PowerOne Media, formed by the merger of AdOne and PowerAdz in 1999, was poised to be the small papers’ Classified Ventures. Clients practically begged me to get them a deal with the company, eyeing entry into the 800+ small- and medium-sized markets that it served.
But PowerOne Media was beset by tech problems, management problems and tough competition from the likes of Adicio (CareerCast), HarvestInfo, Morris Digital Works and TownNews. It also suffered from the internal conflicts and usual lack of commitment of its owners, which include Advance, Belo, Stephens, E.W. Scripps, Hearst, Journal, Journal Register, Lee Enterprises, Media General, Media News Group and Morris Communications.
What to do? For the newspaper owners, Option A was to reinvest in PowerOne. Option B was to take it to the chop shop, extracting whatever value it could. By last summer, it seemed fairly obvious that Option B was the owners’ route.
When a new CEO was brought last summer, most of the talk was about pumping up the fortunes of CareerSite and CarCast. There was nary a mention of developing a broader strategy for defending the rest of the company’s products.
Certainly, PowerOne telegraphed its intentions. On Feb.15, the company announced it was finally selling off its Zwire portal, national advertising, Adquest and Yellow Pages units to TownNews, the small paper vendor that is 83 percent owned by Lee Enterprises.
For Lee, which has also been an owner of PowerOne, and is now the fourth largest newspaper owner, the deal represents great consolidation. TownNews will now serve 1500 newspapers. Maybe an acquisition of some of Knight Ridder’s titles really is next on Lee’s horizon.
For PowerOne, it means that the owners’ bets – and they aren’t particularly large ones — have been placed on CareerSite and CarCast. The bets don’t have to pay off, but will they?
For starters, there’s not much going on with CarCast. As for CareerSite, it has been the company’s biggest revenue producer. But it isn’t in very good shape. The two largest accounts have cancelled, including Advance, which had been a 50 percent owner of the site before it was bought by PowerOne. Strategically, it is hard to know how CareerSite can recover. It still hasn’t completed a software migration that began two years ago.
CareerSite also hasn’t kept up with the currents of the recruitment business. Nothing in its recruitment strategy is about selling direct recruitment solutions to employers, which is where most of the growth is. The site also hasn’t focused on meta search, a hot area in recruitment being driven by Indeed! Instead, it is all about advertising, and slow growing newspaper advertising at that.
It is hard to criticize PowerOne Media’s owners for taking the chop shop/fire sale approach, rather than throwing good money after bad. But here’s my question: wouldn’t it have been better to have focused on strategy and development all these years, rather than just cashing checks and keeping a placeholder?