The Jordan, Edmiston Group, Inc. (JEGI)asked a select group of senior executives fromprivately held media companies for theirthoughts on the following questions:

4 What is your six- and twelve-month out-look for all the important revenue streams ofyour business?

4 What steps have you taken to be betterpositioned in your core markets for 2006 andbeyond?

4 How is search changing your business? (IsGoogle a friend or an enemy?)

4 What keeps you awake at night?

Here are their responses:

Kim Githler, PresidentInterShowwww.intershow.com

InterShow produces live forums and events forindividual investors, including the Money Shows,Trader Expos and Investment Cruises.

InterShow has already attained 90% of its 2005revenue goal. The pace of sales is rising for thebalance of 2005. Pre-sales for 2006 havereached 22% of budget for the year, whichmatches our historical tracking.

InterShow’s core business is to deliver the bestinvestment advice direct from experts in theirfield to its customers at investment tradeshowsand cruises, in a live interactive format. Inorder to be better positioned in our core mar-kets for 2006 and beyond, InterShow will createa new channel of distribution that still providesthe interactive live component of its strategy,but uses the Internet as a live distribution chan-nel to a mostly new, global network of cus-tomers. In essence, this will create a virtualshow online, and these “Webinars” can be spon-sored and distributed in many different ways.

InterShow is also continuing its global productdevelopment by: expanding into the Chinamarket with two events in Shanghai in 2006;producing its 2nd Annual World Money ShowLondon event in October of 2006; and expand-ing several other shows within key markets.

In general, the Internet greatly helps our busi-ness, as InterShow events dominate all distribu-tion channels. We view Google as a “friend”,since we use it to market our company through

pay-per-click ads for most of our investmenteducation areas.

I am kept up at night worrying about unusualand unexpected events that are out of our con-trol. For example, our largest competitor’snational conference is held in New Orleanseach October. The 2005 show has been can-celled for obvious reasons. InterShow doescarry event interruption insurance for blizzardsin New York and earthquakes in San Francisco.However, terrorism insurance is not feasible.

Meanwhile, due to spam filters, the InternetService Providers (ISPs) have blocked, fromtime-to-time, subscription e-mails to our maga-zine, The Money Show Digest, and event noticesto our shows. As such, we are in the process ofhiring a third-party e-mail distribution compa-ny that will track and confirm receipt of e-mailsand help keep legitimate e-commerceunblocked.

Mary Ann Liebert, PresidentMary Ann Liebert, Inc.www.liebertpub.com

Mary Ann Liebert produces peer-reviewed jour-nals in the most promising areas of biotechnology,biomedical research/life sciences, clinical medicineand surgery, and law.

While online subscriptions continue to increasefaster than those for print, we are finding thatprint is by no means dead or dying. What wehave concluded is that these two media are readdifferently. As such, we have no plans to con-vert any print publications to online only, andwe feel strongly that publishers must charge fortheir content, if they expect to stay in business!

To be better positioned in our core marketsgoing forward, we have met with many keyconstituents, so that they fully understand oureconomic model. By doing so, we have foundstrong support for our dedication to the peer-review process, and we more fully understandthat the open access model is not a panacea.

In terms of controlled circulation publications,readers who become accustomed to scanning

(continued on page 4)

Media Companies Provide Positive Growth Outlook and Keen Insights on Search

October 2005

JEGI Annual Private Equity and Lenders Forum

JEGI hosted its annual Private Equity and Lenders Forum on September 21 at the The Four Seasons Restaurant inNew York City. (From left) Scott Peters, Managing Director, JEGI; Tolman Geffs, Managing Director, JEGI; RishadTobaccowala, Chief Innovation Officer, Publicis Groupe Media (Keynote Speaker); Wilma Jordan, Founder & CEO,JEGI; and Charles Engros, Managing Partner, Morgan, Lewis & Bockius (Sponsor).

“We view Google as a "friend",since we use it to market our com-pany through pay-per-click ads…”

2

Acquisitions of interactive companies, whichinclude both online media and interactive mar-keting services, reached $10.6 billion in the firstthree quarters of 2005. The deal flurry markeda 141% gain over the $4.4 billion in transactionvalue in the same period of 2004. The onlinemedia sector accounted for a majority of theM&A activity, with $8.1 billion in transactionvalue. The balance was generated by interactivemarketing services firms.

Expansion of this market, as tracked by theJEGI Transaction Database, has primarily beendriven by the aggressive entryof diversified media and majormarketing services companies,along with private equity play-ers, into the fast-growinginteractive market. These“new” market players, whichmainly comprise veteranmedia acquirers, are nowactively building share ininteractive businesses.

In the first nine months of2004, larger interactive com-panies dominated the market,collectively snapping up $3.2billion, or 74%, of the totalvalue of announced acquisi-tions of interactive companies.This group of buyers wasfocused on acquiring scale andcomplementary services, suchas: the acquisition ofAdvertising.com by AOL; thepurchase of the MyWay set ofproperties by AskJeeves; andDoubleClick’s acquisition ofPerformics.

Broader “Buy-In” to the Interactive Market

For the first three quarters of 2005, theseendemic deals totaled $4.2 billion, an increasein value over the same period in 2004, butaccounted for only 39% of a much larger acqui-sition market. Driving the majority of M&Atransactions in 2005 were major diversifiedmedia companies, major marketing servicesfirms and private equity groups, which com-bined to drive $6.4 billion of acquisitions ofinteractive content and services companies.This represented 61% of total deal volume,more than double their share of the market inthe same period of 2004.

Of these “new” highly active acquirers, diversi-fied media firms led the growth, generatingdeals valued at $3.3 billion, or 32% of market

activity, up from approximately $600 million inthe first nine months of 2004. With tradition-al media models growing slowly and at modestmargins, partially due to pressure from theInternet, these companies are looking to acquirefast-growing Internet-based business models todrive growth. Headline transactions includedthe ongoing News Corp. series of acquisitions,including Scout Media, IGN andIntermix/MySpace (announced but not closed),along with old/new media marriages like theacquisition of About.com by The New YorkTimes Co. and Gannett’s purchase of PointRoll.

B2B online media was active as well, as majorstrategics seek to diversify traditional revenuestreams. Notable transactions include: UnitedBusiness Media’s acquisitions of the LightReading telephony sites and engineeringresource TechOnline; and Incisive Media’sacquisition of Jupitermedia’s ClickZ.comNetwork.

Major marketing services groups were also veryactive, as they raced to buy new interactivecapabilities faster than competitors can shiftcustomer share. Marketing Services groupsmore than doubled their share of M&A activityto 17%, or $1.8 billion of deal value. Experianled the charge by acquiring LowerMyBills,AffiliateFuel, Vente and Harvest Solutions.Other notable transactions in the first threequarters of 2005 included: WPP’s acquisition of

Dynamic Logic; and the purchase of BigFootInteractive by Alliance Data Systems.

Private Equity Firms Increase Activity

Private equity groups have become much moreactive in purchasing online business modelsthat have proven cash flow and scalability.Private Equity tripled its share of the M&Amarket activity for interactive companies from4% in 2004 to 12%, or $1.3 billion, for the firstnine months of 2005. Major deals included:the acquisition of webloyalty.com by General

Atlantic; Hellman &Friedman’s buyout ofDoubleClick; and GeneralAtlantic and Quadrangle part-nering to buy Dice, an onlinerecruiting service for technol-ogy professionals. Over $1 bil-lion of new money flowed intothese three deals alone. Ofcourse, these transactions allshare one unique feature: theseinteractive businesses will like-ly be for sale again within afew years, as private equityplayers look to the majorstrategic buyers for exits.

Conclusion

This trend of “broader buy-in”into the interactive market islikely to continue due to threemajor reasons: 1) diversifiedmedia and marketing compa-nies have a mandate to grow,and these incumbents own thecapital, customer relationshipsand management depth tobuy and expand these fast-

growing new models; 2) private equity firmswill continue to acquire fast-growing onlinecash flow businesses, particularly while interestrates remain low, with the intent of selling themin three to five years; and 3) the media andinformation industries are retooling for asearch-driven world (see article on page 7 to seehow search is impacting B2B media), as con-sumers and businesses continue to move theiractivity online. This is a transformation of amagnitude comparable to how railroadsreshaped manufacturing at the close of the 19thcentury, and we expect to see many more acqui-sitions of online innovators by historicallyoffline companies, as this market evolves. g

JEGI represented PointRoll in its sale to Gannett, LightReading in its sale to United Business Media andJupitermedia’s sale of Search Engine Strategies and theClickZ.com Network to Incisive Media.

Traditional Players Drive Growth of New Media M&A

3

Each year, JEGI holds its Annual Private Equity andLenders Forum for senior executives from the finan-cial community to discuss the latest developmentsin the Media and Information Industries. Thekeynote address at this year’s event was providedby Rishad Tobaccowala, Chief Innovation Officer,Publicis Groupe Media, which is the board oversee-ing Starcom MediaVest Group (Starcom) and ZenithOptimedia. Starcom places $34 billion of advertis-ing for its clients each year.

The following is a summary of Mr. Tobaccowala’spresentation, in which he discussed the continuingevolution of advertising in a world of proliferatingand fragmenting media. He pointed out that the

growth of diversified entertainment and information choices requiresnew ways of thinking about marketing.

The upshot: The mainstream advertising agency is under assault,and the standard paradigms are changing.

According to Mr. Tobaccowala, Starcom starts by focusing on people,and the true essence of the company is a strong concentration on humancontact. The company’s mission is to understand how enabling tech-nologies are endowing customers with the media equivalent of “god-like” powers. He said, for example, that ten years ago, not a single per-son would have been able to grasp the concept of a little device thatenables people to talk to anybody in the world, take pictures, send e-mail messages and play music, or that another device would be able tohold more recorded music than what existed in the world a century ago.Not only that, but today, these devices, a Treo and an iPod, can be pur-chased for a total of less than $500.

The implications of this evolution are “devastating and compelling”.Enabling technologies are producing increasingly media-savvy cus-tomers, and therefore, Mr. Tobaccowala believes, “the spine of market-ing is collapsing”. Marketing media of the past has been built on certaingivens, including that you first take scale and segment it into smallerunits, and then use standard ad units (e.g., 30-second ads, individual adpages, etc.) to deliver your message. Additionally, marketers wereaccustomed to using set time intervals to run advertising messages. Forexample, Sears would always advertise the Wednesday beforeThanksgiving, and Disney would advertise in the weeks leading up toChristmas. This paradigm has been shattered, as the key elements thathave historically made marketing a somewhat predictable endeavor aredisappearing.

To illustrate his point, Mr. Tobaccowala spoke of a recent day when threemedia-related newsworthy items were announced: 1) Fox Interactive(News Corp.) acquired IGN; 2) Apple/Motorola introduced the new Rockrphone/music player and separately, Apple launched the iPod Nanomusic player; and 3) the first rumor of eBay’s conversation with Skypewas reported. Mr. Tobaccowala predicted that at least two of theseevents would shake the marketing world. His conclusion: “there is nolonger a steady state.” In the past, marketers were accustomed to anenvironment characterized by some amount of stability. Today, they’rebeing told that there is no way to halt this evolution, and that it will onlyget worse.

So, what is Starcom’s take on all of this? According to Mr. Tobaccowala,we are entering the era of “imagination media”, in which marketers arenot going to be able to purchase solutions “off the shelf”. In order toreach consumers across a broad spectrum of media choices, marketerswill have to pay much more than the current $2/hour for a person’sattention. Marketers are also going to have to prove the “valueexchange” by creating relevant messages that enable consumers to doone or all of the following: participate in the media; manipulate the

media; and/or interact with the media by making the media expressive.The most successful marketers today are utilizing at least one of these.

Starcom has been telling clients that television will be more important inthe future than it is today. They are not necessarily talking about televi-sion as we know it today, and they are certainly not saying that the 30-second commercial will be as relevant in the future as it is now.Starcom’s view is that television is evolving, and there is a need for newmetrics. For example, research shows that people are replacing $300televisions with $3,000 televisions, buying digital video recorders andcutting in half the number of commercials they view. However, they arewatching more television now than ever, especially when in-home andout-of-home viewing are combined, and then augmented by broadbandvideo, gaming and “other modalities”.

Marketers must create a “connection environment”, Mr. Tobaccowalastated, in which they meet their customers in their search for contentand community. In a few years, our children will not understand the dif-ference between broadcast and cable television channels. To them, tel-evision will be television. So, smart marketing must link the new and theold media. “New media is the Tabasco sauce, and the old media is thepizza. A little bit of the Tabasco really spices up the pizza. Don’t keepthe two media separate. Find a way to combine them, since customersdo not distinguish between old and new media.”

Consumers increasingly have access to any medium at any time. This isthe age of customer-centered and customer-customized media. Thebiggest opportunity that is presented to marketers is a “passion-baseddatabase”. This is a far cry from the traditional database that shows con-sumer purchases and demographic data. These traditional data wereinteresting and suggestive, but they ultimately did not tell marketershow to connect with consumers. Increasingly, the interests and passionsof consumers are being richly defined by their choice of content and theirmedia behavior, including their selection of movies, television programs,Web sites and special interest media. g

The Continuing Evolution of Advertising

In light of these developments, Mr. Tobaccowala suggested to hisaudience of private equity investors that the following areas are fer-tile for investment:

1. Television – television viewing is not decreasing, but going forward, consumer media behavior will not bedefined solely by the traditional television screen.Television viewing must also include online viewing andmobile devices.

2. Voice over Internet Protocol (VoIP) – a technology that allows you to make telephone calls using a broadbandInternet connection instead of a regular (or analog) phoneline.

3. Unique Marketing Venues – placing ads in playspaces and out-of-home venues, such as gas stations, Wal-Marts, shopping malls and Starbucks.

4. New Media Measurement – new media measurement techniques that will allow marketers to measure all ofthese new media options.

5. Networks – the wide proliferation of media requires a constant process of aggregating and integrating.

6. Social Networking – Internet applications that help connect friends, business partners, those with commoninterests and others.

Rishad Tobaccowala Chief Innovation OfficerPublicis Groupe Media

4

(continued from page 1)

full articles online will be less likely to read theprinted issue. In time, this could have a nega-tive impact on ad revenue, since there is no cer-tainty that online ads will produce the sameamount of revenue that is being generated fromprint ads.

It is difficult to predict how successful Google’snew search initiative (to create a complete digi-tal library) will be, since much of it will dependon whether the libraries and the publishingcommunity allow Google open access to allprinted materials, while a large amount of con-tent continues to be published online at nocost. If this occurs, then Google’s mission willmost likely be accomplished quickly and fairlyeasily. I believe that complete open access to allpublished materials will likely have a negativeimpact on publishers.

What keeps me awake at night is wonderingwhy publishers are so slow to respond to chal-lenges that threaten their well being. Publishersneed to beat the drum, showing the value oftheir publishing products, in terms of develop-ing unique editorial content and the due dili-gence that goes into editing and fact checking. It seems that publishers do not hold their con-tributions in high esteem; otherwise, theywould mount an all out battle against the searchengines, which persevere only because this con-tent is available online at no cost.

Jake Winebaum, CEOBusiness.com, Inc. www.business.com

Business.com helps business professionals findexactly what they're looking for through its busi-ness-focused search engine and directory.

Business.com’s only revenue stream is pay-per-click advertising, which we expect will growover 50% in the coming year.

To be better positioned in our core markets in2006 and beyond, we are investing in our prod-ucts (business-focused search engine and direc-tory) to continue to improve the user experi-ence and our ability to serve our publishingpartners. We are also investing in our infra-structure and systems to better serve our grow-ing base of users and advertisers.

Search is our business, and Google is a friend.We have been partners with Google on severaldifferent opportunities over the past four years,and have every intention of continuing to part-ner with them in the near future.

I am concerned about an abundance of capitalreturning to the “Internet” market, which couldcause irrational business decisions among bothexisting and new competitors.

Kelly Gay, President & CEOKnowledgeStormwww.knowledgestorm.com

KnowledgeStorm specializes in online lead genera-tion and brand awareness for the technologyindustry. It aggregates content from software,hardware and IT services vendors.

The outlook for all our important revenuestreams is for continued growth in bookingsand revenue at 30% over the next six monthsand 60% over the next twelve months, conser-vatively. We are currently growing faster thanthese numbers, and we expect the growth tooccur across all revenue streams, led by leadgeneration, sponsorships of all types (newslet-ters, email, category, etc.), lead qualificationand click-based products.

To be better positioned in our core markets for2006 and beyond, we have packaged our coreproducts to appeal to much smaller companiesin the information services industry and toextend our core offerings with new services thatare important to a broader set of marketingneeds. Both of these initiatives position us fora broader market base and a more extensiveportfolio for our existing customers.

We have also launched a low-end online direc-tory for local and regional service providers andintegrators. We have launched click-based andimpression-based offerings for our existing leadgeneration customers who are seeking a way toextend their reach on KnowledgeStorm. Wehave also introduced an industry vertical searchsite for the B2B technology industry that pro-vides a very targeted set of results for specificsearches.

Search is central to our business and Google isabsolutely our friend, along with the othersearch engines. Google gives us the opportuni-ty to put users seeking B2B technology infor-

mation in front of our technology clients. Inthe process, we provide value to both the userand our clients through all of our services,ensuring that appropriate results are returnedfor the search being done.

The single thing that keeps me awake at nightis thinking through ways to maximize theopportunities that are right in front of us. Thethought process usually revolves around ensur-ing we have the right skills, people, capitaliza-tion, product, etc.

Peter Horan, CEOAllBusiness.com www.allbusiness.com

AllBusiness.com is an online media and e-com-merce company that addresses real-world businessquestions and presents practical solutions.

AllBusiness.com is in a high growth mode, andwe focus on three main streams of revenue: 1)display advertising; 2) pay-per-click sponsoredlinks; and 3) e-commerce, including sales of ourown products and lead generation revenue frompartners. Each of these streams is expected togrow by several hundred percent over the nextyear due to two positive macro trends: 1) con-tinuing marketer interest in reaching small andmidsized businesses; and 2) the migration of adbudgets to the Internet.

AllBusiness.com is focused on four major ini-tiatives: content; architecture; commerce; andinnovation. Our content strategy is centeredon providing success-driven information andtools as actionable solutions to those who start,manage and grow businesses. Our site archi-tecture is designed to thrive in this age of user-driven media, particularly with regard to howwe welcome visitors who come to us fromsearch engines and then how we draw themdeeper into the site. Our commerce strategy isto be a marketing partner, not just an advertis-ing vendor, to the companies who work withsmall business. Finally, we are committed to astrategy of metric-driven innovation, and wewill be early adopters of new media and adver-tising technologies. For example, we havealready developed one of the fastest growingbusiness blog networks.

Search is and will be the most importantdynamic in media for the next 10 years.Companies can either use search to flourish or

(continued on page 5)

Positive Growth Outlook and Keen Insights on Search (cont.)

“While online subscriptions con-tinue to increase faster than thosefor print, we are finding thatprint is by no means dead ordying. What we have concludedis that these two media are readdifferently.”

“Our approach is to optimize ourentire site for search, includingthe content we create and how itis presented.”

“I am concerned about anabundance of capital returningto the “Internet” market, whichcould cause irrational businessdecisions.”

5

(continued from page 4)

disregard it and be crushed. About.com, forexample, has enjoyed a strong resurgence byharnessing the power of search for both attract-ing a large audience and monetizing it. Ourapproach is to optimize our entire site forsearch, including the content we create and howit is presented.

I am most concerned about the US economy,especially whether we can sustain economicgrowth while we are paying for the Iraq War,rebuilding the Gulf Coast, and enduring highgas prices and rapidly rising interest rates.

Peter Shea, Chairman & CEOEntrepreneur Media, Inc.www.entrepreneur.com

Entrepreneur Media publishes Entrepreneur mag-azine and a wide selection of books for the entre-preneur market and produces theentrepreneur.com Web site.

Over the next six to twelve months, I see strongorganic growth in all our important revenuestreams, led by online media revenue and fol-lowed by print magazines and book publishing.Overall, business is very good.

To better position ourselves in our core marketsfor 2006 and beyond, we have made a biginvestment in technology for our online mediaproducts and have revamped our Web site.Additionally, we have printed new marketingmaterials and are making a strong push withour sales calls. We have also invested in a newMMR (Media Market Research) study to aidwith our sales efforts.

In 2005, we are going to publish over 60 books.By 2007, we plan on publishing more than 100books per year. We have launched our ownsearch engine, but we have no problem withGoogle.

By the way, I sleep very well at night.

Will Margiloff, CEOeXact Advertisingwww.exactadvertising.com

eXact Advertising provides consumers with freeapplications and cash back rebates in exchange forlaser-targeted marketing messages.

Based on our funnel of prospects and backlog oforders in our SEM (Search Engine Marketing)and Agency businesses, we are expecting 15%-25% growth from these areas of the businessover the next six to twelve months. For the restof the business, we are anticipating approxi-mately 5% growth in 2006.

In order to be better positioned in our coremarkets for 2006 and beyond, we need to dothe following three things: 1) own the advertis-er; 2) own the technology; and 3) own/controlthe inventory.

Google is a friend to eXact, because as Googleexpands its business, it offers our customers bet-ter opportunities to reach their targets.

I’m always concerned about staying above thehype. We are finding that too many people arediving into our markets for the “quick buck”.We believe that a long-term strategy is the keyto building a long lasting and important busi-ness, and we must focus on the customer to besuccessful. Spending time on the latest fad canlead to significant off-strategy drains onresources.

Anthea Stratigos, Co-Founder & CEOOutsell, Inc. www.outsellinc.com

Outsell is a leading research and advisory firmproviding actionable market analytics for theinformation industry.

Over the next six to twelve months, we foreseeorganic growth in our important revenuestreams of approximately 20%.

For 2006 and beyond, we are setting a clearfocus on our target markets, and we have invest-ed in the creation and delivery of unique dataassets that our targeted markets require and thatprovide a fact-based underpinning to our analy-sis and recommendations.

We have also invested in product strategy thatspans a wide set of price points and revenuemodels, and we have invested in the channels –e-commerce, telesales, field sales, etc. – to bringthese strategies to the market. This will enableus to reach people and then sell to them at anappealing price point, with the right productset. However, we do so in a way that maintainsa strong product migration strategy, so that our

customers can easily change the price point andthe product mix, as necessary.

We consider Google and search, in general, afriend. We have successfully used search prima-rily for lead generation and awareness building.

Truthfully, I sleep well at night. However,change and the proper and speedy execution ofplans always concern me somewhat, although Iexpect those are any leader’s lament. When Ilook at Outsell, I see we have accomplished agreat deal in a short amount of time, and I seeus continuing to accelerate in 2006.

Michael Griffin, CEOMoney-Media, Inc.www.money-media.com

Money-Media is the premier source of intelligencefor investment management and corporate gover-nance officials.

We are excited about 2006! Money-Media hasbeen growing 40% per year, and we think thatwe can do even better next year. Here’s why:

We deliver “must read”, high priced, subscrip-tion content via electronic media. Our targetmarkets are Wall Street and corporate board-rooms, which both value the high quality of ourcontent. This results in high renewal rates andprovides us with the flexibility to increaseprices. Overall, our penetration in both marketsis fairly low, but the need for our informationcontinues to expand, which gives us plenty ofroom for growth.

Demand for online advertising is growing rap-idly. Our established advertisers are spendingmore, and we are receiving orders from a sur-prising number of new advertisers.Additionally, we are expanding our meetingbusiness, and we plan to launch one or two newpublications in 2006.

Google is our friend! We have recently imbed-ded their hardware into our sites, giving ourreaders a search function with Google quality, ata fraction of the cost if we created it ourselves.

Right now, I’m sleeping soundly, but experiencetells me not to get too comfortable, since thenext diversion could be fast approaching.

As a company, our biggest challenge is findingand retaining the top-notch people we need ifwe want to continue growing. g

Positive Growth Outlook and Keen Insights on Search (cont.)

“We believe that a long-termstrategy is the key to building along lasting and important busi-ness, and we must focus on thecustomer to be successful.”

“Search is and will be the mostimportant dynamic in media forthe next 10 years. Companies caneither use search to flourish ordisregard it and be crushed.”

“Demand for online advertisingis growing rapidly... we arereceiving orders from a surpris-ing number of new advertisers.”

Consumer Magazines 28 356

2005

No. of Deals

2004

Value ($MM)

% Change

Business-to-Business Magazines

Exhibitions & Conferences

Database Information Services

Online Media

Directory & Reference Publishing

Newspaper Publishing

Newsletter Publishing

Consumer Books

Educational & Professional Publishing

32

19

38

61

17

71

24

9

21

1,152

642

3,204

3,275

4,597

2,844

188

58

955

10.7% 589.9%

9.4%

52.6%

(28.9%)

14.8%

29.4%

(7.0%)

(33.3%)

(22.2%)

0.0%

58.9%

218.2%

163.8%

147.4%

157.9%

163.7%

(31.9%)

(15.5%)

9.3%

31 2,456

35

29

27

70

22

66

16

7

21

1,831

2,043

8,452

8,101

11,855

7,499

128

49

1,044

Media and Information Industry M&A Activity January - September 2005 v. 2004

Source: JEGI Transaction Database. * Includes announced deals through September 30.

No. of Deals Value ($MM) No. of Deals ValueJanuary - September* January - September*

Industry Sector

Total 374 $22,402 4.3% 130.7%390 $51,678

Marketing & Interactive Services 54 5,131 22.2% 60.2%66 8,220

The vibrant M&A market for the media andinformation industry saw $52 billion in trans-actions through the first three quarters of 2005.This represented a 130% increase over the sameperiod in 2004, across the 11 media and infor-mation sectors tracked by JEGI.

The drivers of this remarkable acceleration inthe market include: the convergence of tradi-tional media and interactive media, as tradi-tional media companies continue to look forgrowth through Internet-based business mod-els; the drive for growth by strategic companies,which are well past their cost cutting initiatives;strong debt markets, led by the persistence oflow interest rates; and a very active private equi-ty market, due to exceptional liquidity in themarketplace.

Indicative of the strong growth for the interac-tive media market, the three marqueetradeshow properties for the interactive sector(iMedia Communications; JupiterMedia’sSearch Engine Strategies; and Ad:Tech) weresold in 2005. JEGI achieved a veritable “hattrick” by representing all three sellers. In total,JEGI has closed 19 transactions to-date in2005, and our robust pipeline is a good indica-tor of continued strength in the M&A marketfor the remainder of the year and through 2006.

Highlights

4 Activity in the business-to-business maga-zine sector comprised 35 deals totaling $1.8 bil-

lion in value for the first nine months of 2005,representing 9% and 59% respective increasesover the same period in 2004. Key transactionsduring the third quarter included: the purchaseof Naylor Publications by Clarity Partners andZelnickMedia; and the acquisition ofBloomberg’s Wealth Manager magazine byHighline Media.

4Deal values for the consumer magazine sec-tor have increased sharply in the first threequarters of 2005 versus the same period lastyear, reaching $2.5 billion. This is due to anumber of $100+ million dollar transactions inthe sector throughout 2005, including the pur-chase of Gakusei Engokai Co. by the CarlyleGroup for $300 million in the third quarter.

4 Deal value increased approximately 160%in the database information services anddirectory and reference publishing sectorsduring the first three quarters of 2005, as com-pared to the same period last year. Althoughthere were several large transactions in the data-base sector throughout the year, deal value wasprimarily driven by VNU’s $7 billion acquisi-tion of IMS Health in July. Similarly, the direc-tory sector was led by a few large transactions,including Eniro AB’s recent $1 billion acquisi-tion of Findexa and several $2+ billion transac-tions earlier in the year.

4 There were 21 deals completed in the edu-cational and professional publishing sectortotaling over $1 billion in value, during the first

three quarters of 2005. The key transaction inthis sector in the third quarter was SchoolSpecialty’s $260 million acquisition of WicksLearning Group.

4 A wave of acquisitions in the exhibitionsand conferences sector pushed deal activity upnearly 53% in the first three quarters of 2005versus the same period last year. Over the sameperiod, deal value rose over 200%, reachingmore than $2 billion. Recent marquee transac-tions in the sector included: the purchase ofJupiterMedia’s Search Engine Strategies byIncisive Media for $43 million; the $24 millionacquisition of SOCMA’s Informex exhibitionby CMP Media (a subsidiary of UnitedBusiness Media); and the purchase of iMediaCommunications by dmg world media’s ad:techexpositions.

4 Led by Apollo Management’s $1.8 billionbuyout of Cendant Corporation’s Trilegiantbusiness in July, the transaction value for themarketing and interactive services sectorreached $8.2 billion in the first nine months of2005, representing a very strong 60% increaseover the same period in 2004. Over the sameperiod, deal volume rose 22%, reaching 66transactions in the first three quarters of 2005.Other noteworthy transactions from the thirdquarter included: ValueClick’s $133 millionacquisition of FastClick; and the $120 millionpurchase of Bigfoot Interactive by Alliance DataSystems.

(continued on page 7)

$52 Billion in Media and Information Industry Transactions through the First Three Quarters of 2005

6

7

(continued from page 6)

4 In the newspaper publishing sector, dealvalue rose significantly to $7.5 billion in thefirst three quarters of 2005, representing anincrease of over 160% versus the same periodin 2004. Since the number of transactionsactually decreased 7% over the period, dealvalue was driven by several large transactions,including the $262 million acquisition ofDetroit Free Press, Inc. from Knight Ridderby Gannett Co. and MediaNews Group inAugust.

4 Transaction activity in the online mediasector continues to accelerate. For the firstnine months of 2005, 70 announced dealsvalued at $8.1 billion represented a 15%increase in transactions, but a 147% gain invalue, over the same period in 2004. Notabletransactions in the third quarter of 2005included: News Corporation’s acquisition ofIGN Entertainment for $650 million; the$425 million purchase of LinkshareCorporation by Rakuten Inc.; and MTVNetworks’ $160 million acquisition ofNeopets. g

$52 Billion in Transaction Value (cont.)

Search Transforming B2B Media

The B2B media industry is retooling for a search-driven world, in whichresearch and product discovery happen primarily online, and lead genera-tion commands a large share of marketing budgets.

B2B companies are using search for two primary purposes: 1) to buildaudiences; and 2) to generate revenue.

Search for Audience AcquisitionThe first generation online publishing models expected users to type in aURL or click a bookmark to reach a home page entry point, similar to amagazine cover and table of contents. About.com, a pioneer of a newapproach, receives only 8% of its traffic at the home page or main channelpages. The remaining 92% arrives at article pages, delivered largely viasearch queries.

In the search-driven publishing model, content – articles, product directo-ries, Webcasts, wikis, etc. – are optimized to rank high in the “naturalsearch” algorithms of Google, Yahoo!, MSN and the other search engines.Every page is a “front door” that must hold viewers’ attention, provide theinformation the viewer is searching for, present additional useful resourcesand draw the viewer further into the site. The ultimate goal is to gatherenough information about the viewer to create a valuable lead for mar-keters. The end result is the ability to cost-efficiently build highly targeted,niche audiences.

The concept is easy to understand, but the application is quite challenging,as it requires a strong blend of editorial and technical skills. Companiesthat are leading this search acquisition model in B2B include:KnowledgeStorm in the IT sector; GlobalSpec for mechanical engineers;and AllBusiness.com for small business owners.

Search for Generating Revenue Google and other search engines are less useful for highly focused or tech-nical searches. As a result, a few B2B pioneers have begun to offer sector-specific “vertical” Web search, based on dynamic and constantly updated

indexes of content focused on a particular B2B sector, such as IT, engi-neering, etc.

The investment required to screen industry-specific sites and gain accessto “deep web” resources is a barrier to competitors, particularly to themajor search engines. Revenue is primarily generated from contextualadvertising through an outside provider, such as Google or Business.com.However, most vertical search sites expect to produce revenue from pro-prietary lead generation tools. For example, KnowledgeStorm recentlylaunched KnowIT.com (shown below), an IT-focused search engine, whichalso draws users into the KnowledgeStorm lead generation site.

ConclusionLooking ahead, B2B ad spending is likely to continue shifting to lead gen-eration, as search recuts the economics of attracting and serving niche ver-tical audiences. Major B2B media players will actively look to acquirethese new search-driven businesses, and we at JEGI would be happy to dis-cuss this evolving landscape with you further. g

The Center for Exhibition Industry Research (CEIR) has released the 2nd Annual CEIR IndexReport. This groundbreaking tool for the exhibition industry is designed to be representative of theentire universe of exhibitions, which is defined as all events with at least 3,000 Net Square Feet (NSF)of exhibit space. According to CEIR, there are over 13,000 events, of which approximately 10,000are B2B exhibitions comprising: 500 million NSF; 60 million Attendees; 1.5 million Exhibitors; and$10.3 billion in Revenue.

The Index is designed to provide an objective measure and analysis of the annual performance of theindustry across 11 key market sectors, including: Food; Medical; Construction; and IT. The Indexmeasures year-over-year changes for four key industry metrics: NSF; Attendees; Exhibitors; andRevenue. The metrics were gathered from data provided by over 250 events.

For the first time since the CEIR Index was established in 2000, the overall industry performance sur-passed the 2000 base line of 100.0, ending the year at 103.6. Three of the four industry metrics –Attendance; NSF; and Exhibitors – reported results that exceeded the base line, and although Revenuedid not surpass the base line in 2004, it gained 2% over 2003 results. The graph shows the trend forthe exhibition industry from 2000 to 2004:

Johnson Lambert collected the data. JEGI (TitleSponsor) provided a trend analysis by sector andoversaw production of the report. Trade ShowExecutive magazine (Publishing Sponsor) fur-nished an overview analysis for each industry sec-tor and oversaw final printing.

An Executive Summary of the report is availableon JEGI’s Web site: www.jegi.com. To purchasethe full report, contact Linda Braue at (310) 792-6081 or lindabraue@tradeshowexecutive.com. g

CEIR Releases 2nd Annual Index Report

Total

NSF

ExhibitorsAttendeesRevenue

* The above tombstones represent 15 of the 19 transactions JEGI has completed in 2005.In each transaction listed above, JEGI’s client is mentioned first.

August 2005

the ultimate source for technology and financial analysis

of the communications industry

has been soldto

CMP Media, LLCa subsidiary of

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has sold its

August 2005

to

Search Engine Strategies Trade Shows and

the ClickZ.com Network

August 2005

a leading media services firm serving the professional association market

has been soldto

and

for $43,000,000

a leading interactive advertisingtechnology company

has been sold

to

June 2005

March 2005

a subsidiary ofSchofield Media, Ltd.

has sold

Restaurant Business, FoodServiceDirector, Beverage World and

Retail Merchandiser Magazines andthe ID Access Web Site

to

September 2005

the leading information provider to thefinancial and insurance industries

has acquired

magazine and related assets

from

September 2005

a leading publisher and event producerfor the interactive media and marketing industries

has been soldto

producer of

Closing More Media and Information M&A Transactions Than Any Other Firm

19 Deals in 2005*... and Counting!

August 2005

has sold

CMM Internationalthe premier trade show for the converting and

package printing industry

to

August 2005

has sold

Informexa leading trade show

for the custom chemical industry

to

has sold

January 2005

to

conferences and exhibitions focusedexclusively on interactive marketing

has sold

February 2005

to

Apparel Magazineand related conferences, events

and online assets

July 2005

the leading aggregator of global business intelligence

has acquired

a provider of the most targeted marketresearch to a wide array of companies

January 2005

has sold

The Tissue World Franchisethe leading provider of events and

magazines to the tissue market

to

CMP ASIAa subsidiary of

January 2005

the leading international conference,tradeshow and information provider to

the global mining industryand an affiliate of

ISIS VENTURE PARTNERS

has been sold

to

September 2005

an independent professional trade journalfor the credit union industry

has been sold

to

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