Both the Wall Street Journal and Bloomberg report that McGraw-Hill has hired an investment bank to explore selling its flagship magazine.
As a former Business Week reporter, I have a couple opinions on this.
First, it's incredibly short-sighted. Yes, ad revenue at BW was down 30% in the first quarter. Its ad pages were down 34%.
But ad pages dropped 45% at Fortune and 40% at Forbes. There's a recession going on. It won't go on forever. Print ads may never come back completely, which is why publications need to learn to make money in online advertising. There is a future in journalism after the recession retreats.
In the 1990s at at BW retreat, Joe Dionne, then CEO at McGraw-Hill, got up and gave a rather arrogant speech about how journalism was changing in the new online world. As if he knew. He also said that experience showed that most of the reporters in the audience would not survive the transition. It was like radio stars trying to move to TV.
Well, some of us left the business, many have reinvented ourselves. It's McGraw-Hill management that can't seem to make the transition.
I also recall in the 1980s, when another corporation -- American Express, as I recall -- made a hostile bid for McGraw-Hill. BW wrote an editorial against it, saying a publication like BW should only be owned by a publisher. How could we write unbiased stories on financial institutions if we're owned by such an institution ourselves?
That deal did not go through. This one might, as McGraw-Hill looks for short-term gains to feed its stock price. Gotta keep those McGraw family shareholders rich.
But I wonder, will they stick to the ideal of only selling to a publishing company?
