Jupitermedia Corporation Business Information, Profile, and History

Company Perspectives:

Jupitermedia Corporation, headquartered in Darien, CT, is a leading g lobal provider of images, original information, and research for info rmation technology, business and creative professionals.

History of Jupitermedia Corporation

One of the first companies devoted to the Internet, Darien, Connectic ut-based Jupitermedia Corporation is one of the few to survive the do t-com meltdown, due in large measure to the willingness of Alan M. Me ckler, the company's founder, chief executive, and chairman, to adapt to changing conditions. Jupitermedia's business is organized within three divisions. Jupiterimages offers a wealth of stock graphics, pho tos, and footage to both industry professionals and general consumers , either by subscription basis or as a single image download. The uni t also produces two print magazines for design professionals: Dyna mic Graphics Magazine and STEP Inside Design Magazine. Jup iterWeb operates four online networks for Information Technology prof essionals: Internet.com, which offers 12 content channels; EarthWeb.c om, offering content for six different professional audiences (includ ing IT managers, software developers, and Web developers); DevX.com, providing software development information for international professi onals; and Graphics.com, a network devoted to creative professionals, offering news, tutorials, a forum where professionals can communicat e, and a gallery where work can be displayed. The third division is J upiterresearch, providing research, analysis, and consulting services to help businesses get the most out of the Internet and other emergi ng consumer technologies. Jupitermedia is a public company listed on the NASDAQ. Meckler owns a 37 percent stake.

Meckler Becoming Involved in Publishing in the Early 1970s

Alan Marshall Meckler was born in Queens, New York, in 1945. Despite suffering from dyslexia, a condition not diagnosed until he was well into his 50s, he earned three degrees in American history from Columb ia University. He was able to turn his disability into an advantage: Learning how to listen closely rather than taking notes in class prov ided him with the skill of focusing on what was important and avoidin g getting sidetracked. It was a skill that would become key to his bu siness career, as Meckler was quick to identify business trends well ahead of the competition. One of those trends was the rise of the Int ernet. After completing his education, Meckler became involved in the publishing field. In 1971 he founded his own company, Microform Revi ew, Inc. in Weston, Connecticut, which subsequently became part of a larger concern, MecklerMedia Corporation. He also found time to autho r several books on American history as well as other subjects, such a s The Complete Guide to Winning Lotteries by Mail.

In 1990 Meckler was quick to realize the potential of the Internet, w ell before the graphic interface made it easy to navigate and only th e heartiest of souls were willing to learn the arcane programming lan guage necessary to "telnet" and "ftp their way through cyberspac e. Meckler believed the Internet was an ideal way to deliver computer -related content to librarians, information end-users, and specialist s. His first notion was to create an electronic storefront of technol ogy publishing resources, including books, magazines, and newsletters , the first step in establishing a complete electronic publishing div ision.

Meckler started out in October 1990 with the launch of Internet Wo rld newsletter, and he soon enjoyed solid success organizing Inte rnet World trade shows, but in the first couple of years he struggled to make money. In 1992 and 1993 he was on the verge of corporate as well as personal bankruptcy, but he managed to hang on through a loan from Union Trust and by selling a third of his company for $1.25 million.

In February 1994 Meckler was able to take MecklerMedia public, raisin g nearly $5 million. His first Internet acquisition, the first of dozens over the next few years, was the $50,000 purchase of The List, a directory of Internet service providers (ISPs). He then attem pted to launch MecklerWeb, which he envisioned as a "knowledge exchan ge," targeting a wide swath of companies and organizations, including think tanks, finance firms, and entertainment companies, which were to pay $25,000 to $50,000 each for a slot on the site. The go al was to attract an upscale online audience to which participants co uld market. However, only one customer, Anderson Consulting, was will ing to pay a $25,000 fee to participate, prompting Meckler to kil l the idea. He then sought to impose a more traditional publishing mo del on MecklerWeb supported by advertising. The content of three Meck lerMedia magazines, CD-ROM World, Internet World, and Virtu al Reality World, were put online, with the hope that other speci alized publications would be recruited to participate in the future. In November 1994 Meckler sold CD-ROM World, and a month later reorganized MecklerMedia, packaging mecklerweb.com and another site, iworld.com, into a separate division, Internet.com.

Internet World also was revamped and began to shift away from a technical audience to a more mainstream one, as user-friendly web b rowsers including Netscape became available. The publication alerted readers to interesting new web sites, maintained its own home page, a nd sponsored the hottest trade show in the industry. Other Meckler pr int publications also focused on the tech sector, such as the quarter lies Web Developer and Web Week, an Internet trade pape r of record.

As forward-thinking and ambitious as Meckler was, however, he lacked the financial resources of much larger media companies. In November 1 998 Meckler sold MecklerMedia Corporation to Penton Media, Inc. for & #36;274 million, pocketing a 1,000 percent return on his investment. As part of the deal, Penton immediately sold Meckler an 80.1 percent interest in Internet.com L.L.C., a subsidiary created by Penton to ho use MecklerMedia's Internet assets. As a result, Meckler was fully co mmitted to the Internet and had the money he needed to become more co mpetitive.

Internet.com Going Public in 1991

In April 1999 Meckler incorporated Internet.com Corp. in Delaware and two months later took the company public at $14 a share in an in itial public offering of stock underwritten by U.S. Bancorp, Piper Ja ffray Inc., William Blair & Co., and DLCdirect Inc. Internet.com netted $42.8 million. Almost $5 million of the money was used to pay down debt and the rest was earmarked for strategic acquisitio ns. In addition to using Internet.com to acquire web sites and other online assets, Meckler used it to launch venture capital funds to inv est in early-stage content-based web site businesses that focused on business-to-business markets and did not compete directly with Intern et.com. The company also launched a pair of complementary web sites, InternetVCLinx.com and InternetVCWatch.com, to provide information on venture capitalists and track investments in Internet companies.

The close of the 1990s and start of the new century were heady days f or Meckler and Internet.com. It operated a network of advertisement-s upported web sites, e-mail newsletters, online discussion forums, and began hosting a number of face-to-face forums. (In keeping with the sale to Penton, Meckler was prohibited from entering the trade show b usiness for two years.) In December 1999 Internet.com opened news bur eaus in Boston and Washington, D.C., to provide local coverage on ind ustry news and Internet investments. Although the company was posting net losses, sales were growing as Meckler proved adept at converting his content and web sites into a number of diversified revenue strea ms, such as syndication, licensing, and e-commerce partnerships. The price of Internet.com also grew at a strong clip, eventually topping $70. About $6 million of that stock would be put to use in Se ptember 2000 when Meckler completed his largest acquisition since 199 4: the $16 million purchase of ClickZ Corp., which through its Cl ickZ.com web site provided online marketing industry analysis.

The dot-com bubble soon burst, and although Internet.com was better e stablished than the vast majority of Internet ventures and boasted ac tual revenues, more than $52 million in 2000, and was at its hear t a publishing company, it was punished along with the rest of the pl ayers in the sector. In February 2001, as ad revenues tailed off, the company was forced to lay off about 15 percent of its 400 employees. (About two years later that number would be reduced to 260.) "We hav e been the whipping boy because of the name," Meckler told the Wal l Street Journal, which also interviewed Edward Saenz, founder of naming consultant Gravity Branding, who commented, "Anything today t hat says Internet only or dot-com only has warning and hazard signs a ll over it." He added that a name including both, like Internet.com, suffered "a double whammy." It was not surprising, therefore, that Me ckler changed the name of the company to INT Media Group Inc. in May 2001.

Adopting the Jupitermedia Name in 2002

Despite the name change the price of the company's stock continued to slide until bottoming out at $1.50 in September 2002. By this ti me the company had changed its name once again, the result of an acqu isition. A month earlier Internet.com paid $250,000 for the Jupit er Research and Events business of New York City-based Jupiter Media Metrix Inc., which had been selling off its assets in recent months a fter failing to negotiate a merger with competitor Nielsen/NetRatings . Jupiter Research had been in business since 1986 as an internationa l research organization that was now a widely respected research firm specializing in Internet-related market research in a number of busi ness areas. Not only did the acquisition mark Meckler's return to the trade show business, it also provided him with a brand name to explo it. In September 2002, INT Media Group, a name Meckler dismissed as " not memorable," became Jupitermedia Corporation.

Meckler was quick to build on Jupiter Research's trade show business, which was launched at the end of 2001 and quickly spread from the Un ited States to Germany and Australia. Recast as Jupitermedia's 802.11 Planet trade shows, they were geared toward the promotion of the Wi- Fi revolution for Internet access service providers. Meckler told the Hartford Courant, "This thing is a real horse; Kentucky Derby material, Triple Crown material." He also decided to launch a comput er industry trade show to challenge the one conducted by Comdex. At t he same time, Meckler was not neglecting his other Internet interests . In June 2003, Jupitermedia acquired ArtToday.com, a subscription se rvice for photographs and commercial art, paying $13 million in c ash plus stock and other considerations. Two weeks later, Jupitermedi a acquired the assets of DevX.com for $2.25 million and 200,000 s hares of stock. DevX operated a network of web sites serving the inte rnational software community by focusing on software development issu es concerning specific products and areas, such as Windows programs, Web development, Java, XML, .NET, c/c++, Visual Basic, wireless appli cations, and database applications. Clients included corporate giants such as Microsoft, IBM, Intel, and Nokia.

Sales grew to $71.9 million in 2004 and Jupitermedia also turned a profit of $15.7 million. Meckler was not about to become compla cent, however, forever adjusting Jupitermedia's business mix to take advantage of opportunities in the marketplace. He became particularly aggressive in the stock photo and image field. In February 2005 Jupi termedia paid $64.4 million in cash and stock to acquire Creatas L.L.C., which owned Dynamic Graphics Inc. and PictureQuest Acquisitio n Group. Then, in July, Jupitermedia bought PictureArts Corp. for app roximately $63.2 million in cash. Meckler was clearly enamored wi th the potential of this line of business. All told, Jupitermedia spe nt $200 million in acquiring seven online photography companies s ince 2003, and they were a large reason for Jupitermedia becoming pro fitable. Trade shows, on the other hand, provided lackluster growth, with revenues in 2004 just short of $10 million and a net profit of $1.4 million. In August 2005 Jupitermedia sold its Search Engi ne Strategies (SES) trade shows, SearchEngineWatch.com web site, and ClickZ.com network of web sites to London-based Incisive Medias for & #36;43 million in cash, with the money earmarked to pay down the debt incurred from the recent acquisitions. SES was the only Jupitermedia trade show brand to show much promise, and Meckler was eager to sell the business while it was hot. "This sale is evidence of our intent to be even more aggressive in the licensing and distribution of comme rcial images," Meckler explained in a press statement. "The Funds rec eived from the sale will strengthen our balance sheet and allow us to have greater buying power for more image acquisitions." Meckler, as reported by Tradeshow Week, told analysts during an earnings c all, "Essentially, with the sale of SES, for all intents and purposes , we are out of the tradeshow business." He was quick to add, "We'll keep our options open, since we have shown great skill in coming up w ith tradeshow ideas over the years." Given Meckler's track record for ferreting out new opportunities, there was no way to predict in what direction he would take Jupitermedia in the future.

Principal Subsidiaries: Jupiterimages Corporation; Creatas, L. L.C.; Dynamic Graphics, Inc.; PictureQuest Acquisition Company, L.L.C .

Principal Competitors: CNET Networks, Inc.; International Data Group, Inc.; Ziff Davis Media Inc.

Chronology

• Key Dates:
• 1990: MecklerMedia launches the first Internet-related publica tion.
• 1994: MecklerMedia establishes the Internet.com division.
• 1998: MecklerMedia is sold, and its Internet assets are spun o ff into Internet.com Corp.
• 1999: The company is taken public.
• 2001: The name is changed to INT Media Group Inc.
• 2002: The name is changed to Jupitermedia Corporation.