Feedback on Ziff Davis

A few people have followed up on my Ziff Davis article from yesterday since Doc linked to it. Brian Buck argues that many of us who are playing armchair pundit on the apparent impending bankruptcy are missing the point: Ziff Davis had weak fundamentals to begin with, including massive debt loads and questionable judgement toward gifts to insiders (including slashing strike prices for exec stock options by $10 in September 1999).

But I think Brian’s objection about ZD’s health bears out my point. The Business Week article that he points to confirms that even during the boom years, computer magazines were in an ad slump. Ziff Davis is the canary in the coal mine: weakened from heavy debt loads dating back to its LBO, it is now ready to keel over. Is Ziff Davis in bad shape only because of its ad-based revenue model? No. But it hasn’t been able to pull out from under its debt load precisely because its ad revenue stream has been drying up.