Why Marc Teren Matters

Folio: The Magazine for Magazine Management, Sept, 2000 by Mary Harvey

He says advertising, not commerce, will be the growth engine online. He manages the ultimate "scale-niche" b-to-b business. And he exemplifies the new "Internet-DNA" magazine executive. Here, he talks about why Cahners is positioned to dominate.

IN JANUARY 2000, MARC TEREN WAS CEO of Washingtonpost.Newsweek.-Interactive, the $17 million, fast-growth, new-media arm of the Washington Post Co. In February 2000, Teren took over as CEO of Cahners Business Information, the $850 million, slower-growth, old-media arm of Reed Elsevier PLC.

Teren's mission: Turn around a company that had come through a period of turmoil, that had 500 layoffs the prior year, that had never really effectively integrated the 1997 acquisition of Chilton Co. Cahners was a company with dozens of offices around the country and a quarreling Anglo-Dutch parent. And it had gained dangerously little sustainable traction online.

Teren was undeterred. His basic approach is to build a company that dominates its markets in print and online, with revenues that are split substantially between magazines and digital businesses, and includes significant data and research holdings, as well. Teren also foresees an aggressive Internet build-up--one that, surprisingly, will be advertising driven, and backed by the parent company's beefed-up commitment to the online space.

None of this is revolutionary, exactly. What is different is the scale of the company, the position it is coming from, the breadth of Teren's vision and the fact that he is one of two or perhaps three big magazine-company CEOs with "Internet DNA"--with a chance to really come at magazine media from a different perspective.

Two acquisitions in particular signal the new Cahners approach. In June, Cahners bought eLogic Corp., an application service provider and Web design firm for media and Internet companies, for $79 million. This acquisition followed the $299.5 million purchase in March of the CMD Group, a publishing and data business.

Cahners--with its 144 business-to-business magazines serving 16 vertical markets--is likely to remain active in the deal market.

The jury on Teren is still out, but if he succeeds in building a company where the lines between media are blurred, where any given medium is subordinate to the brand, and where revenue comes from an array of sources--then his formula for building a b-to-b publishing company for the New Economy may well become the model by which others are judged.

Here, Teren talks about his first seven months at Cahners, and where the company is headed.

Q: Tell us how the Internet fits into Cahners' overall strategic thinking.

A: There are no areas that are more important in the overall growth and development of our business than the focus on our key market sectors and the focus on the Internet. We intend to develop and deliver vertical market portals in all of the key industry sectors in which we have a market-leading position. We already have a significant portal position in electronics with e-inSITE.net, and in manufacturing with Manufacturing.Net. We'll continue that position in construction, where we now own Buildingteam.com, and in our entertainment, communications and media group, in television and publishing, and we'll be launching focused portals in retail and interior design.

Q: Why focus on creating online portals?

A: Our Internet strategy is a complete mirror of the way we approach our market sectors in our core businesses. We build very deep expertise in every segment of a sector in which we have staked a strategic position, and provide content of a relevancy for decision-making. Take that one step further: Actionable content is the kind of necessary information around which commerce is transacted.

Q: What kind of timetable do you foresee for creating more portals?

A: We will launch all of our vertical portals by the late third quarter or early fourth quarter of this year.

Q: How many portals will Cahners have when this phase is completed?

A: Probably five.

Q: What might make people turn to Cahners first?

A: First off, it's not Cahners--it's the names under which we publish: It's EDN, Broadcast & Cable, Variety. What you have not seen to date is the thoughtful and significant scale marketing commitment to support the kind of b-to-b play we believe we make with our vertical markets. In my prior experience at the Washington Post Co., washingtonpost.com was one of the largest advertisers in The Washington Post. With time, our vertical sites will be much larger advertisers in our core publications. It all starts with advertising. It's about audience aggregation, about delivering a highly targeted audience in focused sectors and professions. The revenue streams on the Internet today start with advertising sponsorship, moving to lead generation and economic fulfillment and, obviously--as with some of our competitors and in some of our relationships--move directly into transactions, either as a direct owner of marketplaces, or, more likely, as a facilitator of marketplaces where we take a cut.