Those who have been fortunate enough-or unfortunate enough (sometimes it's hard to tell)-to work in the business-media field for the past decade are probably experiencing a little dejA vu right about now. Turn the calendar back about 10 years and industry veterans will recall some dark days for the trade business. Companies struggling to incorporate new technologies. The economy flatlining after years of abnormally strong growth. Advertisers sitting on their hands. Postage costs rising. Magazines folding. Sound familiar?

Well, it's not exactly the same. At least three major changes have taken place since then, paradigm shifts that ultimately will dictate how the major players in the trade media world will confront the current nervous climate and live to tell about it 10 years hence.

For starters, publishers no longer seem completely comfortable with the term "trade magazine," with its nostalgic connotations of towers of Varietys and Billboards piled atop one's desk every Monday morning, essential reading to be dealt with before slipping out to lunch at The Palm. In the wake of the new economy, publishers have almost unanimously upgraded to the slicker "business-to-business," or B2B. The name change underscores the shift of subject matter from the making of goods to the providing of services. It also signifies that the contemporary model should provide a range of business services, including (but not limited to) magazines, Web sites and trade shows.

Second, a wave of mergers and acquisitions has narrowed the field of trade, er, B2B publishers down to a few leading companies. Primedia's William Reilly spent the 1990s assembling a stable of more than 200 niche magazines into the world's largest producer of ad and edit pages. Reed Elsevier jumped into the category with both feet by purchasing Cahners in 1996 and Chilton in 1997; last summer it dropped $300 million to add the CMD Group, a publisher of construction market data. Dutch-based VNU upped its U.S. presence by absorbing BPI Communications and Bill Communications in 1994. Then, in July 2000, the company bagged Miller Freeman, America's second-largest trade show producer and publisher, for $650 million.

"People were looking for growth," explains Wilma Jordan, CEO of the media-industry investment bank the Jordan Edmiston Group and the JEGI fund. "Companies felt they had to look beyond organic growth" to improve top-- and bottom-line numbers. Trade publications, which often come packaged with trade shows, conferences, newsletters and other lucrative goodies, tend to have profit margins of IS to 20 percent, significantly better than most of their consumer magazine cousins.

The third change, which will have the most lasting impact, was the arrival of the Internet. Mid-decade, publishers became mesmerized by the prospect of tremendous savings on printing and mailing costs, as well as the opportunity to arrange themselves as streamlined "vertical portals" and "B2B exchanges." Decision makers might log on to check overnight grosses or to find out which of their competitors had been fired, then stick around to order a newsletter or some proprietary data, or even to conduct business transactions-with the publisher taking a small transaction fee, naturally. It was like the cable TV revolution all over again. The big boys knew this technology would change everything, they just weren't sure how.

Then the bottom fell out of the NASDAQ, online advertising budgets for 2001 vanished, and, suddenly, it seemed as though everything that was certain was now up for grabs. We spoke at length with the top executives at the Big 3 of B2B: Cahners, VNU USA and Primedia. Things still are pretty much up for grabs, but there are a few constants, circa 2001: Diversification is out. Integration is in. And no one's ready to give up on good old advertising revenue and trade shows just yet.

CAHNERS: Picking Their Markets

When Marc Teren stepped into his role as CEO of Cahners in February 2000, fresh from heading up the Washington Post's interactive division, he found himself at a company with a reputation of being painfully slow to embrace the Internet. Cahners was still digesting its smorgasbord of Chilton publications. The digital marketplace Vertical.net was growing like a weed and luring talent away from more established companies, casting a growing shadow over Cahners' home turf.

What was an online gunslinger like Teren to do? Tell everyone to take a deep breath and concentrate on the company's core brands, which include established names like Variety and Publisher's Weekly. Because that's where the money was going to come from.

"The most important thing that was happening on the Internet," Teren says, "was not about the revenue but the perception that on the Internet, with that distribution vehicle, someone else's brand position was more relevant to readers and advertisers than the trusted brands that we owned. It was the usurping of that position that accelerated all of our investment levels."

The new strategy? Focus. In his 14 months at the helm, Teren says, "we've begun a significant transformation from a diversified scale publisher to a market-- centered organization." Thus Cahners, which had cast a very wide net with its more than 135 trade publications, reorganized into three units of specialization-manufacturing/electronics, media and construction/retail-each with its own president responsible for approximately $300 million worth of business.

The company also began shedding businesses that did not fit the new model: It sold a group of food and industrial publications in January, and two sets of automotive properties in March. The ultimate goal, Teren says, is to consolidate to the point where Cahners is the No. 1 or 2 publisher in each of its markets-a solid strategy in a tough ad climate.

Teren hasn't forsaken his Web roots. Reed Elsevier, which has recently started to emerge from a long stockprice funk, is counting heavily on Internet B2B revenue, which doubled in 2000 and is forecast to grow another 80 percent this year. (Unlike the other companies discussed here, Reed Elsevier runs its trade shows and conferences as a separate division, apart from Cahners.) Teren had simply believed that the pure Internet play was bound to crumble and that he needed to keep revenue flowing to the home office in London. Thus the move toward vertical consolidation.

Two major recent Cahners purchases illustrate where the company is going. After buying the CMD group, a traditional publishing and data business for the construction industry, Cahners acquired eLogic Corp., a cutting-edge Web technology company, for $79 million. Very quickly, Cahners had two things it lacked: a greatly improved supply of need-to-know information in one of its new key sectors and the tools to get that information to its core customers.

For all the talk of vertical portals and proprietary information, however, Teren has some old-fashioned ideas about making money. Variety.com recently moved to a subscription model, and to meet the "significantly higher margins" he expects a few years out, he's counting on an old friend: advertising.

"The holy grail of B2B was supposed to be marketplaces," he says. "I have always represented that marketplaces would be secondary for companies of our nature. We're going to continue to work with a diversified revenue stream. But advertising is likely to continue to be the largest component of that."

One footnote: A little more than a year into Teren's watch, Vertical.net's stock has lost 96 percent of its peak value and the company has decided to concentrate on its software operations.

VNU: All the Data That's Fit to Print If you work in the media or entertainment businesses, chances are VNU will know how well you're doing before you do. The company's $2.7 billion acquisition of AC Nielsen in October 1999 gave it a major research tool in TV, film (National Research Group), retail music sales (Soundscan), ad rates (SRDS) and radio (Broadcast DataSystems). And now that VNU (the parent company of Adweek Magazines) is the leader in handing out data, the company's call to arms, according to CEO Jerry Hobbs, is amping up its emphasis on interpreting that raw information.

"If you're just selling data, you're leaving a lot on the table," Hobbs says. "You have to integrate it into applications that are easy to use. We offer both the intelligence and the tools. And that's a good position to be in today."

To help accomplish this goal, Hobbs is overseeing the parsing of VNU USA into three groups: VNU Business Media, consisting of its BPI and Bill publications, new media and trade shows; media information (Scarborough, Nielsen Media Research and Net Ratings); and marketing information, comprising Spectra and Claritas. Similarly to Cahners, Hobbs wants to be "relatively narrow and very deep," using publications, trade shows, new media and marketing information to grow VNU's business in the handful of marketplaces it plays in: entertainment, design, retail/food, media and agencies, health care and business services.

Like Teren, Hobbs is a firm believer in the future of advertising as a source of revenue. His goal, after the reorganization is complete, is to be able to combine the functional expertise of his three units and have VNU's salespeople start making client calls at higher levels.

"Advertisements are a kind of investment," Hobbs says, "because the head marketing guy at a company and the CEO are often involved with making ad buys." When it comes to magazines, Hobbs knows what he's talking about: VNU publishes 180 of them. And it's through his stewardship of all those titles that he has learned the importance of marrying numbers to analysis, without sacrificing the integrity of the core product. "There are plenty of examples of companies that pushed the publications under the data business and destroyed the [franchise]," he says. "People have learned recently that data without interpretation, without analysis, without easy application is not the panacea they thought it was."

If that sounds a little 20th century, so be it. VNU has done well over the last few years-- the stock is well off its 2000 high, but it has tripled in value during the last five years-by sticking to its strategy of acquiring must-have information sources and waiting for customers to demand their fix.

In the wake of the Miller Freeman acquisition, much of VNU's steadiest revenue will be flowing in via McCormick Place and the Javits Center. "Trade shows provide a heck of a lot of stability," Hobbs says. "Most industries have one big trade show a year, and that [type of show], for the most part, is what we do. Those aren't going away. Yes, they're costly [to attend], and not all that efficient, but it's a touchy-feely thing and you've got to do it."

PRIMEDIA: Primed fop the Web

Let's cut right to the chase here: Tom Rogers has bet Primedia's rather sizable farm on the Internet. In just one year, he has tasted the sweet and sour results of that gamble. Twelve months ago he was a Wall Street darling, the new-economy genius behind MSNBC and CNBC who would lead Primedia's stodgy group of niche magazines, video properties, newsletters and such into the digital era. In March 2000, after five months on the job, Rogers announced a major reorganization of the company into consumer and B2B units (accounting for approximately two-thirds and one-third of sales, respectively), and the sale of 5 percent stakes in Primedia to CMGI and Liberty Media. Then, in late October, the boss of such well-known titles as Seventeen and New York announced another bold initiative-the acquisition of Internet portal About.com.

A year later, anything related to the word Internet sends Wall Street running for cover. But for Rogers, nothing has changed: "My view is that when the rest of the world is stepping back and feeling as if they don't have to invest or figure this out, that's just the time to do it. When people see that the advertising market has returned and start looking for the types of vehicles where they can take advantage of true integration, we're going to be way out there."

Rogers draws parallels between Primedia and AOL Time Warner, the only other major publisher to stake so much on an online strategy. The difference, other than scale (even with $1.6 billion in sales last year, Primedia is a fraction of AOL TW's size), is that Primedia is a true special-interest publisher, pursuing what Rogers calls "passionate users" with both its consumer and trade titles. About.com is now the sixth most trafficked site on the Web, and Primedia has married About's B2B portal, ABZ, to its own IndustryClick. It has more than 1,000 special-interest Web sites.

"Probably the single biggest distinction between us and other [B2B] publishers is that we have enormous Internet scale now," Rogers says. "We touch 80 million browsers a month through About."

OK, now what? While Cahners and VNU concentrate on vertical domination, Rogers is focused on horizontal integration, promoting a corporate culture (and a reporting structure) that makes sure all of his Primedia children understand that they are now one happy family of "targeted marketing vehicles." A side benefit of the integration push has been the efficiencies: $30 million in savings in 2000 and a projected $49 million in 2001. "All our efforts will be in very different shape in a year than they are now," Rogers promises.

Rogers sees four types of content in his world: consumer content on one end of the scale; data and research tools on the other; and in between, trade publications and high-end business reporting. The moves he's made in Primedia's Media Central group may indicate where he'd like to be two or three years out. To his existing trade properties, such as Folio and Cable World, he's added the media-analysis group Kagan World Media (data and research) and an alliance with Steve Brill and his Content operations (for argument's sake, we'll call that consumer content). When Brill Media Holdings took over Inside.com, all four pieces fell into place.

Will Primedia's broad-based model be the next big thing? Or will verticality, as exemplified by VNU and Cahners rule? Tune in 10 years from now to see how it all turns out.