Softbank considers reorganization

Softbank, the Japanese firm that owns computer publishing giant Ziff-Davis and trade show operator Comdex, is discussing a major reorganization of its media properties in the United States, industry sources say.

Although no plans are final, Softbank is considering at least one reorganization proposal, which has been floated among the company's largest advertisers and trade show clients, according to sources who asked not to be identified. Softbank has an estimated $1 billion in annual revenues in its U.S.-based properties.

The most likely plan would create a single organization for Ziff's "content" operations, which include several computer print publications, two trade show groups (Softbank Comdex and Softbank Forums), its ZDNet online publishing ventures, and its announced ZDTV venture to create a 24-hour cable channel about high technology next year.

Under the most likely scenario, Eric Hippeau, now chairman of Ziff-Davis Publishing, would oversee all the Ziff media properties. The two trade show units would likely be merged into a single entity, leaving either William Lohse, who runs Softbank Forums, or Jason Chudnofsky, head of Softbank Comdex, out in the cold.

"We have no comment at this point in time," Ziff-Davis spokesman Greg Jarboe said today when asked about the proposed reorganization. U.S. representatives for Softbank could not be reached today.

For computer companies that advertise in Ziff publications and exhibit in Softbank trade shows, the reorganization would simplify dealing with Softbank, one industry source said.

"If you've got folks buying ad space from one entity and trade show space from another entity, there's a lot of overlap," this source said. "Customers are saying, 'Hey, it would be more rational for us if you could give us one coherent, coordinated proposal.'"

The reorganization would in some ways resemble the Ziff empire before it was sold off in pieces is 1994 by the Ziff family. At that time, the computer publishing group was sold to Wall Street buyout specialists Forstmann Little for $1.4 billion, while Softbank chairman Masayoshi Son purchased what was then called ZD Expos, today's Softbank Forums.

Son's Softbank later purchased the Comdex trade shows, the largest in the world at that time, separately. Then in late 1995, he bought the Ziff publications from Forstmann Little for $2.1 billion, giving the Wall Street firm a $700 million profit in just ten months.

All three entities operate independently today, although early this year Son created a management council of about a dozen top executives representing Softbank's major operations in the United States and Japan. That group meets every month or two, alternating between U.S. and Asian locations, a Softbank executive told CNET's NEWS.COM recently.

Softbank has other U.S.-based operations that apparently will not be affected by the reorganization, including a venture capital group and Kingston Technology, a manufacturer of computer memory, which is 80 percent owned by Softbank. How the reorganization would affect Softbank Interactive Marketing, an advertising firm that sells banner ads for Web sites, remains unclear.

Softbank's venture group has invested in dozens of Internet companies and owns significant stakes in Yahoo (YHOO), where Hippeau is a director, and Net payments firm CyberCash (CYCH).

Sources said the reorganization may not be finalized by the end of next week but is expected soon. "We're all moving at Internet speed," one Softbank source said.