Washington Post Co. Bails Out of B2B

If newspapers are to grow, they’re going to have to leverage their local, regional and national credibility to reach into advertiser segments where they don’t have much of a presence today. This means B2B and SME.

But somewhere, it is written that newspapers can’t do B2B. After flirting with job fair services (BrassRing), and vertical pubs, most newspapers have stopped looking beyond their traditional lines of business. The most they’ll consider are new slices of traditional vertical markets (“Entertainment,” “Home Improvement”)

This week we have a new case study, as The Washington Post Co sold off of its Post-Newsweek Tech Group to 1105 Media in Chatsworth, CA. The division includes FOSE Government Computer News, Washington Technology, Government Leader and Defense Systems. Also included is FOSE, the annual information technology convention.

For a decade or more, the 80-person division had successfully leveraged its parents’ blue chip status in the capital to sell ads and booth space to major contractors like Boeing and Lockheed. Until 2005, the division performed strongly, regularly surpassing earnings estimates by as much as 30 percent.

More recently, however, the division suffered high levels of staff turnover and had execution problems. Worse, the division started to fall off the Jack Welch standard of being #1 or #2 in every marketplace (and Jack Welch and Warren Buffett are the two business thinkers that matter most at The Post Co.).

One longtime Post Co. executive that I talked with said that the move didn’t surprise him at all. Despite all the noise of being ready for the Internet and Web 2.0 etc., “B2B is risk management, and newspapers don’t understand what that is all about,” he said. “B2B publications are started and closed all the time. They don’t have 100 year traditions. Basically, newspapers don’t do product development.”

2 thoughts on “Washington Post Co. Bails Out of B2B

  1. Metro D.C. media veterans will remember Washington Technology’s glory days when it was run by its founder, Esther Smith, who earlier started the Washington Business Journal. Esther, who today is a founding partner of Qorvis Communications, threw a spotlight on the then-nascent but promising technology industry of metro D.C., in the mid-1980s. By the time the WPost acquired Washington Technology, the D.C. technology boom was basically a story of contractors lining up at the federal trough. That made a lot of people rich, but it didn’t produce much entrepreneurial innovation, or interesting stuff to write about. How sexy can you make an article about a local company winning a “contract to configure commercial software solutions for billing and accounts receivable operations within the Defense Department?” Earlier this year, the Wall Street Journal drew up a list of the “Top 20 Inventive Towns,” based on the number of patents registered. Nowhere on the list was Washington or surrounding tech-heavy suburbs. Tthe list included 11 communities in Silicon Valley, which owes its existence to its proximity to Stanford and Berkeley. When the D.C. tech boom was gathering steam, Northern Virginia’s George Mason University set a goal of becoming the “Stanford of the East.” But that required a lot of money, and, beyond financing a handful of high-profile chairs and throwing around some scholarship money, the area’s tech titans kept their wallets in their pockets. Stanford’s endowment today is $15.2 BILLION; GMU’s is $41 MILLION. Now, that might be a good story for Washington Technology to look into.

  2. Pretty funny and VERY accurate. As a long term member of the DC business community and one that serviced some of those companies….its a very unique world and one that doesn’t travel to other regions/markets etc. very well.

    Well said, Tom

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