This will disenfranchise all former employees, including those who developed the products on which Asymetrix turns a profit. If this plan goes down, it will be the second time Asymetrix has revalued its stock.
Company spokesmodel Vern Raburn contended that Asymetrix had been spending too much capital on R&D. But informed sources speculate that the company probably hasn't spent much money on pure-form R&D since 1989 - the last time it had a major layoff. Raburn, eerily recalling statements made by industry analysts after the '89 layoffs, was quoted in a January 25,1995, Seattle Times article as saying, "It's time to start making money on some of the investments we've made, so there's more of an emphasis on making money than there was at Asymetrix four or five years ago."
[Original story in Wired 2.08, page 94.]
