Amid the Carnage, ITworld.com Sees Growth

Folio: The Magazine for Magazine Management, Feb, 2001 by Cindy Gillis

An IDG Web business expects to double revenue this year by relying on e-list rentals, Webcasts and backbone-oriented IT vendors, not pure-play Net companies.

It seems so far away these days--the time when the sky was the limit for every new Internet company, and focused, fully funded, high-profile new Web ventures from magazine companies were viewed as smart and forward-looking but never reckless.

It was in that environment, in February 2000--just after the Super Bowl advertising debacle but before the April collapse of Internet stocks--that IDG launched ITworld.com. With a staff of 90 and support from IDG powerhouse print titles Info World, CIO, Computerworld and Network World, ITWorld was designed to aggressively chase the half-billion-dollar online IT sector.

Then the euphoria ended. The turbulent dot-com economy is awash in red ink. Wall Street has come to its senses. Many Web companies are laying off staff in desperate attempts to stave off failure, or they're simply folding. The new-economy magazines are struggling. The Industry Standard closed its single-topic spin-off, Grok, and Business 2.0 folded Fuse. The traditional IT titles are inconsistent. Eweek's ad revenue dropped to $103,660,795 in 2000, an 11.77 percent decline; Info World earned $96,933,361 in 2000 ad revenue, a 4.71 percent bump; and Information Week climbed to $157,341,014 last year, a 13.74 percent increase.

Says Sheila Graven, spokeswoman for the ad-tracking service Adscope, "If nothing happens to fire up the industry, we're going to see some of these books die."

ITworld CEO Bill Reinstein is undaunted. He predicts ITWorld will generate $15 million to $25 million in revenue during 2001, twice last year's take, with profitability by summer 2002.

ITworld, he points out, relies on IT companies for its revenue, placing it on firmer ground than other dot-com startups. In that respect, it is similar to IDG's other offerings, he says. The formula is still "IT vendor meet IT buyer."

Part of Reinstein's optimism is due to a direct marketing psychology that infuses its approach. The site's business model includes content, Webcasts, free newsletters and an e-mail list available for rent. Here, Reinstein talks about how he's making a dot-com work in a dot-gone environment.

Q: Describe your basic business approach.

A: Our strategy is built around a front-end media model and a back-end direct marketing model. On the media-model side, we have banner advertising, sponsorship and e-mail newsletters. On the backend we have almost 350,000 IT professionals who have given us permission to rent their names and demographics to IT vendors. But the most exciting part of our business is actually Webcasting.

Q: You have 910,000 subscribers to your 42 free newsletters. What kind of data are you capturing?

A: We capture industry, job function, basic contact information. We then do some overlays when they register for various Webcasts. We can cross-check that sort of information.

Q: How, typically, do the Webcasts work?

A: We go out and put under contract an analyst we think is the best person to speak about any given subject. After that there will typically be one or two speakers from the vendors themselves. The last segment allows the audience to ask questions and have those questions answered live. All of our Webcasts are produced live, but then within 24 hours they're available on demand.

Q: What's the cost structure for Webcasts?

A: My job at IDG before starting ITworld was running face-to-face events. Vendors doing a face-to-face road show with us would typically pay between $50,000 to $80,000 per city, and they would do anywhere from eight to 15 city tours. A nationwide tour might range from $400,000 to $600,000. A single Webcast that's going to attract the same number of attendees will cost them between $50,000 and $100,000.

Q: Are you testing anything new right now?

A: Mainly in the broadband area. We're building out a very sizable e-learning library--on demand only, that you can come to anytime you want and have a range of hundreds of video-based programs to bone up on your technology skills. The first phase of it is online now.