Tech media giant ZIFF DAVIS, publisher of PC Magazine and namesake to ZDNet.com, plans to enter bankruptcy by the end of the week according to an article at NYTimes.com. From the article:
ZIFF DAVIS MEDIA, which was a major player in technology publishing with PC magazine and the now-closed Yahoo Internet Life, has been telling advertisers that it will be forced to enter a prepackaged bankruptcy by the end of this week, according to a major advertiser and two publishing executives who are close to the situation.
Company officials had no comment on the potential bankruptcy, but acknowledged that there would be a financial restructuring by Friday.
The company plans to enter a Chapter 11 proceeding and restructuring because of insufficient cash on hand and an inability to meet its current financial obligations. Despite the bankruptcy, the company believes it will come through in a better business position because it will have more options in terms of financing and operations.
"Over the past nine months, we have shored up our core properties, invested in our developing assets and exited poorly performing business sectors," said Robert F. Callahan, chairman and chief executive, through a spokesman. "We have almost deployed a financial restructuring plan that significantly reduces our debt. We will emerge stronger and more profitable."
The bankruptcy comes on the heels of sweeping cuts to unprofitable publications resulting in the laying off of more than 60% of its employees.
The company recently closed Yahoo Internet Life, a 1.1 million circulation magazine that lost $30 million in its seven years of existence, according to the trade magazine Mediaweek. Ad pages dropped 50 percent in each of the last two years.
Six of the companyis 15 magazines have been shut in the last six months, including Family PC, Expedia Travels, Interactive Week and eShopper The company reduced Smart Business to a newsletter and laid off most of its staff.
ZIFF DAVIS MEDIA is currently owned by Willis Stein & Partners.