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Thursday, January 12, 2006

MediaLive: RIP 

MediaLive unit sold to N.Y. company for $65M

Tracing the arc of the fall of Comdex--from a trade show founded by Sheldon Adelson that attracted 200,000 attendees at its peak, to a sale to Softbank and a merger with Softbank's Ziff-Davis properties (another mighty fall), to a series of a missteps and cancellations under the MediaLive brand--is a painful exercise. A lot of money was made (by Adelson, and Forstmann Little), and a lot of money was lost (by Masayoshi Son and countless staffers who lost their jobs), and great brands were destroyed in the process.

I commented on Comex, and some other media brands that went by the wayside, last year. I continue to believe that media brands cannot be corporatized: that they always come down to the human element. And without a visionary like Adelson, Comdex was doomed from the moment he sold it.

Now that MediaLive has been snapped up by CMP, maybe there's some hope. It would be great to see Comdex back on the scene, in some shape or form. But CMP should think long and hard about the "who" question. Who's going to run the MediaLive properties? Who will be the face of Comdex, and related properties? Who will take the passionate lead in the marketplace?

It's not that people aren't replaceable. But the reason why so many b2b M&A deals have gone south is completely people-related. You can't spreadsheet yourself into synergy and market position. You can't cost-cut your way to successfully meeting and anticipating the needs of your customers.

Hanley-Wood stands as a shining example of the value of people--it's been at the heart of two big M&A deals (VS&A's original acquisition and then its sale to JP Morgan. In a few years, it will be sold again, very successfully. That's because the Hanley-Wood team is stellar, and there's longevity and corporate memory embedded throughout the organization. Its brands are run by publishers and editors who live their markets (that's why they're brands in the first place). Its CEO used to edit its biggest publication. And none of its buyers have messed with this winning formula.

Other M&A deals have cratered because the people who built the value in the company left, and weren't effectively replaced. You know the ones I'm thinking about.

As I read back over this post, I realize that I'm oversimplifying--there are a lot of other factors that go into the success of a media company, including market conditions and sometimes, just sheer dumb luck (or bad luck). But I'll gladly defend this oversimplification: people matter, far more than many investment bankers, PE firms and some senior media executives realize.

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