Tag Archives: Barron’s
New Dow Jones CEO Richard Zannino said Wednesday at an investor conference that advertising for the company’s flagship Wall Street Journal newspaper has been up 13 percent in the first two months.
Dwight Ostricher of Dow Jones Newswire reports, “‘We took meaningful market share away from our primary print competitors in 2005 and so far in 2006 are doing the same,’ Zannino said Wednesday at the Bank of America media, telecommunications and entertainment conference here.
“The Journal has seen solid advertising gains in the technology and financial sectors as well as in general business to business, he said, while health-care and pharmaceutical advertising was soft.
“The company, which also publishes this newswire, said in January that ad lineage at the U.S. edition of the Journal should rise by a mid-single-digit percentage in the first quarter.”
Ostricher also later reported, “Zannino said the company would look for merger-and-acquisition opportunities in the enterprise media group, which includes Dow Jones Newswires, Dow Jones Indexes and Dow Jones Licensing Services.
“He added that consumer media, which includes the print and online version of the Journal and Barron’s, as well as the MarketWatch online financial news concern, will benefit from the Weekend Journal turning profitable and the end of losses for international Journal editions. Zannino added that the company will lose a ‘little bit’ of money in Europe and turn a profit in Asia in 2006.”
Read the wire story here.
JupiterMedia CEO Alan Meckler muses online that eventually Google or Yahoo will need to have content on their respective financial information sites if they are to compete for the eyes of those who want that information. He theorizes that eventually that content could come from Dow Jones, parent company of The Wall Street Journal and Barron’s.
Writes Meckler, “In the end, however, the weakness of both Yahoo and Google is content. They both are dependent on sources that they do not own. Someday ownership will matter. Ownership of content makes somebody king. I have witnessed this fact since starting in business in 1971. I have been successful owning content for 36 years, and now see content weaving its magic in the image space as Jupitermedia has moved into a supreme position against much larger image organizations soley because of its content ownership position (and a big help from an incredibly productive and talented team that has been with me for many years).
“Google and Yahoo will slug it out for years to come. But one of them is going to buy significant media assets and content. It will be interesting to see which one makes the first move. Perhaps Dow Jones makes sense?”
Read his entire comment here.
Christine Brendle, the managing director of Wall Street Journal Asia, is not worried that the business newspaper faces increased competition from online finance Web sites such as Yahoo! and Google Finance, launched last week.
In an interview in India, Brendle said, “When people get on Google or Yahoo or when they get on the Net, they need a beacon. They need to have guidance and Dow Jones and its brands like Far Eastern Economic Review, Wall Street Journal, Market Watch, Barron’s they provide immediate information on what content people expect and the trust people have in this content.
“Sometimes online you can get an encyclopaedia that tells you things that are blatantly wrong. It helps to have these brands because they are a guarantor for quality and therefore I am absolutely convinced that they will stay and grow online because they will present the same benefits that are in the print which is a certain guarantee of integrity and quality.”
Read more of the interview here.
The New York Post is reporting Tuesday that a subpoena to research firm Gradient Analytics asked for records of all e-mail and phone contacts Gradient has had with approximately eight financial reporters.
The eight reporters are Marketwatch’s Herb Greenberg, Mad Money host Jim Cramer, Dow Jones Newswire’s Carol Remond, Bethany McLean of Fortune magazine, Jesse Eisinger of the Wall Street Journal, Elizabeth MacDonald of Forbes Magazine, former Barron’s editor Cheryl Strauss Einhorn and Roddy Boyd from The Post, who wrote the article.
Boyd wrote, “An individual familiar with the situation said Gradient planned on seeking the permission of the reporters’ news organizations before complying with the order.”
In February, Greenberg disclosed that he had been subpoenaed by the SEC and criticized the action. Afterward, SEC Chairman Christopher Cox backed off the subpoenas, saying the regulatory agency needed to develop a policy on when it would seek information from financial reporters.
The investigation centers around Gradient and Rocker Partners LP and their alleged attempts at driving down the price of online retailer Overstock.com. The president of Overstock, Patrick Byrne, has been criticizing the actions of reporters for using information from short sellers in their writing.
Former BusinessWeek writer Gary Weiss posts on his site about the latest subpoenas. He writes, “So it stands to reason that, being singularly ineffective at punishing real transgressions, the SEC would do an outstanding job of wasting its time. Thus the current witch hunt against the handful of journalists who engage in tough financial journalism.”
I should have known better. After finding stories about executive compensation at Reuters and McGraw-Hill in the past 24 hours on the Internet, I did a quick search to see if any of the other business journalism-related companies had filed a proxy statement. Dow Jones, the parent of the Wall Street Journal and Barron’s, filed its proxy on Friday afternoon with the SEC.
Except for a short Dow Jones newswire story, the proxy has gone unreported. (I did a Lexis/Nexis search and found nothing. A Google search turned up the Dow Jones brief in the Newark Star-Ledger.)
Shame on the Wall Street Journal and other business media outlets for ignoring this story, particularly since there has been a change at the top of the company announced earlier this year that was widely written about. How quickly we seem to forgot.
So here are the interesting details:
Outgoing CEO Peter Kann’s total compensation (salary, bonus, long-term incentive plan, all other compensation) in 2005 was $2.92 million, up 3.6 percent from his 2004 total compensation of $2.82 million. The biggest increase was in his bonus, which rose 10 percent to $918,500 from $835,000.
Incoming CEO Richard Zannino, who was the executive vice president and COO, saw his total compensation rise 6.6 percent to $2.0 million, from $1.88 million in 2004. His bonus also increased by 10 percent to $638,000. I could not find anything in the compensation committee report that showed what his CEO salary will be. His 2005 salary was $756,653, up about $30,000 from 2004. I would imagine that his CEO salary will be near what Kann was paid.
Zannino also receved 48,100 stock options in 2005 with a value between $1.24 million and $3.15 million.
Wall Street Journal managing editor Paul Steiger received total compensation of just more than $1 million in 2005, up 9.5 percent from the $940,589 he received in 2004. Steiger’s bonus rose $25,000, or 14.3 percent, to $200,000. His base salary was $528,327, up slightly from 2004.
Read the proxy here.
If anyone knows where else this has been reported on Saturday or Monday, please let me know. I’d like to give someone credit for writing this. I’ve done some pretty thorough searches though and came away disappointed that this story has been ignored — except for the Dow Jones wire story that ran on Friday afternoon.
I also bet there are reporters at the Wall Street Journal, Barron’s and at MarketWatch — all Dow Jones subsidiaries — who are extremely interested in these details.
Barry Ritholtz, who is president of a money manager in New York and writes a blog called “The Big Picture,” has an interesting comment today about using the covers of major magazines as indicators of how to invest.
Ritholtz notes that there are 56 covers of major magazines with Apple’s Steve Jobs on the front. Writes Ritholtz, “So the key question for afficianados of the magazine cover indicator is simply this: Which cover was your sell signal?
“The collage above shows why the cover indicator is not really applicable to single companies . . . ”
Ritholtz argues that the magazine cover indicator is more applicable for trends, such as the stock market, or the boom in industries like the Internet or nano-technology. He states, “In my experience, the Cover Indicator is useful for determining when large social phenomena are reaching an emotional crescendo. Oftentimes, emotions take over at the extremes, as things become either giddy or bleak.”
I’ve got to agree with him. Business magazines are notoriously bad when it comes to predicting trends, especially in the stock market. I recently came across a stock chart from Ned Davis Research that superimposed famous magazine covers with the Dow Jones Industrial Average.
To give you a sample of how bad the predictions have been, here are a few examples:
1. BusinessWeek’s Nov. 2, 1968 cover called “The Boom that Just Won’t Stop” came out when the Dow was at 975. By the middle of 1970, the Dow was at 660.
2. The Barron’s dated Jan. 8, 1973 had the headline “1,200 on the Dow” when the index was at 1020. By the end of 1974, the Dow had dropped to below 600.
3. Then there is BusinessWeek’s infamous Aug. 13, 1979 cover called “The Death of Equities,” which came out when the Dow was at about 800. We all know what happened to the Dow in the next two decades.
4. The Fortune magazine dated Oct. 26, 1987 had the headline “Why Greenspan is bullish” and came out just days before the crash that lopped 25 percent off the market in one day.
5. After the crash, U.S. News & World Report’s Nov. 9, 1987 cover was titled “How to Ride out the Bull Market.” The Dow was at 2,000, and would rise to 11,000 in the next 14 years.
6. BusinessWeek’s Dec. 24, 1990 cover title was “The New Face of Recession.” The country was about to enter the longest time period of economic prosperity it has ever seen.
The point here is that the business media have been incredibly bad in predicting the economy and the stock market. There are lots of investors out there who look at covers such as these and do the opposite with their money.
Dow Jones reported strong growth in ad sales at its business publications in February.
Here is an excerpt from the release: “Advertising linage at The Wall Street Journal, including Weekend Edition increased 18.6% in February due to increases in classified, general and financial advertising, partially offset by a decrease in technology advertising. In the classified advertising category at the Journal, February linage increased 31.8% due to an increase in real estate and other classified advertising. The Journal’s general advertising category increased 21.1% due to increases in industrial equipment, auto, insurance and other consumer advertising, partially offset by declines in professional services and pharmaceutical advertising. Linage in the Journal’s financial advertising category increased 12.8% primarily due to gains in tombstone advertising, partially offset by declines in wholesale advertising. The Journal’s technology advertising declined 7.9% due to weak hardware, software and personal computer advertising, partially offset by gains in communications and consumer electronics advertising.
“At Barron’s, total national advertising pages were up 21.9% in February primarily due to gains in general and financial advertising.
“Internationally, The Wall Street Journal Europe’s linage increased 18.8% due to increases in financial, technology and classified advertising, partially offset by a decline in general advertising. The Wall Street Journal Asia’s linage increased 10.8% in February due to increases in financial and classified advertising, partially offset by declines in general and technology advertising.”
Read the full release here.
Howard Gold is leaving Barronâ€™s Online after editing the Internet version of the financial publication for nearly a decade. In his farewell column, Gold revisits six predictions he made in 1998 about the Internet revolutionizing the media landscape, notes The Media Stock Blog.
Here are a couple of them, courtesy of Media Stock Blog, since Barron’s Online requires a subscription.
1. “Within a decade,” I wrote, “the Internet will become the primary means of getting financial information.”
The numbers of people visiting the big personal finance websites â€” roughly 10 million unique users per month each for Yahoo Finance and MSN Money, eight million for AOL Finance, according to Nielsen Net Ratings â€” far eclipse the numbers who get financial information from newspapers, magazines, newsletters and financial television shows.
5. “News is already a commodity online, but original analysis isnâ€™t.”
With so much good information available free, itâ€™s still difficult to get peopleâ€™s attention â€” or their money. But we may be at an inflection point: The 750,000-plus subscribers of the Online Journal, the initial success of the New York Timesâ€™s paid TimesSelect and our own strong debut as a separately paid site (with more than 50,000 subscribers in the first month) may mean people finally are ready to pay for “the original insights and ideas provided by the best sites and news organizations,” as I wrote back then.
Read the rest of the Media Stock Blog’s analysis of his predictions here, including a discussion on the importance of blogs in financial journalism.
Crovitz served since October 1998 as senior vice president of Dow Jones and president of the Electronic Publishing group, where he was responsible for the Companyâ€™s Dow Jones Newswires, Financial Information Services, Dow Jones Indexes and Dow Jones Consumer Electronic Publishing businesses, which included The Wall Street Journal Online, Barronâ€™s Online and MarketWatch. During this time, electronic publishing revenues doubled to more than $500 million, operating income tripled to more than $110 million and the operating margin grew to more than 22% from less than 5%.
I like the fact that the company is keeping with a tradition of placing journalists in the publisher’s role. Crovitz is a former editorial writer for the Journal and a former Loeb Award winner.
An AP article about the changes notes, “The overhaul will combine the print and Web editions of The Wall Street Journal for the first time in a new consumer publishing unit, which will also include the financial news Web site MarketWatch, Barron’s, and SmartMoney magazine, which is a joint venture with Hearst Corp.”
Read about all of the new Dow Jones executives under new CEO Richard Zannino here.
Here is the power — and the weakness — of the financial press: Other media are reporting that weekly newspaper Barron’s critical article about Google is the reason why its stock fell.
The Associated Press wrote: “Shares of Google Inc. fell nearly 5% yesterday after Barron’s warned factors such as heightened competition, ad-pricing pressures and “click fraud” may cut the share price of the Internet search company in half over the next year.
“Barron’s, a financial magazine published by Dow Jones & Co., said the company will have to contend with increased efforts from Microsoft Corp. and Yahoo Inc. — both expected to improve their web portals in the next year — as well as phone and cable companies.”
Competing wire service Bloomberg News led with this: “Shares of Google fell as much as 5.4 percent on Monday after an article in Barron’s said the stock might fall by half in the next year.
“The article heightened concern about the growth of Google, which is based in Mountain View, California. Its profit missed most analysts’ estimates last quarter amid higher spending. Even before Monday, Google had lost almost $21 billion in market value since the earnings report as investors questioned the company’s prospects.”
And the San Jose Mercury News, which is the hometown newspaper for the Internet search engine, wrote, “A negative report in Barron’s — which envisioned a price for Google stock well below $200 — sent the Mountain View Internet search giant’s shares 4.7 percent lower today.
“Google stock closed at $345.70, down $16.91. You might recall that Google hit an all-time high of $475.11 just last month.
“The Barron’s article said Google, which relies heavily on online advertising revenue, is facing increasing competition from its biggest rivals, Sunnyvale Internet content giant Yahoo and Redmond, Wash., still-dominant-Windows-operating-system giant Microsoft.”
Just one thought about all this coverage given to the Barron’s article: If the information contained in the article is so newsworthy, then why didn’t these publications write this story themselves? Why rely on reporting of another media outlet — ostensibly one that some might say you compete with — to convey a critical piece of news that you’re validating by simply writing about?