Mecklermedia Corporation

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Mecklermedia Corporation

20 Ketchum St.
Westport, Connecticut 06880
U.S.A.
(203) 226-6967
(800) 632-5537
Fax:(203) 454-5840
Web site: http://www.mecklermedia.com

Public Company
Incorporated: 1971
Employees: 182
Sales: $55.19 million (1997)
Stock Exchanges: NASDAQ
Ticker Symbol: MECK

SICs: 7375 Information Retrieval Services; 2721 Trade Journals: Publishing Only; 7389 Trade Show Arrangement

Mecklermedia Corporation is a small but important player in the world of the Internet, with a relatively long history in this young industry. Its business consists of sponsoring trade shows, publishing the weekly Internet World magazine, and operating a commercial Web site. Though some of its ventures have failed to pan out, Mecklermedia, led by founder Alan Meckler, has carved out several areas of dominance in the sometimes chaotic business end of the still-maturing online realm. The company’s continued success is likely, given the necessary support role that it plays, its experience and established presence in the business, and Mecklermedia’s proven ability to roll with the punches.

Early Years: Special Publications for Librarians

Mecklermedia’s origins trace to the founding of Meckler Publishing Corporation by Alan Meckler in 1971. Meckler, who had a Ph.D. in American History, initially set out to publish materials for use by librarians. Taking as his example such successful R.R. Bowker publications as Library Journal, Books in Print, Literary Market Place, and many others, he concentrated on servicing the small niche of the library world that consisted of publications done on microfilm. His first venture, launched in 1972, was Microform Review. It was followed by other publications targeted to the same niche, including Mi-cropublishers’Trade List Annual, Micrographies’Equipment Review, Microform Market Place, and others. Meckler’s philosophy was to publish something only if it was not offered elsewhere, or to compete with an existing publication only if he had a distinctly different angle. Over time the company’s endeavors expanded to include sponsoring small trade shows geared toward librarians, featuring exhibits of micropublishing vendors’products with informational presentations and speakers. The company would charge vendors’fees to exhibit their wares, as well as charging admission to the library professionals who attended. Occasionally Meckler would publish projects not directly related to microforms, such as a biographical dictionary of the governors of the various states from 1789 to 1978. The company also published several specialized scholarly journals, such as the International Journal of Oral History. Meckler himself wrote a book on the history of micropublishing, published by Greenwood Press in 1982.

As the potential applications of computers were becoming apparent in the early 1980s, especially as they related to libraries, Meckler started several publications to cover the emerging technology. Software Review and Videodisc-Videotex, a quarterly launched in 1981, were two of his earliest moves into this area. Still, the company had only 15 employees by the end of 1983, and was not known outside the world of libraries.

The mid-1980s saw the first commercially available CD-ROMs and other optical disc data storage formats. Librarians were immediately interested in the possibilities they offered for storing vast amounts of information in a small space, and for relatively easy, random access to that information. Meckler had already positioned himself in this area with Videodisc-Videotex, and he sponsored his first trade shows on the subject of optical data discs by the mid-1980s. These annual affairs attracted only a few vendors and attendees at first, but showed substantial growth each year they were repeated. Other Meckler publications, with names like Small Computers in Libraries and CD-ROM Librarian, which were started during this era, were also inspired by the emerging technology. Meckler continued to publish its microform journals during this time, but the publisher was always game to try something new to see whether it might catch on, abandoning it if there seemed to be no interest. Quoted by Forbes in 1994, founder Meckler stated, “I never did market research. My mentality was like a baseball hitter. If you can be successful three times out of ten, you’re phenomenal.”

The 1990s: Anticipating the Potential of the Internet

By the late 1980s Meckler Publishing was still a fairly small concern. Its publications, tailored mainly to the limited world of technology-minded librarians, were generally successful, but the company was not hugely profitable. In March 1990 Alan Meckler had a conversation with a college librarian which pointed him in a new direction. Having never before heard of the Internet, Meckler was told that it had the potential to be the greatest information-delivery system known to mankind. The publisher decided to start a newsletter called Research and Education Networking, and offered a trade show on electronic networking and publishing in 1992. Though the two ventures had lost a combined total of $400,000 by the end of that year, this time Meckler decided to stick with and even expand on the concept. In April 1993, Meckler Publishing launched a monthly magazine called CD-ROM World (actually a facelift of CD-ROM Librarian), following soon after with Internet World, another monthly, and Virtual Reality World, a bimonthly magazine. These were no longer publications geared strictly toward the needs of librarians—quite the contrary. All were consumer magazines designed much more for newsstands than the desk of a microform cataloger. Within a year of their launch the two monthlies each had paid circulation of 50,000 issues or more, far higher than any previous Meckler publication.

Continuing its policy of sponsoring trade shows linked thematically to its publications, Mecklermedia soon offered its first consumer trade show, CD-ROM Home and Office World, which debuted in August 1994. Other consumer-focused shows soon followed. The company had for some time been reducing its emphasis on specialized library and scholarly publications, and continued to scale these back until only a handful were left, some being sold and others folded. The last to go was Computers In Libraries, sold in 1995, along with its related trade show.

Alan Meckler had sold a third of Meckler Publishing to James Mulholland, Jr., and his son in 1993 for $1.2 million. Desirous of more cash to pay off debts and to further expand their growing Internet-related business, they decided to take the company public the following year, with an initial public offering of stock on the NASDAQ exchange in February 1994. Despite the fact that Meckler Publishing was cumulatively in debt to the tune of $1.9 million at the time, the offering was a successful one, and the price of the newly christened Mecklermedia Corporation’s stock doubled within a few months.

October 1994: Mecklermedia Goes Online

Shortly after its successful stock offering, Mecklermedia took its greatest gamble to date with the creation of MecklerWeb. This was announced in the summer of 1994 as a sort of “Internet Yellow Pages,” an “on-ramp” for corporations to present online information centers and offer interactive features that could be used by potential customers. There would be a single Internet address, which, when accessed by a user, would enable him or her to find an individual business of the type they desired through a system of categorization. Some information-only features were also planned, allowing users access to data on related topics. The site would be paid for by the participating businesses, who would be charged an annual flat fee of $25,000 for inclusion in MecklerWeb and $50,000 if Mecklermedia had to put the company’s information online. Mecklermedia executive Christopher Locke oversaw the new venture, describing it in Advertising Age as “... a place in cyberspace where commerce can be conducted both legitimately and effectively, kind of like the old village square in medieval times.” An outside firm, Ogilvy and Mather Direct, was retained to design the site’s graphic “look and feel.” The entire venture was a cooperative effort, with several other companies involved in various ways. The most prominent of these, Digital Equipment, had contributed several hundred thousand dollars worth of computer equipment.

Although the announcement of MecklerWeb attracted a fair amount of attention in the business community, only one company had been signed up by launch time of October 1994. Faced with a potential disaster, CEO Meckler within two weeks decided to pull the plug, leaving Mecklermedia’s partners and Christopher Locke shocked and angry. After several heated volleys back and forth in the business press, Locke resigned. Shortly afterwards, however, MecklerWeb was resurrected, albeit in a modified form. The web site was to be more of an information center with paid advertisements, rather than a central location from which other companies’sites could be accessed. Mecklermedia announced it would put Internet World, CD-ROM World, and Virtual Reality World online as content. The fee for an advertisement was $5,000 for 90 days, actually topping the annual cost of a web site placement in the project’s first incarnation by 20 percent. This move was largely seen as an attempt to save face and mollify Digital, which reportedly had an agreement that Mecklermedia would pay it up to several hundred thousand dollars for every quarter that a minimum of 15 new sponsors were not signed up.

Company Perspectives

Since going public in February 1994, Mecklermedia has become the Internet media power for not only the United States, but around the world, in trade shows, in print, and in the Web site area. We have done this without leveraging our balance sheet, without the aid of a powerful ally, and certainly without smoke and mirrors. And while accomplishing this, we have taken on the giants of the trade show and technology magazine industries.

The MecklerWeb launch debacle was partially to blame for the company’s loss of $1.5 million during the first fiscal year after going public. Some of its endeavors were showing promise, however, with Internet World magazine, among the first to cover the territory, growing to 70,000 paid subscriptions by the end of 1994, and attendance at the related Internet World trade show hitting a peak of 11,000, up from 4,000 a year earlier. Mecklermedia continued to try new publications out as well. The year 1995 saw the launch of Web Week, the company’s first weekly, a news-oriented offering aimed at Internet professionals. The company also tested a telephone helpline, offering answers to questions about the Internet 24 hours a day over a fee-charging “1-900” phone number. The company’s successful trade shows were also being exported by this time, either through licensing agreements or in partnership with companies in the host countries. Within the next several years the phenomenal growth of its trade shows would lead to this line of business becoming Mecklermedia’s largest source of revenue.

Streamlining in the Latter Half of the 1990s

Mecklermedia’s business was starting to become more focused as the Internet itself began to become more a part of everyday life for many Americans, and the initial speculation and hype surrounding it began to settle down. Sales of the print versions of Mecklermedia’s Internet magazines peaked, then stagnated after several years. The company had launched Internet Shopper magazine in both print and online versions, but soon found that it was more popular and more appropriate to its subject in its online version, and after several years the print format was discontinued. Mecklermedia also canceled the print version of Internet World and another, more technical magazine it had created, Web Developer. The company retained the name Internet World, however, transferring it to the company’s Web Week publication in early 1998. Mecklermedia’s original consumer-oriented magazine, CD-ROM World, had been sold to another company by this time as well.

Mecklermedia continued to beef up its online presence, purchasing the Internet domain name “Internet.com” for a reported $100,000 in May 1997. The company’s goal was to offer a web site for Internet professionals with daily news updates, extensive reference sources, and links to businesses. This was an extension and evolution of the MecklerWeb concept (which had later been renamed iWORLD), now a much greater success than that initial disastrous outing had been. The company had been acquiring resources in a variety of ways to add to its web site, with popular features such as SearchEngineWatch.com, Netsearcher.com, Web Developer’s Virtual Library, and others added to the site in an ongoing quest to be the largest Internet resource site. The company’s efforts bore fruit, as components of the Internet.com web site were honored by both PC Magazine and HomePC Magazine in annual lists of top sites on the Internet.

Having lost money each of the first two years after going public, Mecklermedia finally showed a profit in the 1997 fiscal year, its gross revenues increasing 80 percent over the total for 1996. The company continued to add services to its web site, and its trade show business also continued to expand. In 1998 Mecklermedia’s Internet World trade shows were scheduled for 23 different countries, including Japan, Canada, Brazil, and Australia. After having started as a publishing company in 1971, its sole remaining paper product was the weekly Internet World.

Mecklermedia Corporation, much changed from its early years as a publisher of special journals and newsletters for librarians, had grown into an important presence in the world of cyberspace. Its Internet World trade shows were the most prominent in the industry, its Internet.com web site of resources for Internet professionals was popular and award-winning, and its weekly Internet World a leading publication of its type. After surviving the early shakedown period of widespread Internet access and growth, the company had settled into a leadership position in its field. It looked certain to remain in that position for some time to come.