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Monday, June 27, 2005

The Dan Quayle of Publishing? 

At McGraw-Hill, an Heir Takes Over and the Company Flourishes

Interesting article in today's NY Times about Terry McGraw and McGraw-Hill. McGraw has done an excellent job of diversifying the M-H portfolio, focusing on data businesses, and not getting caught up in dot.com-itis. And apparently no one thought he could do it.

Hmm. Here's a grab: In the 12 years since Mr. McGraw took over as president and chief executive officer of the McGraw-Hill Companies, the parent of Standard & Poor's, BusinessWeek magazine, trade publications and a leading educational publishing business, the company's stock has risen from $8.20 a share on Aug. 2, 1993, to $44 a share at Friday's close - a 437 percent increase.

Apparently, one of McGraw's great strengths is not listening to analysts:

Grab: "He did not get sucked into the malarkey we tried to push him to," said Lauren Rich Fine, who follows McGraw-Hill for Merrill Lynch. "He has been the least intimidated by the Internet and the most willing to embrace it as an improved customer delivery channel."

And he continues to resist them: Critics also say Mr. McGraw has been indecisive about selling - or building up - McGraw-Hill's broadcasting unit, which owns four television stations.

"They do $120 million in revenues and 40 percent in cash flow," he said. "Everybody should be so lucky to have such a big bag of cash. Why sell them for the sake of some strategic clarity of some analyst?"


An interesting view of a company that, while public, has managed to take the long view. I thought their acquisition of J.D. Power and Associates was brilliant and, if leveraged properly, will add new ways to make money from the data and information strengths of this company.

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