[FOSE] Post Co. Sells Technology Magazines And FOSE Show to California Firm - washingtonpost.com (fwd)

[David Lesher]

X-URL: http://www.washingtonpost.com/wp-dyn/content/article/2006/12/08/AR2006120801494_pf.html


Post Co. Sells Technology Magazines And FOSE Show to California Firm

By Frank AhrensWashington Post Staff Writer
Saturday, December 9, 2006; D02

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.