International: IQ Report: Why connecting matters more than page views on networking sites
While there are obvious caveats with any measure of Internet audience—the FIM number includes properties besides MySpace, and Yahoo has some social-networking sites—the numbers show where the prevailing traffic winds are blowing. They are going in the direction of properties that allow users to connect with other users and create their own content. For advertisers and media buyers, the next step should be to simply follow the eyeballs and soon a proportionate number of ad dollars will flow toward MySpace and its competitors.
Digital media executives watched throughout 2006 as Web 2.0 asserted Internet users’ creative independence from the media giants. And by November, it was nearly a fait accompli.
That was when comScore Media Metrix showed that, for the first time, page views for News Corp.’s Fox Interactive Media, driven largely by MySpace, outstripped those of venerable Internet brand Yahoo. While Yahoo showed a 9 percent decline in page views, to 38 billion, FIM showed a 2 percent increase to 39.5 billion. The spread widened in December, with FIM posting 41.5 billion page views, while Yahoo tallied just under 36 billion.
While there are obvious caveats with any measure of Internet audience—the FIM number includes properties besides MySpace, and Yahoo has some social-networking sites—the numbers show where the prevailing traffic winds are blowing. They are going in the direction of properties that allow users to connect with other users and create their own content. For advertisers and media buyers, the next step should be to simply follow the eyeballs and soon a proportionate number of ad dollars will flow toward MySpace and its competitors.
But some re-engineering may need to take place before that happens. Measured by statistics such as page views, the biggest social-networking sites certainly rival the longtime biggest sites on the Web. But a closer look at their traffic shows that, in fact, they differ markedly from their older competitors. Unique audiences are smaller, and the number of page views per person—especially among the youth demographic that accounts for most of the traffic on sites such as MySpace and Facebook—tends to be much higher. So, while social media rewrites rules of content creation and distribution, it is also poised to revise the analysis around which metrics are important when evaluating advertising properties, as well as what constitutes a successful ad unit.
That causes hesitation among advertisers who use online to energize CPM-driven campaigns. “For advertisers who have a very strict cost-per-acquisition, we tend to not go toward social networks,” says Adam Kasper, svp, director of digital media at Media Contacts, the interactive media unit of Havas. Adds David Cohen, U.S. director of digital communications for Interpublic Group’s Universal McCann: “I don’t think most of our advertisers are looking at social networks just for eyeballs.” The shop’s clients have bought profile pages on MySpace for Sony Pictures and the U.S. Army, among others, in what has become an increasingly popular marketing venture. However, it’s not one that takes advantage of the site’s raw numbers in the same way that a home page buy on a major portal does.
A closer look at traffic numbers makes it easy to see why media planners may never treat sites like MySpace or Facebook the way they do other mass market online properties. For one, there’s the ratio of unique visitors to page views. According to data from Nielsen NetRatings (like Adweek Magazines, a part of the Nielsen Company), an average visitor to MySpace during December cycled through 500 pages of content and spent one hour and 52 minutes on the site. The typical Yahoo user—someone who uses email and checks stock quotes hourly—had only 290 page views, but, with more than 110 million unique visitors, Yahoo had almost twice as many visitors as MySpace. Yahoo users also spent almost 50 percent longer on that property, averaging slightly more than three hours per person. The MySpace audience is spending less time per page, going through almost 4.5 pages per minute, as opposed to 1.6 pages per minute for the Yahoo audience.
The value of social-networking traffic data is very much in the eye of the beholder. Judit Nagy, vp, consumer insights for FIM, sees all those page views and concludes, “There are many ways to reach a person” on the site. Others see it as evidence that people who go to social-networking sites are not in the mood to look at ads. “They’re not disposed to look at these ads in that environment,” says Curt Viebranz, CEO of Tacoda, which to date has not added social networks to the portfolio of properties in its online ad network.
Even as social-networking properties make gains in ad revenue, they lag behind more established sites. In an appearance earlier this month at the McGraw-Hill Digital Media Summit, News Corp. chairman and CEO Rupert Murdoch said MySpace was generating almost $25 million in ad revenue per month and growing at almost 30 percent per quarter, which would put its ad revenue in excess of $450 million by year’s end. Yahoo had almost $1.5 billion in ad revenue in the fourth quarter of 2006 alone.
Does that mean that page views on Yahoo are therefore worth more to advertisers than those on MySpace? The short answer is yes, but if advertisers and social networks can get better at leveraging traffic to build deeper connections with users, page view numbers may lessen in importance. (Yes, social networks do sell banners, buttons, streamed video and search ads, but they aren’t the revenue drivers they have been for earlier sites.) After all, what those numbers represent is the ultimate technological expression of word-of-mouth, where people make connections to other people, entertainment and services through the most massive chat rooms ever built. And most of the online ad industry’s metrics don’t really get at that. “What MySpace can really offer is the engagement value,” says Nagy, who, previous to joining FIM, worked at Yahoo.
Just as the foundation ad unit of a portal is the banner, for a social-networking site it’s the profile page, an area devoted to one advertiser. What those areas offer can be as varied as advertisers themselves, but what they share is a desire to integrate themselves into the social-networking environment. Universal McCann’s MySpace profile for the Army (myspace.com/army) gives users the ability to chat with the virtual Sgt. Star, play video games and download podcasts. The real difference from an advertiser’s main Web site is in features that allow the profile to make friends and receive comments. As of mid-February, the Army has 13,128 friends ranging from wannabe pinup girls to enlisted personnel.
Burger King’s long-running profile of The King (myspace.com/burgerking) has 135,360 friends. Its popularity can be attributed to the ways King makes his friends. For instance, his profile page offers free downloads of the Fox series 24. There have been 800,000 streams and downloads of Fox series so far, according to Tia Lang, manager of media and interactive for the Miami-based Burger King. “What we look for in terms of the social-networking sites is to focus on our super fan,” she says.
Clearly, an advertiser’s comfort level with using friends and other connectivity measures as metrics depends on its objectives. No one, from agency executives to officials at the social-networking sites, believe the current state of measurement is enough—it will have to improve before these sites become advertising juggernauts. “I’d like to see some ad engagement metrics from social networks,” says Chad Stoller, executive director of emerging platforms at Omnicom Group’s Organic.
MySpace says it is working on a number of projects to better track the word-of-mouth that travels through its site. Mike Murphy, chief revenue officer of Facebook, which last September opened its site to registered users beyond its core college audience, says new technologies and ad offerings on the site make it possible to do just that. Using News Feed and Mini-Feed, technologies that the company unveiled to users in September, the site can now send constant updates on people within an individual user’s network to their home page. “It’s a ticker of news of what’s going on with your 140 friends,” Murphy explains.
Facebook extended the program to advertisers by incorporating something it calls “Sponsored Stories” into the feeds. If one of the stories is clicked and the user joins the advertiser-sponsored group it links to, the entire user’s network is informed and, theoretically, viral marketing ensues. The feeds show the activity of trusted friends, Murphy says, and because of this the site is seeing click-through rates of as high as 10 percent on Sponsored Stories.
The site, which had 4.5 billion page views in December, also has deals with washingtonpost.com and NYTimes.com to allow Facebook users to share content. It’s easy to see how these technologies can help measure engagement. Facebook can track not only how many News Feeds ran a Sponsored Story, but whether the message was passed on virally.
Murphy says that impressions created virally have a higher worth because the impression is created by friends. The simple click-through “can’t be enough of a measure,” he says.
That should intrigue any advertiser looking to reach the hard-to-pin-down youth market, but the push by social networks to monetize their unusual metrics could have even more resonance with smaller social networks. These sites, focused on specific interests that attract older audiences (age 35 and up), differ from the younger-skewing networks in that it’s an online representation of the nesting instinct instead of the singles bar freneticism of a MySpace or Facebook. Those who go to sites like Gather.com, which builds networks around people’s passions, spend less time on the site and have fewer page views per person. They are focused on a particular connection they’d like to make and then they leave. “Adult audiences have a higher [need] for return on their investment—their investment being time,” adds Tom Gerace, founder and CEO of Gather.
In late October, Amtrak launched a group on Gather for people who are passionate about train travel called Amtrak Presents: All Aboard! At 4,227 members, it is one of the largest on the site, advertiser sponsored or not. With 1 million monthly unique visitors, Gather is much smaller than MySpace. But because over 70 percent of its audience is college educated and in the 30 to 59 age range, it has a comfort level for certain advertisers that the bigger, youth market social networks don’t. For Amtrak, which generally uses the Internet for transactional marketing, Gather is the only place it is running a sponsored group. “We’re getting them engaged in a conversation,” says Gail B. Reisman, senior director of integrated advertising and East field sales for Amtrak.
With advertiser-sponsored groups, a site’s overall page views hardly matter. The more important metric is the hard-to-define depth of the connection the advertiser makes with users.
As social networks, large and small, become better at creating and defining connections with advertisers, it’s easy to see how size may begin to matter less, diminishing the importance not only of the page view, but eventually other metrics, such as unique audience, with it. The more important issue will be whether the advertiser is reaching the right audience. Because in marketing, it’s all about making the right friends.
Source Mediaweek
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Uber appoints Lucinda Barlow as Senior Director of Marketing for Asia-Pacific
Prior to this, Barlow was Global Marketing Director at YouTube
Uber has appointed Lucinda Barlow as Senior Director of Marketing for Asia-Pacific. Barlow will be based in Australia and will be responsible for the marketing of Uber products and businesses other than food delivery service Eats.
Prior to this, she was Global Marketing Director, YouTube. She worked for Google as head of corporate communications and public affairs and later as marketing director for Australia and New Zealand. She has also worked for Symbian, the company that created the operating system for Nokia’s range of smartphones.
‘Uber has had an extraordinary impact on the lives and livelihood of millions of people. I’m thrilled to join the Asia-Pacific team to help bring further mobility, freedom and opportunity in this exciting region,’ Barlow was quoted as saying.
‘She (Barlow) is uniquely positioned to lead Uber’s Asia Pacific brand, product marketing and reputation efforts, and support the continued growth of a stellar regional team,’ a press note from Uber said.
‘Lucinda brings over 20 years experience in internet, technology and mobile business across Asia, the United States and UK. From a former mission critical systems engineer at BHP, to leading YouTube marketing globally, to launching Symbian’s first office in China, to building marketing functions at two internet start-ups, Lucinda is an agile leader with an industry acclaimed track record of delivering impact at a staggering scale.’
Barlow wrote on twitter:
Incredibly excited for my next chapter. I'm joining Uber to lead marketing in APAC. This is a company and region I'm passionate about. https://t.co/IQB5cjfECq
— Lucinda Barlow (@lucindabarlow) October 9, 2019
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ShareWPP AUNZ's Switched On to join AKQA, Australia
The joint entity’s emphasis will be on rich, innovative brand storytelling throughout the entire customer journey
WPP AUNZ has announced its Sydney-based digital marketing and media consultancy, Switched On, will join the Australian arm of global innovation and experience design agency AKQA.
This union is in direct response to client interest and demand for comprehensive digital solutions that help define, find, connect and inspire customers across all brand interactions, from acquisition through to retention. The joint entity’s emphasis will be on rich, innovative brand storytelling throughout the entire customer journey, bringing clients’ long-term brand purpose to life whilst maintaining a laser focus on short term performance.
John Steedman, interim CEO WPP AUNZ said: “This is two teams with momentum becoming one, and a bold move by them both. It’s driven by a burning desire to provide pioneering solutions from two highly experienced senior local teams.
“Joining Switched On and AKQA formalises the close working relationship both agencies already have. The partnership uniquely combines media, tech, data and design literally under one roof. The result is a stronger client offering and WPP AUNZ is proud to support them,” Steedman concluded.
By fusing their respective MarTech and AdTech capabilities, the driving principle will be to deliver on the unfulfilled promise of large technology platforms and connected transparent media investments.
“This initiative is a terrific example of our team’s growth mindset and a shared vision of the future. Both agencies are at the top of their game. It’s a powerful combination that offers a modern, post-broadcast perspective to the interface of customer and brand,” said Brian Vella, AKQA Managing Partner.
The new offering builds on the success of AKQA Media in San Francisco, an elite business that delivers a 360-degree view of brand experience for clients including GAP, Volvo and Uber through an integrated approach to media, technology, and data.
“AKQA Media is widely regarded as one of the world’s premier media and technology agencies, something we believe will resonate well with Australian marketers,” Vella continued.
“As the worlds of marketing, technology, and customer experience converge, it’s clear a strategic reprioritisation of brand building is essential. We feel what’s needed is a unified proposition that straddles the need to balance this long-term vision with the reality of short-term performance in today’s digital age. That’s why we’ve come together,” said Chris Hitchcock, Managing Director, Switched On.
The combined entity’s capabilities offer an unrivalled depth and breadth of experience with more than 300 team members covering:
- Digital Consulting
- Performance Media
- Creative Strategy & Storytelling
- CX and Transformation Strategy
- Experience Design
- Communications Planning and CRM
- Technology and Engineering
- Commerce Data, Insights and Personalisation
- Innovation and R&D
- Social and Influencer Marketing
Switched On will continue to be led by Managing Director, Chris Hitchcock, responsible for the continued success of the Switched On team and its integration into AKQA. Hitchcock will join the AKQA Executive team, reporting into Brian Vella, Managing Partner of AKQA in Asia Pacific. Both agency brands will continue, with Switched On transitioning to become AKQA in the future.
AKQA operates in 28 markets globally, with over 2100 people worldwide. In APAC the studios who collaborate closely include Melbourne, Sydney, Auckland, Tokyo, and Shanghai. It most recently was awarded two Grand Prix Lions at the Cannes Lions Festival of Creativity.
AKQA and Switched On are part of WPP AUNZ, Australasia’s leading creative transformation company.
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Helena Snowdon is Publicis Media ANZ’s new business and marketing head
The former Mindshare MD, who has also been previously associated with top global media agencies like PHD, Maxus and iProspect, replaces Mandy Henry
Helena Snowdon has been appointed Publicis Media’s head of business and marketing for Australia and New Zealand, as per media reports. The former Mindshare MD replaces Mandy Henry.
Snowdon has been previously associated with my global media agencies, including PHD, Maxus and iProspect. She was managing director Mindshare Melbourne from May 2017- September 2018.
“I feel privileged to be joining Publicis Media, working with the executive leadership team in ANZ, as well as the talented teams at Starcom, Spark Foundry, Zenith and Performics,” Snowdon was quoted as saying. “Publicis Media presents a progressive and transformative model which opens up huge opportunities for clients. I’m looking forward to playing my part in communicating this message and meaning across ANZ, and driving further impact and growth for the business overall.”
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CNN International Commercial appoints Phil Nelson as Chief Operating Officer
Previously, Nelson was Managing Director, Turner North Asia and South East Asia Pacific
CNN International Commercial (CNNIC) has appointed Phil Nelson as Chief Operating Officer (COO) to lead CNN’s operational and international growth initiatives outside of advertising sales.
As COO, Nelson will oversee CNNIC’s Business Development and Strategy, Finance, Strategic Planning and International Sales Operations as well as its Content Sales and Licensing. This includes managing and growing CNN’s relationships with over 300 digital, broadcast and Out of Home content partners – from local CNN branded channels to airlines and hotels that carry CNN content live and on-demand.
Previously, Nelson was Managing Director, Turner North Asia and South East Asia Pacific. In this role, he has overseen all aspects of Turner’s business in these regions including distribution of CNN International and taking a key role in establishing local partners CNN Indonesia and CNN Philippines. Nelson has also held other business development and strategic planning roles at Turner since he joined in 2010 and has significant digital experience from his time at AOL, culminating in him being Managing Director for AOL Asia. In addition, Nelson holds an MBA from Harvard University and, prior to entering the corporate sector, was a commander in the US Navy.
Nelson will be part of the CNNIC Senior Management team, reporting directly into Rani Raad, President of CNNIC, and will work closely with a wide range of divisions across CNN and WarnerMedia. Nelson will continue to be based in Singapore in the near-term and his team is spread across the globe, particularly in key CNNIC hubs of Hong Kong, Singapore, London and Miami.
“The CNNIC business has continually evolved since it was created back in 2013 to optimise the revenue, brand and commercial partnerships across our dynamic offering of CNN content and products,” said Rani Raad. “I am delighted that Phil joins us as we enter the next chapter of our business in a role that brings together all the operational, strategic and non-advertising sales revenue under one leadership. Phil has a first-rate track record at Turner and will bring a unique skillset of business acumen, creative thinking and forensic focus.”
“After many successful and exciting years at Turner Asia, I am very pleased that my next move is within the WarnerMedia family to a brand as remarkable as CNN,” said Phil Nelson. “CNNIC has done a great job in innovating and adapting its business to stay ahead of the competition during a period of unprecedented change in the news and media industry. I am looking forward to contributing to this success in the years to come.”
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Giorgio Presca named Clarks CEO
Presca to join in March, will manage operational, financial and commercial aspects of the business and lead the Clarks strategy with the Executive Committee
Clarks, the global casual footwear brand, has announced the appointment of Giorgio Presca as Chief Executive Officer.
Presca will be responsible for all operational, financial and commercial aspects of the business and will lead the Clarks strategy with the Executive Committee. He will join the company in March.
Presca, born in Trieste, Italy, has more than 20 years of experience in managing and developing global premium brands, particularly in the footwear and apparel industries, working across listed, private-equity-owned, family-run, and founder-led businesses.
His most recent position was CEO at Golden Goose Deluxe Brand, where he led the operating transformation, rapid growth and global expansion of the business.
Between 2012 and 2016, he was CEO at Geox where he executed a brand and company turnaround and returned the business to profitable growth. Giorgio has built his track record in senior leadership positions in Diesel, VF Corporation Jeanswear International division, Citizens of Humanity, Levi Strauss & Co. and Lotto.
Commenting on the appointment, Tom O’Neill, Chairman, said: “I am pleased to welcome Giorgio to Clarks as our new CEO. He brings a wealth of experience, including a deep understanding of the footwear market. He will work together with interim CEO Stella David to ensure a smooth transition over the coming weeks, after which Stella will return to her previous role as non-executive director. I would like to thank Stella for stepping in as interim CEO at a challenging time for Clarks and for her tireless and engaging leadership in the role.”
Presca said, “I cannot wait to join an iconic and historic brand like Clarks and work closely with the Board, the Executive Committee, its 13,000 people and operating partners across the world. Clarks faces the challenges of today’s competitive markets, changing distribution channels and the need to adapt to a rapidly evolving consumer environment but has the competences and assets to return to sustainable growth and profitability in the course of the next few years.”
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Tupperware appoints ex-PepsiCo exec, Chris O'Leary, to its board of directors
O'Leary has more than 37 years of operational and leadership experience, having served in several strategically important executive positions at companies like General Mills & PepsiCo
Tupperware Brands has appointed Chris O'Leary to its board of directors, according to media reports.
O'Leary joins the US-based kitchen and households product company renowned for its model of direct sales as it looks to ramp up global growth. He takes up the new role immediately.
Rick Goings, Executive Chairman, Tupperware Brands said, "We are pleased to have Chris join our board. He brings more than 37 years of operational and leadership experience to Tupperware, having served in several strategically important executive positions at major global consumer product companies including General Mills and PepsiCo. We believe the combination of his deep industry knowledge, broad international experience and strong, proven leadership skills will be invaluable to the Company as we continue to execute our global growth strategy."
O’Leary previously spent 16 years at PepsiCo, Inc., where he held numerous roles, culminating in serving as Chief Executive Officer and President of Hostess, Frito-Lay, Inc. before moving to General Mills. In almost 20 years there, he became head of international business before leaving the company in 2016. He holds a Bachelor of Business Administration in marketing from Pace University and a Master of Business Administration from New York University.
Commenting on the appointment, O'Leary said, "I look forward to working closely with board members and the management team to provide new insights and perspectives as Tupperware continues to take aggressive steps to advance its performance and drive enhanced value for shareholders."
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International: Hottest media property that's not for sale? Time Inc.But skeptics question top execs' real long-term intentions
Time Inc. consistently makes impressive double-digit profit margins and is considered by many a good media business, a still-growing company with as-yet-unlocked potential synergy with the rest of the Time Warner operation. Yet everyone from the Time & Life Building to Wall Street and Nebraska keeps on wondering when the property is going to be dealt.
Time Warner chief Dick Parsons recently told a "town hall" meeting of 400 employees about a conversation he'd had with Omaha investment wizard Warren Buffett on the subject of selling Time Inc. "As your friend, don't do that, it's a good business," said Mr. Buffett, according to people who heard Mr. Parsons recount the story. "But," he added, "if you do sell it, sell it to me."
And there's the rub. Time Inc. consistently makes impressive double-digit profit margins and is considered by many a good media business, a still-growing company with as-yet-unlocked potential synergy with the rest of the Time Warner operation. That fact, along with Mr. Parsons' persistent denials that there are any plans to sell, ought—one might think—to kill this story. Yet everyone from the Time & Life Building to Wall Street and Nebraska keeps on wondering when the property is going to be dealt.
It's also been noted that Mr. Parsons, whose contract is up in May 2008, is not Jeffrey L. Bewkes, Time Warner's president-chief operating officer and the company's heir apparent. And Mr. Bewkes has repeatedly said that nothing is off the table. "It is constantly looked at," Mr. Bewkes said at a Goldman Sachs media conference last September. "What should we not have? Or what should we get?" Many people believe Mr. Bewkes would sell Time Inc. for the right price.
A note to skeptics: Time Inc. could probably fetch bids above $16 billion. Try finding a CEO who wouldn't at least slow down for a look.
Anyone following the ongoing upheavals in media—not to mention the jangled nerves following round after round of layoffs at Time Inc., where McKinsey & Co. is now examining areas like information technology and finance—won't be surprised to hear that questions over Time Inc.'s place at Time Warner aren't going away.
The Monday after Mr. Parsons' "town hall," as it happens, a Bear Stearns analyst raised his rating on Time Warner to "outperform" partly because he believes the company, particularly once Mr. Bewkes takes over, will get more aggressive about restructuring its portfolio. To wit: It could merge AOL with another leading web property—or perhaps could spin off Time Inc.
"We think that the publishing division is the least attractive strategic fit with Time Warner's other video-centric businesses such as cable networks, cable systems and filmed entertainment," said the analyst, Spencer Wang, in his note. Combined with challenges in the magazine business such as slow growth due to online cannibalization, he said, there could be several benefits of divesting publishing.
A year ago, Reed Phillips—managing partner at the media-investment bank DeSilva & Phillips—would have given a Time Inc. sale or spinoff no chance. "Today I would no longer say 'never,' because Time Warner has continued to change and evolve," Mr. Phillips said. "I get the clear impression that the company is focused on operating performance and measures how each division is doing and how each division contributes to the overall company. And if there's a sense that part of the company is no longer contributing in the way that top management expects, I don't think anything's sacred."
Top management at Time Warner, like that at any public company, is under pressure to improve revenue and earnings year after year, no matter the market conditions. Although Time Inc. Chairman-CEO Ann S. Moore is expanding quickly online, moving the needle with print has proved much harder. That has forced strikingly difficult decisions, most recently last week's death sentence for the Life newspaper supplement.
"Wall Street wants to see growth," said Robert Safian, the Fast Company editor and Mansueto Ventures managing director who worked for Time Inc. titles Money, Fortune and Time during the last decade. "The bigger your base, the more you need in raw terms to show it. But if you back Time Inc. out of Time Warner and there's more growth in other divisions, then the overall growth might look bigger."
Plenty of people still consider the idea—first pushed to the front burner during Carl Icahn's 2006 drive to break up Time Warner—to be unlikely, impossible or ridiculous. For one thing, "Time" is the name on Time Warner's door, said Andrew Swinand, president-chief client officer at media agency Starcom USA. "I would be shocked if they sold it," he said. "For me, the biggest thing is that Time Warner as a company needs to be dynamically flexible. I still believe that the initial vision of integrated media was correct. I just believe that they haven't activated it."
The tax hit on any outright sale would be painful too, if less so in a spinoff to shareholders (which could lead in turn to a takeover). Time Inc. also owns huge stores of content that should prove valuable in a Long Tail world. And the company has been securing better position for showing growth by cutting costs, redirecting investment to digital projects, selling 19 magazines and closing two others.
"Corporate has worked closely with Time Inc. in developing its new online strategy, which is showing success," a Time Warner spokesman said. "We don't have any plans to spin off Time Inc." A Time Inc. spokeswoman referred inquiries about the company's relationship with Time Warner to the parent company.
Finally, there's the issue of price, but that could cut either way. Two media bankers said a premium property like Time Inc.—which really has no equal in its business—would command a sky-high multiple of perhaps 15 times earnings before interest, taxes, depreciation and amortization. Last week's client note from Bear Stearns estimated that Time Warner's publishing division will have 2007 EBITDA of nearly $1.1 billion, which could put a bid close to $16.5 billion.
That is not a figure anyone would take lightly—neither a potential bidder nor the potential seller.
But the money is out there. "Private-equity firms have become so much bigger in the past year that now that kind of bite size is attainable," Mr. Reed said. "A private-equity firm could do that transaction today. It would have been much harder to do a year ago, but they've raised so much money, and you see all the time that they're looking at big media opportunities."
Time Warner shareholders wouldn't let management ignore a $16 billion offer either. "Companies can't just stiff-arm shareholders," Mr. Reed said. "They really have to listen today, more and more."
Meanwhile, the thousands of Time Inc. employees who survived the cuts of 2005, 2006 and 2007 walk the corridors occasionally wondering what Ms. Moore, Mr. Parsons and Mr. Bewkes really think of them.
"I don't think anyone is confident that Time Inc. will stay part of Time Warner," said one former Time Inc. executive, who predicts the conglomerate will eventually split up. "From the CEO down, everyone questions whether or not Time Inc. will be spun off."
There certainly could be advantages for an independent Time Inc., such as a better ability to focus on long-term strategy. Mr. Swinand, the sale skeptic, said Time Inc. would have fewer resources on its own but would be speedier and more flexible.
Mr. Reed, the agnostic, said Time Inc. wouldn't lose much if separated from Time Warner and would retain enormous clout. "They would also be able to invest much more aggressively in taking the brands into the digital realm," he said. "They're doing a pretty good job already; it's just that they're hamstrung by having to deliver earnings to the parent company."
All the talk of speed and aggression, as a matter of fact, reflects the reality of the magazine business today. It's in transformation. The business will survive, but those publishers that adapt best will thrive the most. Others will keep having to make difficult choice after difficult choice, pinned between the need to prepare for the future and the state of the field today. Even though Time Inc. owns some incredibly powerful brands, really changing the business model might take a "reset" year—which Wall Street rarely allows public companies.
As things stand, the need to make short-term numbers all the time is breeding resentment.
"Basically the dollars are going into digital at that company," the former Time Inc. executive said. "If you're not one of the four weeklies, people are very frustrated. They are not putting money behind transforming the women's lifestyle publications. Those are the ones that have had constant growth, and yet they're not getting the investment."
Another former staffer recalled the speculation among Time Inc. employees. "There was hallway chatter about it at different times," the ex-staffer said. "Sometimes it was hopeful. 'Wouldn't it be great? Will Warren Buffett buy us?' Other times people said, 'Who would buy us and what would they do with us? They might squeeze us even harder. That Midtown real estate is expensive. Maybe Time Inc. could move to Princeton, N.J.'"
Source: Adage
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