Monday, February 19, 2007


XRX Buyback, Publishers Step on Agency Turf, Newspapers Sue Google, Non-Print Revenues Ain't So New, Don't Feel Sorry for MSFT

I said it for Heidelberg, and now I'll say it for Xerox: stock buybacks are a bad idea. If you have that much cash that you can't figure out what to do with, give it directly to the stockholders. Buybacks are too often a sign that a company no longer has a clue where to invest its cash. Keeping your powder dry for for future opportunities is also a good idea: one never knows when some opportunity may come your way, and it would be nice to fund things from your own cash. This is disappointing. Doesn't Xerox still have debt to pay down? Sure they do, $7.7 billion woth. Is there no further restructuring that needs to be done? Is there no technology or acquisition that could sweeten the company's current offerings. Right across town in Rochester, Kodak did a buyback a few years ago at $52. I bet they wish they had that money back right now. Instead, the money evaporated as Kodak's fortunes dived, and the stockholders got nothing. I hope Xerox never finds itself in that position. The company has gone through such a marvelous and well-orchestrated turnaround, with some occasional pain, of course, that a special dividend would have had, I believe, a bigger effect on reminding investors about how far Xerox has come. Now, stockholders should legitimately wonder if the company will do things like this to inflate their earnings per share. The goal should be to create more stockholder wealth through their newly retuned operations. I hope that this is a sign that Xerox' big financial rebound is now over and that management has no more major initiatives to build EPS organically. Ann Mulcahy (more powerful than "The Oprah") resisted the advice to declare bankruptcy a few years ago after the company manipulated the structure of its debt to inflate its earnings and stock price. It would be a shame if this buyback started with pressure from institutional shareholders who did not have the company's, employees, or individual shareholder's interests at heart.
(Disclosure: I do not own any Xerox stock, but owned shares a few years ago in a retirement account.)

Magazine publishers are getting into traditional ad agency turf as Meredith acquires some agencies. Part of this is funny because ad agencies started when publishers were not able to assist advertisers in creating ads, more than 100 years ago. Finally, the publishers wised up! Seriously, it is common for small, especially local, magazines and non-daily newspapers to work on ad campaigns for their smaller customers. This takes that trend to a higher level.
Meredith Corp.'s acquisition last month of two marketing communications agencies is the latest sign that publishers are offering more integrated marketing services to clients as well as building out divisions that can help them diversify to create new revenue opportunities.Last month, Meredith announced the acquisition of Genex, an interactive marketing agency, and New Media Strategies, an interactive word-of-mouth marketing company. Financial terms of the deals were not disclosed.The acquisitions follow the media company's purchase last year of O'Grady Meyers, an interactive marketing services firm, and will strengthen its Meredith Integrated Marketing division, which provides custom publishing and online communications services to clients... Other b-to-b publishers, including Hanley Wood and Meister Media, have created marketing services divisions through acquisitions, offering services such as Web site design, custom publishing, creative development and public relations.

There's a disagreement over the new NAA campaign to promote newspapers.
But perhaps he should look at the latest data about visits to newspaper web sites
The press release about the campaign is at
The research about consumer media use behind campaign is at

Arthur Sulzberger, Jr. of the NYT took back his remarks about not knowing if the NYT would be in print in five years.
He had it right the first time. Then somebody reminded him they own paper mills, that probably dropped in value to a potential buyer just minutes after he said that.

Some Belgian newspapers have successfully sued Google for copyright infringement because... Google links to their stories! How dumb! I'd be thankful for the hits and that people can actually find my newspaper. So very strange... and this in an age when a newspaper story gets linked on the Drudge Report that newspapers hate it because their site traffic goes through the roof and can shut down their servers! Wonder if Matt Drudge would ever link to a Belgian paper now :)

2/3 of Internet users surf while watching TV

PIA's report about "navigating print markets" is at
There's still this myth in the industry about "ancillary services." I took the list and identified what each item "used to be" in the "old days" (the 1980s!). This ancillary thing is really a bunch of hogwash. Printers have ALWAYS sold other services, and it always has been some more than others.

Microsoft is saying that forecasts for Vista revenues are too aggressive
Translated: it didn't take off the way they wanted.
In a conference call Thursday with financial analysts Ballmer said lower selling prices, limited new corporate sales, and software piracy may combine to temper Vista sales forecasts.
"I'm really excited about how enthusiastic everybody is about Vista," he said. "But people have to understand that some of the revenue forecasts I've seen out there for Windows Vista in fiscal year 2008 are overly aggressive."

Ummmm... gee, he doesn't mention how the new EULA puts people off, or how in order to get the software to run well you have to upgrade RAM or other components, or just the high cost of Vista.
If someone in your family just needs a computer to do small tasks like an occasional letter, e-mails, and general surfing, look for a closeout Windows XP computer. If someone can help them with basic things, Ubuntu would work, too.
But don't feel bad for Microsoft... when people replace their computers, Vista will be pre-loaded.

Thank you for being an excellent source for the print industry.
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