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Wednesday, April 27, 2005

M&A Mania, part two 

The buying and selling craze in B2B

A postscript to yesterday's post on the M&A resurgence in B2B: my friend Paul Conley's blog always keeps a strong focus on the people part of the B2B equation. The old saw that "all our assets leave the office every night" is never truer than when it comes to media. Media is never technology, or distribution, or debtload, or P&Ls, or M&A. It's always people. The people who create content, sell advertising, build circulation, design products.

And people get chewed up in the great cycle of b2b buy, build and sell. They watch the actions of those at the "top" (see Paul's post referencing the drinking habits of some of those).

Sample grab: I'd spent too many boring meetings in Primedia's executive dining room, wasted too many days trying to track down high-ranking bigwigs with drinking problems who frequented the bars near corporate headquarters, and listened to far too many imbeciles tell me their theories on journalism.

B2b people see colleagues laid off, salary cuts, resource cuts. Their morale sinks, and they spend more time trying to lay low and keep their jobs, than do the stellar jobs they're capable of and must do in order to create insanely great media. Who can blame them?

And the business stagnates, and the numbers drop, and good products become mediocre products, and investors sell out, and the process starts all over again.

I believe in profitable b2b media--otherwise, why do it? And if done right, b2b can be incredibly profitable. Not too many industries can deliver 25-50% contribution margins.

But to all the money folks out there, as you wheel and deal the b2b companies currently on the market (and those that are sure to follow): think about the people (the real asset) you're acquiring. Give them decent executives who actually listen to customers and staff. Give them decent financial breathing space. Give them a sense of job security. And then expect excellence. You'll get it.

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