Interchange to remain with Ziffs? - Ziff Communications Co. has not sold online network - Brief Article

Folio: The Magazine for Magazine Management, Dec 15, 1994

The last piece of the Ziff Communications' sale puzzle--the fledgling Interchange business-to-business online service--is proving to be a trickier fit than the first three parts. The company's magazine, trade show and electronic publishing units all found new homes within a oneweek span earlier this fall, but there is now speculation that Bill Ziff's sons may keep Interchange rather than lower the rumored $150 million asking price.

A number of factors are combining to delay the sale, not the least of which is the emergence of major players such as Microsoft in the commercial online arena. (The Microsoft Network, expected to arrive in April 1995 along with the company's Windows upgrade, promises to change the landscape by offering content providers a bigger cut of connection-time charges and ad revenues than currently available with services such as America Online, Prodigy and CompuServe. Microsoft has already landed a commitment from Time Inc. Ventures and is talking with Conde Nast, Times Mirror and U.S. News & World Report.) The fact that Interchange is so new--it's in beta test now, with a launch scheduled for sometime early next year--also makes it harder to value than the other Ziff properties. The service, notes one source close to the dealings, is at an "awkward adolescent stage," and any buyer is still going to have to invest a fair amount of cash to make a go of it. The Ziff brothers landed $1.4 billion from the sale of Ziff-Davis Publishing to Forstmann Little & Co. in late October; the conferences and trade shows then went to Japan's Softbank Corp. for $202 million; and International Thomson Corp. paid $465 million for Ziff's Information Access Company.