Cahners Business Information
Cahners Business Information
Wholly Owned Subsidiary of Reed Elsevier plc
Sales: $900 million (2000 est.)
NAIC: 511120 Periodical Publishers; 514191 On-Line Information Services
Cahners Business Information publishes trade, or “business-to-business,” magazines serving the media, manufacturing, electronics, construction, and retail industries. Cahners Business publishes more than 135 magazines, bearing titles such as Variety, Broadcasting & Cable, Construction Equipment, Hotel & Travel Index, Publishers Weekly, and Pharmaceutical Laboratory. The company also publishes information and marketing solutions through more than 125 webzines and web portals. A member of the London-based Reed Elsevier plc group, Cahners Business complements its print and online publications with an extensive roster of directories, research, and direct-marketing lists.
Cahners Business was formed in 1998, its birth created by the combination of three companies—Cahners Publications, Chilton Publications, and Reed Travel Group—owned by the nearly $6 billion-in-sales Anglo-Dutch conglomerate Reed Elsevier plc. The history of the Cahners name stretches back well before 1998, however, as do the histories of Chilton and Reed Travel.
Of the three companies, Chilton Publications is the eldest, formed in 1904 by two partners who owned a printing operation and published a bicycle parts magazine. The partners chose the name Chilton from a passenger list of the 1620 voyage of the Mayflower, one of their first printing jobs. Through the years, Chilton Publications developed into a major publisher of do-it-yourself manuals, automotive guides, and specialty business publications such as American Metal Market and Motor Age.
Reed Travel traces its roots to 1928, when Elwood Ingledue created the first hotel referral system. He published 70 hotel brochures, each bearing the name Hotel Informant, which were displayed on racks in hotel lobbies in California. Following the success of the Hotel Informant, Ingledue published the Hotel Index and the Travel Index in 1929. The two titles were later merged, creating the Hotel & Travel Index, which proved to be an indispensable aid to travel agents across the globe. The Hotel & Travel Index was acquired by Ziff Davis during the latter half of the 1960s, one of a series of acquisitions he completed during the period. Combined, Davis’s acquisitions formed The Travel Group, which was later acquired by publishing magnate Rupert Murdoch. In 1989, Murdoch sold the group to Reed International, the English half of Reed Elsevier plc.
Cahners Publications, distinct from Cahners Business, got its start shortly after the end of World War II. The company’s first magazine, The Palletizer (renamed Modern Materials Handling), was started by Norman Cahners. Cahners and an ex-U.S. Navy ordnance officer named Saul Goldweitz developed Cahners Publications into a formidable trade magazine publisher and trade show management company, achieving enviable success during the 1960s, when the trade magazine industry was expanding rapidly. Cahners Publications developed a reputation as one of the first niche publishing firms, emerging as a pioneer in the publication of magazines with sharply focused, specialty subject matters. The trade magazines, which were distributed according to a system known as “controlled circulation,” subsisted entirely on revenue derived from advertisers.
All three of the companies that came together to form Cahners Business experienced a number of changes in ownership. Cahners Publications began as an independent company before London-based Reed International acquired a 29 percent stake in the company in 1970. By 1977, Cahners Publications was a wholly owned subsidiary of Reed International. After changing hands from Ziff Davis to Rupert Murdoch, the Travel Group joined Reed International in 1989, operating under the same corporate umbrella as Cahners Publications. Chilton Publications fell under the stewardship of several parent companies, beginning with the American Broadcasting Corporation before being sold to Capital Cities and then later to Walt Disney Company. The merger of the three companies occurred under the direction of a new parent company, created in 1993.
Formation of Reed Elsevier: 1993
In 1993, Reed International and a Dutch company named Elsevier NV created a joint venture company named Reed Elsevier plc. As part of Reed International, Cahners Publications and the Reed Travel Group became part of the new company, although each business operated separately. Under the Anglo-Dutch management of Reed Elsevier, Cahners Publications was instructed to complete a number of divestitures. In 1995 the Reed Elsevier subsidiary sold its consumer magazines—14 titles, including such names as Modern Bride and Sail —for an estimated $160 million. Reed Elsevier’s vice-president of finance explained the reasoning behind Cahners Publications’ withdrawal from the consumer sector, remarking in a December 1998 interview with Folio, “We made the decision to exit all cyclical consumer markets and put those proceeds into higher margin science, professional, and business titles.”
Roughly a year after Cahners Publications exited the consumer magazine market, the company gained the leader who would oversee the merger of the three Cahners Business companies. In May 1996, Bruce Barnet was appointed president and chief executive officer of Cahners Publications. Oddly, given the company’s recent withdrawal from the consumer sector, Barnet’s career was steeped in consumer magazine publishing. He had spent 22 years at Time Inc., serving, during one period, as president of Time Asia. Barnet left the Time organization in 1990, becoming president of Riordan Publishing, then president and chief executive officer of Cowles Enthusiast Media. Bar-net’s selection as president and chief executive officer of Cahners Publications represented his first job in trade publishing.
Barnet’s first major task at Cahners Publications was a formidable one. In September 1997, Cahners Publications acquired Radnor, Pennsylvania-based Chilton Publications, paying ABC Inc., a subsidiary of Walt Disney Company, $447 million. At the time of the acquisition, Cahners Publications published 90 titles and Chilton Publications published 39 magazines, covering subjects related to the automotive, jewelry, eye care, entertainment, manufacturing, and food industries. Barnet was charged with integrating Chilton Publications’ magazines and its research operations, Chilton Marketing Research Co., into the Cahners Publications organization, but first a name change was deemed in order. Reed Elsevier executives were keen to establish the name of their company in the United States, prompting them to christen the combination of Chilton Publications and Cahners Publications as Reed Elsevier Business Information.
The new corporate banner did not fly for long. Barnet disliked the new name, expressly because the Reed Elsevier name was relatively unknown in the United States. The Cahners name, however, enjoyed widespread recognition among readers and, perhaps most important, among advertisers. Barnet convinced his superiors at the London offices of Reed Elsevier to capitalize on the Cahners cachet, resulting in the switch to Cahners Business Information as the company’s corporate title in March 1998.
Debut of Cahners Business Information: 1998
By the time Reed Elsevier executives had settled on a new name—after reportedly sifting through more than 2,000 names—Reed Travel Group had joined the fold. In September 1997, the same month the Chilton Publications acquisition was completed, Reed Travel Group became mired in a scandal involving the fraudulent over-reporting of circulation figures for its magazines, according to Folio. In response, Reed Elsevier, as the group’s parent company, put Reed Travel under Barnet’s control in January 1998, at which time the business was renamed Cahners Travel Group.
Against the backdrop of acquisitions, mergers, and restructuring efforts, Barnet applied himself to the difficult task of integrating Chilton Publications into Cahners Business. From late 1997 through 1998, Barnet completed a number of divestitures. In November 1997, the first group of magazines was sold to the Washington Post Company. The sale involved the company’s 24-title computer group, which included trade journals such as Reseller Management and Government Computer News. The motivation behind the divestitures echoed the reasoning offered by Reed Elsevier officials in 1995. “The concept was to emphasize and prioritize markets,” Barnet told Folio in December 1998. “In doing so,” he continued, “we had to readjust portfolios and eliminate those titles not worth investing in.” Along with the divestitures came additions to Cahners Business’ library of magazine titles. The company acquired Gifts & Decorative Accessories and Playthings, among others, and started several new publications on its own, such as Pharmaceutical Laboratory and Digital TV. The company also launched a host of web sites in a bid to bolster its online presence. The most ambitious web site was Manufacturing Marketplace, which contained content culled from 26 titles. In all, the company launched 14 new properties in 1997 and 1998, giving it an approximate total of 130 magazine titles, 140 web sites, and hundreds of directories and newsletters.
Cahners’ purpose is to provide essential business information to our markets. We deliver this information in the form that is most effective for business people to use in making business decisions. The quality and timeliness of this information allow us to forge strong relationships with readers and users. These relationships make us a powerful marketing partner with our advertisers. Balancing short-term profits with longer-term shareholder value, we are committed to growing our business. We strive to establish values, practices and policies that make us the preferred employer in our industry. We strive to create a business environment that allows us to offer unparalleled service to our customers.
Cahners Business entered the last year of the decade as a company generating nearly $1 billion in annual revenue. By all measures, the company ranked as an industry giant, but the 1990s ended on a sour note primarily because of problems stemming from the acquisition of Chilton. Critics claimed Cahners Business had paid too much for the publisher. Other industry experts noted that Barnet had failed to integrate Chilton Publications’ operations into Cahners Business. Some observers pointed to the uneasy relationship between the English and Dutch halves of Reed Elsevier as one cause for Cahners Business’ anemic financial performance. Tension between the two sides had existed, according to numerous reports, since the joint-venture company was created in 1993, which, the pundits claimed, disabled Barnet’s efforts to effectively manage Cahners Business.
Whatever the cause, there was little doubt as to the existence of a problem. Sales had flattened, leading to a 45 percent decline in operating profit during the first half of 1999 compared to the same period in 1998. In September 1999, Barnet resigned, leaving after a five-week period in which 400 jobs were eliminated. According to the business press, it was unclear whether Barnet was forced to resign or the decision was his; Reed Elsevier offered little public explanation. In a brief statement to the press, Reed Elsevier said Barnet left “to pursue other investment and business opportunities.” As part of the layoffs, 100 jobs were eliminated at the company’s Radnor office, the home of Chilton Publications. Another 100 employees were asked to transfer to other locations, as the company relocated the production of 11 magazines, moving them from Radnor to offices across the country. Several titles were sold as well, including agreements to sell Review of Optometry, Review of Ophthalmology, and Eyewear in August 1999, and Energy User News the following month.
In the wake of Barnet’s departure, Bruce Nairn, who had recently been appointed chief operating officer, took over as acting chief executive officer. A search was begun for a new, permanent chief executive officer, ending in January 2000 when Cahners Business announced it had hired Marc Teren. Before joining Cahners Business, Teren worked at Walt Disney Company, where he had general management responsibilities for Disney Interactive. After leaving the Disney organization, Teren served as chief executive officer of washingtonpost newsweek.com, the new media arm of the Washington Post Co. His experience earned him the reputation of an Internet savvy executive, a talent that was sorely needed at Cahners Business. The company had been slow to embrace the Internet, according to some observers, and the selection of Teren suggested the realization of such a shortcoming.
With Teren at the helm, an era that officially began in February 2000, Cahners Business adopted a more focused, Internet-oriented approach to publishing. Two acquisitions early in Teren’s tenure signaled the company’s new strategy. The smaller of the two acquisitions was completed in June 2000, when Cahners Business purchased an application service provider and web site design firm named eLogic Corp. for $79 million. In March 2000, one month after Teren joined Cahners Business, the company purchased $126-million-in-sales, Atlanta, Georgia-based CMD Group for approximately $300 million. A publishing and data business, CMD Group provided project, product, and cost data to the construction industry in North America, Australia, and Scandinavia. The company published more than 100 regional editions of construction market data, as well as a directory of more than 20,000 architectural firms called ProFile, which published in print and on the Internet.
The addition of eLogic and CMD Group, among other acquisitions, strengthened Cahners Business’ presence as an Internet company. Divestitures completed during the same period sharpened the company’s strategic focus. Teren reorganized the company into three units of specialization, each with its own president who was responsible for roughly $300 million worth of business. The three areas of focus were manufacturing/electronics, media, and construction/retail. As part of this reorganization, certain divestitures were made, shedding the company of businesses that did not fit into the new structure. In January 2001, a group of food and industrial publications was sold, followed by two groups of automotive titles in March 2001.
As Teren guided Cahners Business into the first decade of the 21st century, he focused on the company’s core brands and their relation to the Internet. In an interview with ADWEEK Eastern Edition on May 7, 2001, Teren said: “The most important thing that was happening on the Internet was not about the revenue but the perception that on the Internet, with that distribution vehicle, someone else’s brand position was more relevant to readers and advertisers than the trusted brands that we owned. It was the usurping of that position that accelerated all our investment levels.” Looking ahead, further acquisitions were expected, as Teren strove to make Cahners Business the number one or number two publisher in each of its markets.
A.F. Lewis and Company Inc.; Cahners New Product Information; Daily Variety Ltd.; TRACOM Corp.
- Chilton Publications is formed.
- Predecessor to Reed Travel Group is formed when Elwood Ingledue launches the Hotel Informant.
- Cahners Publications launches its first magazine.
- Reed International completes acquisition of Cahners Publications.
- Rupert Murdoch sells a group of travel magazines to Reed International, forming Reed Travel Group.
- Reed Elsevier plc is formed.
- Cahners Publications acquires Chilton Publications.
- Cahners Business Information, comprising Cahners Publications, Chilton Publications, and Reed Travel Group, is formed.
- Marc Teren is appointed chief executive officer of Cahners Business.
PRIMEDIA, Inc.; VNU USA Inc.; Advance Publications, Inc.; Crain Communication Inc.
Adams, Mark, “The Big 3,” ADWEEK Eastern Edition, May 7, 2001, p. SR8.
Bishop, Todd, “Cahners in Midst of Companywide Reorder,” Philadelphia Business Journal, August 27, 1999, p. 4.
“Cahners to Acquire CMD Group for $299.5 Million,” Business Publisher, March 31, 2000, p. 1.
Callahan, Sean, “Cahners CEO Exits Company Amid Restructuring,” Business Marketing, October 1, 1999, p. 4.
Freeman, Laurie, “Reed Elsevier Reinstates Cahners Name, Publisher Sees Strength in Original Brand After Weighing Alternatives,” Business Marketing, March 1998, p. 3.
Harvey, Mary, “Why Marc Teren Matters,” Folio: The Magazine for Magazine Management, September 2000, p. 32.
Holliday, Heather, “Cahners Cuts Another 101 Jobs,” Folio: The Magazine for Magazine Management, October 1999, p. 22.
Kostelni, Natalie, “Chilton Deal Near,” Philadelphia Business Journal, January 21, 2000, p. 8.
Russell, Anne M., “Cahners: The Fast-Moving Company,” Folio: The Magazine for Magazine Management, December 1998, p. 32.
—Jeffrey L. Covell
Cahners Business Information
CAHNERS BUSINESS INFORMATION
Cahners Business Information published more than 150 magazines and 140 Web sites. It emerged as the world's leading provider of business-to-business information in the late 1990s with a subscriber base of more than 7 million. Having evolved from a consumer magazine publisher to a leading business-to-business publisher, Cahners's new focus was on operating online portals including e-INSITE, Variety.com, Buildingteam.com, and Manufacturing Marketplace. Its divisions, Cahners In-Stat Group and Cahners Research, also offered specialized directories, databases, business lists, market research, newsletters, conferences, and seminars.
The creation of Cahners Business Information stemmed from a series of acquisitions made by Reed Elsevier Inc. Founded in the late 1940s by Norman Cahners, the company began as a single magazine and grew into a business-to-business publishing and trade show company by the 1960s. Reed International purchased the firm in 1976, and Cahners grew steadily under its parent by acquiring the bibliographic directories of R.R. Bowker and many medical and consumer magazines. The firm also operated the Reed trade show division.
One of Reed's key purchases, The Travel Group, was established in the mid-1960s by Ziff Davis and included the operations of the Hotel & Travel Index, a guide used by travel agents across the globe. Reed International bought the group in 1989 from Rupert Murdoch and formed the Reed Travel Group. In 1993, Reed International merged with the Dutch publishing firm Elsevier, forming publishing giant Reed Elsevier. Two years later, Cahners sold its consumer magazines to focus on its operations in the business, professional, and medical markets.
In 1997, Reed Elsevier purchased the Chilton Business Group from ABC Inc. Chilton, whose early history dated back to 1904, was operating as a large business-to-business publisher with three major divisions including US Trade Magazines, Professional Exposition Management Co. (PEMCO), and Chilton Research Services. The acquisition was the final link in Reed's plan to create the largest business-to-business publisher in the world. In 1998, Reed formed Cahners Business Information, which included Cahners Publishing Co., Chilton Business Group, and Reed Travel Group.
Shortly after the formation of the new firm, Cahners's management began divesting certain magazine interests and started focusing on beefing up its operations in the electronic marketplace. In late 1998, Cahners formed a partnership with Microsoft's online travel service, Expedia.com, to create the largest Internet-based hotel database. Early the next year, the company continued to restructure operations as part of its Internet strategy. Supermarketworld.com was launched as Cahners's first Web-only magazine. It offered news and information on the retail grocery industry. By this time, the firm had established such Web sites as the Manufacturing Marketplace, a leading business-to-business Internet site for manufacturing and engineering professionals; e-inSITE, an Internet resource for the electronic original manufacture market; and Buildingteam.com, an Internet resource catering to the design and construction industry. Cahners also partnered with PartMiner, a company that would provide the technology needed to make online purchases on the e-inSITE Web site.
Cahners's transition from a traditional publishing firm to a technologically advanced business-to-business unit was not necessarily a smooth ride. The company, while divesting operations not related to its core industries, was forced to cut jobs by nearly 500 in 1999 alone. Operating profits also declined by 40 percent that year. In February 2000, Marc Teren took over as CEO of Cahners after Bruce Barnet's sudden resignation. Under new leadership, the firm bounced back and focused its Internet strategy primarily on creating vertical portals (Web sites that provided Web content), information, and purchasing capabilities for the electronics, manufacturing, construction, and publishing industries. As part of this strategy, the firm acquired the construction information firm CMD Group. Cahners also partnered with u.Bid.com to launch a live auction site for construction equipment, and also teamed up with Aspect Development Inc., a company that would enable its Manufacturing Marketplace site to handle purchasing transactions. In June 2000, Cahners announced plans to acquire eLogic Corp., a Web developer and application service provider. Management planned to utilize the firm's expertise to construct and maintain its Web sites.
Cahners continued to focus on expanding its business-to-business outreach and created an Internet division, Cahners Digital, to oversee its growth in the Internet arena. According to Teren, creating the division would increase the firm's speed to market and expand its impact in these markets. Through its development of vertical portals and its increased presence on the Web, Cahners had secured a leading position among business-to-business information providers. The company had made a significant impact in the electronic media industry in just two short years—more than 67 percent of U.S. managerial and professional laborers utilized Cahners's information services.
"A Brief History of Cahners Business Information." New York: Cahners Business Information, 2001. Available from www.cahners.com.
Callahan, Sean. "Cahners's CEO Exits Company Amid Restructuring." B to B. October 1, 1999.
Callahan, Sean. "Cahners Rethinks Web Plans." B to B. March 27, 2000.
——. "Cahners Revs Up Net Operations." B to B. April 10, 2000.
——. "Deals Pump Up Cahners's Internet Presence." B to B. June 19, 2000.
Russell, Anne M. "Cahners: The Fast-Moving Company." Folio. December, 1998.
SEE ALSO: Auction Sites; Business-to-Business (B2B) E-Commerce; Electronic Publishing