Post Co. Sells Technology Magazines And FOSE Show to California Firm
Saturday, December 9, 2006
The Washington Post Co. has agreed to sell Post Newsweek Tech Media, its portfolio of technology magazines, to 1105 Media of Chatsworth, Calif., for an undisclosed amount, acknowledging that the business-to-business venture no longer fits the company's strategy.
The magazines include Government Computer News, Washington Technology, Government Leader and Defense Systems. Also included is FOSE, the annual information technology convention put on by Post Newsweek Tech Media.
"Unfortunately, we could never seem to make the business work," said John B. Morse, The Post Co.'s chief financial officer. All of The Post Co.'s other media assets are consumer-oriented.
The company acquired the magazines in the 1990s at the height of the Internet boom in a bid to aggregate readership and advertising dollars in the Washington technology community. Although the magazines performed relatively well, Morse said, they were not growing and recently have experienced advertising slumps. The company wrote down their value by $9.9 million in its most recent earnings report.
The Post Co. rarely sells its assets, and Ann McDaniel, a Post Co. vice president, said this sale does not represent a move in that direction. The company also owns the Kaplan education company, Cable One, six television stations, Newsweek, the online magazine Slate, Washingtonpost.Newsweek Interactive and a newspaper division that includes The Washington Post and suburban papers.
The sale of the magazines is, rather, the result of The Post Co. attempting to buy another tech magazine. Eighteen months ago, The Post Co. was negotiating to buy 101 Communications, which owned Federal Computer Weekly, a rival of Government Computer News.
But 101 also owned magazines that The Post Co. did not want, such as Redmond, which covers Microsoft. So the talks ended.
Earlier this year, however, 101 Communications was purchased by 1105 Media, and the new owners approached The Post Co. about acquiring its tech magazines. The Post Co. considered the offer a good opportunity, McDaniel said.
Now Federal Computer Weekly will be paired with Government Computer News at another company.
"We deeply respect the long history of service that [Government Computer News], Washington Technology and FOSE have provided to this market, and we expect that to continue and to grow," Neal Vitale, 1105 Media president, said in a written statement.
For the first nine months of 2006, The Post Co.'s magazine division reported a 60 percent drop in operating income, from $26 million to $11 million, which it attributed to diminished magazine revenue and the $9.9 million write-down on the Tech Media magazines.
In an unrelated move, The Post Co. raised the cover price of Newsweek to $4.95. . In May, the magazine raised its price from $3.95 to $4.50. It has experienced a continuing decline in advertising revenue.