This story was written by Rafat Ali.
Alan Meckler, one of the pioneers in the tech trade business online, is exiting the sector, which tells you more about the long-term prospects of big tech trade businesses than anything else. He is in the process of selling off the Internet.com division, part of his company WebMediaBrands (NSDQ: WEBM) (fka Jupitermedia) to Foster City, CA-based vertical media and marketing firm QuinStreet, for about $18 million in cash. The network consists of brads such as flagship Internet.com, InternetNews.com, DevX, Linux Today, and may others. The only site the company has held back is related to semantic search, around which the company also has a trade show.
The deal is subject to shareholder approval, but Meckler and other shareholders. totaling about 40 percent of the outstanding stock, have already voted in favor of the deal. With this, Mecklers company now consists mainly of MediaBistro, the Graphics.com business, its online education offerings (which were started off the MB platform) and the trade shows associated with the businesses. The Internet.com division will do about $14 million in revenues this year, and Meckler told me he is happy with the price considering the economy, and that this gives him the currency to do more acquisitions of blogs and websites in the media/education space.
Thus ends Mecklers era with tech trade, which started back in 1971 in print, and then moved online in 1994. InternetWorld was among the first Internet related trade shows started, and was the reason why I started writing about the Internet (the trade show came to India in 1997, the first such there, and I was assigned by the ad trade mag I used to work for there in Delhi, and thus caught the online media bug).
I spoke to Meckler earlier today, and even though this is a bittersweet moment for him, he is bullish on the MediaBistro platform, which they have expanded into online and offline education series and courses in the media and marketing sector, even as the job listing business has slowed down considerably. The company also hopes to build its Graphics.com design platform into a subscription business, and add educational series to the brand as well. He is not that bullish on a pure ad-driven model, he told me, and wants to build the company going ahead on selling services and subscription products online. Then his expertise in trade shows continues, and he is planning to launch an as-yet undisclosed new show later this year.
Since the pieces left will make a small public company traded on Nasdaq with low visibility, why doesn’t he want to take it private? He explained the rationale to us before. He holds about 43 percent of the companys stock, and says the expenses related to a public company have gone down considerably ever since it outsourced the legal work from NYC to North Carolina (from $400k to $70k a year), and even the auditing expenses have gone down from $2 million a year to $300k. He would rather wait for the upside when the industry recovers as he builds the company around the new focus, than take it private now.
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By Rafat Ali