WebMediaBrands Downsizes Post-Jupiterimages Sale; Lays Off 60
This story was written by Staci D. Kramer.
WebMediaBrands (NSDQ: WEBM), formerly known as JupiterMedia, is laying off about 60 staffers as it consolidates following the recent sale of Jupiterimages. The $96 million sale to Getty Images (NYSE: GYI) started the process last month, slicing off some 400-plus staffers from a pre-sale total of 630. Chairman and CEO Alan Mecker tells me the new total is around 155. Looking at it another way, he now runs a company with three offices in the U.S. versus one with 28 offices in eight countries. (That will change a bit soon when WMB sets up a small sales and editorial office in Singapore but nothing as complex as the images business that came close to swallowing the company.)
Instead, WebMediaBrands focuses on three segments with three core websites: Internet.com for the tech community, Mediabistro.com for the media community and Graphics.com for the design and graphics community. The three combined had 21 million uniques in February, according to Meckler. While the tough economy is a factor in the layoffs, Meckler says it's more about integration: "What happened while we were primarily an image company was the integration of these three never took place." That left in place multiple sales teams, event teams, and job board teams, plus duplicate administration. Now, he says, "we essentially voted to go with the Mediabistro team and it's taking on a wider role in the company." Some of the staffers from those other teams are moving to Mediabistro, while others have been laid off. Then-JupiterMedia acquired Mediabistro in 2007 for about $23 million.
Are more layoffs coming? Meckler's answer after the jump
Meckler told his staff he can't make any guarantees about future cuts but he hopes this is enough to tide the company over: "I can't control the economy, however, we're now pretty lean and mean and we have a lot of great businesses."
Not interested in going private: Meanwhile, Meckler is buying up blocks of stock, recently acquiring 1.3 million shares for nearly $600,000. He owns 40 percent of WEBM. With the stock trading in the range of 40 cents a share, why not just go private? Meckler admits: "Arguably, I could make a case." And, he says, "I probably personally have the wherewithal." He also sees some of the advantages to being private, including the lower costs of not being regulated as a public company. But he's not interested. The regulation costs will go down anyway because the requirements are fewer for the smaller companyand the costs of going private can be high in terms of money and energy. "I don't mind having public stockholders. What I don't want is a private-equity firm as a partner."
Instead, he's betting the company will be worth more than it's trading at now: "Down the road, I obviously feel I can get better than 45 cents."
By Staci D. Kramer