Case Blog

Two weeks ago in my posting, $1 Trillion Dollar Rescue Plan & a Changing of the Guard, I closed with: “This was clearly a historic week on the continent and in the United Kingdom. There is a new determination to deal with the structural issues that have left most of the countries with debt loads that the global bond markets can not support in the long run, and there is a new a resolve by these countries to put themselves on a course that will support sustainable long-term growth. The Obama administration will need to start addressing deficit reduction as well as we approach the November mid-term elections. Those of us in the private equity business will be closely watching the impact of government actions on recovering credit markets.”

Since I wrote that, Treasury Secretary Geithner visited England and Germany on his way back from China and advised them to take action to put the $1 trillion dollar rescue plan into effect. “After two years in which an historic financial crisis seemed to deprive the U.S. of its self-confident global economic leadership, Mr. Geithner signaled a newfound willingness to reassert American authority on the future of the world economy… ‘What Europe should do is implement the program they laid out,’ Mr. Geithner said Wednesday. The basic lesson of financial crises is that you have to come in and act quickly and with force.” (WSJ: May 26, 2010) Then on the 27th China denied it was reviewing its holding of Eurozone debt. “The denial—which followed a Financial Times report Wednesday about the State Administration of Foreign Exchange, an agency that rarely answers questions from the media—highlights China’s awareness of how volatile financial markets have become increasingly sensitive to even hints about how Beijing deploys its enormous foreign reserves.” (WSJ: May 27, 2010)

In spite of all of these efforts, the global equity markets were pummeled in May. “Between the ‘Flash Crash’ and angst over the worsening crisis in Europe, stocks suffered a dismal May, posting their worst decline for the month since Franklin Roosevelt was in the White House.” (WSJ: May 29, 2010) To further contribute to the slide, Fitch announced that they were downgrading Spain’s credit rating. (FT: May 28, 2010) What does this new religion about reducing deficits as a percentage of GDP mean going forward? I turned to Bill Gross’ June Investment Outlook letter, “Three Will Get You Two (or) Two Will Get You Three.” (Pimco) “So the developing predicament is becoming more obvious to Shakespeare’s ‘lenders and borrowers be,’ ” Gross writes. “Fiscal tightening and budget conservatism may have come too late for Greece and its global lookalikes. Continued deficit spending may be an exorbitant privilege extended to only a few. Caught in the middle are many developed countries that likely face New Normal growth rates and a continued bumpy journey toward that destination. Investors must respect this rather tortuous journey in the months and years ahead for what it is: A deleveraging process based upon too much debt and too little growth to service it. No longer will ‘two get you three’ in the investment world. Not 1,000%, but 4-6% annualized returns for a diversified portfolio of stocks and bonds is the likely outcome. And be careful — sometimes ‘three gets you two.’ ”

On a more positive industry note, the conference and exhibition business is showing signs of life after a very difficult ‘09. Informa, which derives almost 50% of its global revenues from events and training business, is a candidate “for promotion in next month’s Footsie index reshuffle.” (FT: May 25, 2010)

We are also enjoying a strong recovery in our events business at Asset International. On May 20th and 21st, ai5000 Editor-in-Chief Kip McDaniel produced our first Chief Investment Officer Summit (CIOS) in New York City. The event received high marks from all the attendees and sponsors. Our featured dinner speaker was Nassim Nicholas Taleb, best-selling author of The Black Swan, which has just been released in a second edition with a new section, “On Robustness and Fragility.” I highly recommend that this book gets added to your summer reading list.

We will hold our second CIOS event of the year in London on October 7th and 8th and once again Nassim Taleb will be the featured speaker and will explain how Black Swan events result in the market volatility we are experiencing.

As we close out the first quarter of the new calendar and fiscal year, almost all businesses are finding that their year-over-year performance has improved significantly. The first quarter of ‘09 represented the depth of the Great Recession, when the world as we knew it unraveled before our eyes. When earnings are released for the first quarter of ‘10 we will see, without exception, improvements in all sectors of the business media, including those newspapers that survived the downturn. This will provide momentum for continued improvement as we head into spring and leave behind a difficult winter on the east coast.

Mary Claire and I returned last week to Blackhawk for the first time since early January. The Bay Area’s spring is in full bloom. Spring shipments from Napa and Sonoma are arriving, most from the ‘07 vintage. As many wine critics have reported, ‘07 represents the best vintage for most varietals in Northern California wine country since ‘97. It is time to restock the wine cellar, with many wineries actually lowering their prices to reflect the reset that has taken place in the consumer economy!

While we continue to see the U.S. and U.K. economies recover and grow, albeit at slower paces than we saw in the fourth quarter of ‘09, the eurozone remains challenged by its PIIGS.  ”Greece, along with Portugal, Ireland, Italy and Spain, are Europe’s PIIGS - euro-zone members with fragile economies and large debt loads. Fitch Ratings poured fuel on the euro fire last week by downgrading Portugal’s long-term foreign- and local-currency debt to a notch, to double A-minus, with a negative outlook, meaning another downgrade is more likely than not. The euro promptly fell to 10-month lows against the dollar before rebounding Friday.” (“Helping Hand for Greece Also Helps Hedge Funds,” Barrons, March 29, 2010)  Those of us who have business interests in the eurozone will continue to monitor the German-French brokered deal to keep Greece from defaulting. I was surprised to see Chancellor Merkel prevail on the side of fiscal discipline and the IMF being invited to join the bailout of Greece in order to preserve the Euro.

I wrote back in September of ‘07 in Global Brands, “In our global economy, even proud islands like the UK need to acknowledge that we all operate in a very interconnected world. Will the pound some day give way to the Euro?” I stand corrected; the Pound Sterling will survive and will continue to show strength versus the Euro. I was much closer to the mark in my last post, The Pound Sterling. We will continue to watch with great interest the upcoming spring election battle of Labour vs. the Tories. Closer to home and after our long health care debate, I recommend you read “Game Change: Obama and the Clintons, McCain and Palin, and the Race of a Lifetime,” by John Heilemann and Mark Halperin.

I spent the past week in London. While it was colder than normal, I missed the February blizzard that blanketed the northeast U.S. on Wednesday. Over the past several years, Mary Claire and I have managed to be in New York City for each of the major February snowstorms. This time she got to enjoy the winter wonderland without me.  It was hard to gauge on this trip if the Labour Party was bouncing back in time for the spring election or if the Tories had peaked too early, and no one I spoke with seemed ready to make a prediction.

Speaking of predictions, The Field General lost to the clever Sean Payton and the Drew Brees lead Saints. Congratulations to all those long-suffering Saints’ fans and the city of New Orleans. I trust that Peyton Manning and the Colts will get at least one more shot at another Super Bowl before Manning ends his stellar career.

While in London my meals were distinctively French. We had lunch with Dominic Hobson and the management team of Global Custodian at L’Oranger on St. James’s Street. This classic restaurant never disappoints. One evening we had dinner with John Lee and his senior team from The Trade at The Bleeding Heart Restaurant in Bleeding Heart Square, just off Hatton Garden. The ambience, service and cuisine were, as always, superb.  Both groups continue to build upon the strong momentum they established in the fourth quarter.  Finally, I got to try a new restaurant, for me, The Orrery Restaurant on MaryleBone High Street.  Orrery is located with Conran’s and is a superb restaurant, again French, with enough room between tables for one to truly enjoy a special meal with colleagues or friends.

On the M&A front in London, the announcement by Pearson (PSON/PSO ADR) in January that they were exploring options for their majority-controlled public company Interactive Data Corporation (IDC) brought out a long list of potential bidders. IDC is a global provider of financial market data & analytics for financial institutions and traders and is listed on the New York Stock Exchange. The company was formed in 2000 when Pearson merged FT Interactive Data Corporation with Data Broadcasting Corporation and gained the majority position. It is clear that with the amount of interest this auction has attracted, with bids due shortly, the winner will need to pay at least $3B for this trophy. The list of suitors according to the Wall Street Journal (WSJ, 2/3/10) and the Financial Times (FT, 2/10/10) includes many of the major private equity funds: Apax, Apollo, Bain, Blackstone, Carlyle, Hellman Friedman, KKR, Permira, and Providence. McGraw-Hill and Thomson-Reuters were listed as the two interested strategic acquirers. The FT also reported that Bloomberg, which recently purchased Business Week but does not have a history of large acquisitions, was not intending to bid.

Within the past two weeks it was also announced that the Financial Times had purchased Medley Global Advisors as FT continues to look for subscription-based data products to lessen their dependency on advertising. This relatively small acquisition is along the lines of Money-Media, another subscription-based business FT purchased two years ago.

It is clear that as global financial markets continue to recover the companies that have both the financial data and analytical tools that provide transparency will see significant EBITDA multiples offered when they come to market in an auction environment.

We will be announcing, shortly, the appointment of a managing director for Strategic Insight, who as part of the Global SI team will manage our expansion in the UK and the rest of Europe from our new London office.

The recent news in New York has been positive for the institutional financial services sector. Two weeks ago Bank of America (BAC) surprised most analysts by announcing that they had worked out an agreement to pay back the $45B of TARP funds they needed to carry them through the Great Recession. Greg Curl, one of the internal candidates to take over from Ken Lewis as CEO, negotiated the arrangements with the government. Shortly after the announcement Bank of America sold new shares, which gave them the capital base they needed to pay back the Treasury. It is becoming clear that the government will get their desired return on the TARP funds, as they predicted. The Merrill Lynch acquisition by Bank of America is starting to look better each quarter as trading profits improve dramatically. Citigroup (C) and Wells Fargo (WFC) remain the two money center banks that have not yet repaid the TARP funds, but they are inching closer to an agreement each week.

I flew to London on Wednesday to spend time with our two U.K. subsidiaries, Global Custodian and The Trade. I found the overall mood to be positive and The City looking very festive for the holiday season. I was greeted, though, by headlines in the Financial Times that Chancellor Darling was imposing a new 50% tax on bankers’ bonuses to be paid by the institutions. Prime Minister Gordon Brown was able to quickly get the support of the French President Sarkozy, while the Germans demurred. It seems like we will have to live for a while with the idea of taxing an industry in recovery from the worst downturn since the Great Depression.

Finally, on the media side of the equation, Springer Science & Business Media was sold, not to a strategic buyer like Informa, who had been evaluating a deal, but to EQT, a Swedish private equity firm controlled by the Wallenberg family and GIC, Singapore’s sovereign wealth fund. (Telegraph, 12/11/09) The sale was driven by Candover’s and Cinven’s need to exit this investment, with loans coming due next year. Derk Haank, a former colleague at Reed Elsevier and a very able publisher, will continue as CEO. This deal is another sign that the private equity media market is starting to emerge from a very slow ‘09, with leverage returning to the market.

This Thursday when we sit down to Thanksgiving dinner with our family and friends the majority of us will be thankful for surviving the Great Recession and seeing a very challenging year for the global economy come to an end. While we are cautious in our outlook for 2010, we know that the first and second quarters will show significant growth over ‘09, when we were still in free fall.  Earlier this week, Treasury Secretary Tim Geithner appeared on Capitol Hill before a Joint Economic Committee hearing and discussed winding down the TARP program. In a “sometimes contentious” hearing he made the point that the economy is in much better shape than when the Obama administration took office in January. (NY Times 11/20/09)  In spite of Representative Kevin Brady, a Texas Republican, calling on him to resign because the economy “was such a mess,” Geithner held his ground that there has been significant improvement.

As we move into 2010, I would like to see President Obama and his administration focus on job creation. With the unemployment rate over 10 percent and forecast by most economists to remain there for all of next year, we will not see sustainable growth until we move toward a significantly lower unemployment rate. This will require a more open and trusting relationship with the business community and a more realistic approach to tax policy at a time when the economy remains under pressure. As we move toward the mid-term elections next November, job creation and unemployment will be the key issues.

We are starting to see signs of the private equity market coming to life in the media and business information sectors. During the first week of November, IMS Health (RX), the leader in providing “market intelligence to the pharmaceutical and healthcare industries,” announced that its board had entered into a definitive agreement to be acquired by TPG and the CPP Investment Board. (IMS Press Room 11/5/2009) Goldman Sachs (GS) will provide the debt financing to take IMS private.  The total value of the transaction will be $5.2B and represents a significant premium for the public shareholders.

IMS was founded in 1954 and was acquired in 1981 by Dun & Bradstreet (DNB). It was later spun out of D&B as a separate NYSE company. Several years ago, VNU, later renamed Nielsen, announced plans to take over IMS and reunite A.C. Nielsen and IMS, which had both been spun out of D&B, but the shareholders revolted over the poor performance.  Management was forced out and eventually VNU was taken private by five large private equity players and now operates privately as Nielsen.  This transaction when completed will represent the largest leveraged buyout of ‘09. (WSJ 11/06/09)

I will close with some wine tips to accompany your Turkey Dinner!

Blankiet
This small winery is an inspired producer of outstanding wines. The 2006 Rive Droite is a Saint-Emilion styled, limited production (only several hundred cases) wine that will complement your meal and not overwhelm it. www.blankiet.com

Kistler
I just received my fall shipment of Kistler Chardonnay and Pinot Noir. The ‘07 Pinot Noir Sonoma Coast (RP 91-93) would be an excellent choice for Thanksgiving dinner. www.kistlervineyards.com

Merryvale
A more value-oriented selection would be Merryvale’s ‘07 Pinot Noir, Carneros. This is one of my longtime favorites to visit in Napa. www.merryvale.com

Miguel Mendoza Malbec, Reserva
This 2006 Malbec is for those of you looking for something different that also provides great value. This wine retails for under $20 and can be found at Sherry-Lehmann online or at their Park Avenue retail store.  www.sherry-lehmann.com

Mary Claire and I are headed to Boston to have dinner with our family and our car will be filled with the wines listed above. Happy Thanksgiving!

When I was in London several weeks ago, Lord Turner, chair of the Financial Services Authority, revived an old idea, the Tobin tax.  The tax is named after the economist James Tobin, who in the early ’70s proposed a tax on all currency transactions that took place across borders. He believed that this would cut down on currency speculation.  The Labour Party’s Adair Turner believes that today’s financial services sector has grown too large and a Tobin tax would help to bring it in line and reduce the excesses that lead to the global financial crisis.

Unfortunately, for both The City in London and Wall Street in New York, adding a new tax at a time when the financial services industry is just starting to recover will only delay a real recovery. In addition, both cities have suffered very significant job losses, which have reduced both their tax bases.  The most likely result of a Tobin tax would be that capital would find more efficient locales and the job and tax losses would become even more profound. The British Bankers Association said: “If we introduce the wrong kind of regulation or the wrong kind of taxes we could so easily lose that position by driving business abroad…On so many occasions in the past the country has lost chunks of industry through making the wrong decisions. Let’s not do that again.” (Financial Times: August 28th, 2009)

At this point, it is clear that the G-20 is not ready to adopt Adair Turner’s proposal. Have we forgotten how uncompetitive our economies were in the ’70s before Ronald Reagan and Margaret Thatcher, two kindred souls, came to power, cut taxes significantly and made both economies the envy of the world? Now, I am not arguing that there were not abuses, there were and we clearly need more transparency. But the G-20 focus on global growth without a new tax on the financial services industry is a much better strategy for a sustainable recovery.

In closing, if you are focused on the media industry I strongly recommend a new book. The Curse of the Mogul, by Jonathan Knee, Bruce Greenwald and Ava Seave. It will be published by the Penguin Group on October 15th and can be pre-ordered on Amazon, including a Kindle edition. I have read it in galley form and it is a provocative read that uses deal analytics, over time, to support its thesis.

I returned to New York City late on Thursday evening from a week in China. My trip, as I wrote in Summer’s End, was built around SWIFT’s Sibos 2009 event in Hong Kong.  It coincided with the one-year anniversary of Lehman Brothers’ filing for bankruptcy. As one looked around the exhibition hall in Hong Kong, it is clear that we are in a recovery. The press even reported during the week that Fed Chairman Ben Bernanke, in response to a question at the Brookings Institution said, “From a technical perspective, the recession is very likely over at this point. It’s still going to feel like a very weak economy for some time because many people will still find that their job security and their employment status is not what they wish it was.”  Dominic Hobson, editor-in-chief of Global Custodian, had a similar point-of-view when he told our guests at our event last Saturday evening in Hong Kong, to paraphrase: “That the world is still upside down, when the journalists are providing drinks for the bankers.”  I had the good fortune to follow Dominic to the podium and explain our plans for the global expansion of Asset International.

While the recovery will continue to expand, we will not see much job creation in the western economies over the next quarter or two. I am confident, though, that companies will start to add jobs in response to increasing demand by the second half of 2010. It was clear to me as we traveled to Beijing and Shanghai that China’s recovery was going to be much faster than the western economies  tied to the subprime debacle that took down Lehman Brothers and brought our entire banking system and the world’s major economies to the brink of the abyss. The energy and entrepreneurial spirit is alive and thriving in China.

We looked at several possible acquisition targets in China on this trip. While these businesses are still small by our standards, it is clear that they are growing quickly and that the demand for information and advisory services focused on the Chinese economy will continue to grow at a much faster pace than the overall economy.  We also came away with the understanding that the events business will continue to be an essential component of an overall strategy for growth in China.

Our second issue of ai5000 (www.ai5000.com), which will be released this week, will focus on the Asian/Pacific market with the cover story: The Metamorphosis of Chinese Capital.  Let us know if you have any colleagues that you would like to receive a complimentary subscription.

Last evening Mary Claire and I had the pleasure of dining at Eleven Madison Park. Chef Daniel Humm has made this the outstanding star in Danny Meyer’s restaurant universe. Daniel Humm came to Eleven Madison Park from Campton Place in San Francisco and has taken this restaurant to a new level over the past 12 months. Frank Bruni, who recently rotated out of his role of restaurant critic for the New York Times, elevated this lovely dining room to 4 stars on August 12th, 2009. The review is titled “A Daring Rise to the Top.” It is now at the pinnacle with Daniel and Per Se and just a handful of other establishments. Chef Humm works magic with his lobster dishes on most evenings. The wine list is extensive and clearly one of the best in the city. If you have a special occasion coming up, I strongly recommend that you call ahead early and make a reservation. www.elevenmadisonpark.com

As we celebrate Labor Day in the Bay Area, it is clear that summer is coming to an end. I returned to Blackhawk from a week in London, where Gordon Brown and the Labour Party continue to surprise me by still surviving. It looks like Brown will make it until he must call for an election in the spring.

We are evaluating several acquisitions for further expansion in London. In addition, organic growth through global expansion is also a priority. Information needs around pensions are still significant, as plans continue to recover from last year’s stock market debacle. Under Nevin Adams’ editorial leadership we will launch the well-respected Plan Sponsor brand in the United Kingdom and continental Europe. I sense that New York and London will remain the primary global money centers and we need to have a significant presence in each market. Commercial real estate offers similar opportunities to New York and we plan to consolidate our presence in a new headquarters in The City.

Many of London’s private equity players and their bank sponsors are working on restructuring plans. I was interested to see that the Royal Bank of Scotland and Apax have reached an agreement to split Incisive Media. RBS will take a controlling interest in the UK assets of Incisive, while Apax will still control the U.S. based ALM, which was under a separate financial structure with very different covenant requirements. The media industry will continue to be deleveraged throughout the fall, particularly in the newspaper sector.

Mary Claire and I will enjoy several last rounds of summer golf this weekend, and then she will return to New York while I head to Hong Kong, Beijing and Shanghai. In Hong Kong we will attend SWIFT’s Sibos 2009. It is a large conference and exhibition and for many it is one of the financial services industry’s major events. Last year in Vienna it drew over 8,000 attendees. We will be introducing Asset International’s growing portfolio of products and services, including our most recent acquisition, Strategic Insight. Charlie Ruffel and Dominic Hobson will host the event during this 20th anniversary year for Global Custodian.  The Trade’s editorial team (we acquired The Trade in June) under John Lee’s leadership will be producing the show dailies, which they have done for close to 10 years.  We will be looking for opportunities to further expand our footprint in this fast-growing region, which appears to be recovering at a faster pace than the west.

Fall has also given us the return of the football season in the U.S. The biggest upset of this inaugural weekend of college football was the #20 Brigham Young Cougars beating the #3 Oklahoma Sooners, who with their Heisman Trophy winner Sam Bradford had their eye on a national championship before last evening. Max Hall, the talented quarterback of BYU, clearly established the Cougars as a contender for a major BCS bowl game, in spite of playing in the Mountain West conference, one that is not insured of BCS Bowl representation.

In my last posting, I wrote about what the B2B industry will look like as it emerges in ’10 and ’11 from the deep recession (B2B Media Business on the Recovery: A Sneak Preview). While I am certain that we are now in a recovery cycle, economists, pundits and others are still debating where we are with regard to the recession ending and the recovery beginning.

When the history of this recession is written after all the data points are recorded, I believe that the 2nd quarter of ’09 is where we will officially mark the start of the recovery. As we close July it is difficult to see the recovery beginning because the summer months are traditionally slow months for the economy. This is particularly true for the media business. However, I am confident that September-December will confirm that we have started to see a fading recession in our rearview mirror and accelerating growth before us. It will be ’10 and ’11 before we know how strong and sustained the growth cycle will be, but it will certainly provide for a more robust deal market, as private equity firms and strategic investors begin again to redefine their portfolios.

Understanding the impact of this recession may be difficult at this point, but one benchmark that I will use to gauge the depth of the recession is Microsoft’s (MSFT) earnings announcement last week, where for the first time since they went public in the mid ’80s a year-over-year decline in revenues was recorded.

As we enter August, the Yankees and the Red Sox, the greatest rivalry in sports, are fully engaged, with the Yankees holding a slim 2 1/2 game lead over the Red Sox, in spite of having lost all eight head-to-head games this season. On Saturday I went to the new Yankee Stadium for the first time. I was delighted to see that the design of the field and the fabled facade give a sense of still being in the old stadium, while the comfortable seats and new amenities and restaurants remind you that this is a new experience. Sitting six rows behind home plate offered a wonderful vantage point, in spite of the Yankees losing to the last-place Oakland A’s after having won eight straight after the All Star break.

Finally, every golfer over 50 I met this week was feeling Tom Watson’s disappointment at having come so close, at age 59, to winning one more British Open, only to see his hopes evaporate on the 18th hole and then lose in a playoff to Stewart Cink, who is in his mid-30’s and realized his first major victory.  If you are looking for an interesting golf book to read, I would recommend “Are You Kidding Me?: The Story of Rocco Mediate’s Extraordinary Battle with Tiger Woods at the US Open” by Rocco Mediate & John Feinstein  Publisher: Little, Brown & Company.

This article was originally written for BtoB Media Business at BtoBonline.com.

We have been in the middle of the perfect storm since last September. Beginning with the demise of Lehman Brothers through February of this year, all of the markets were in free fall. The only other period that I can compare this to is after 9/11 in the fourth quarter of 2001, when the economies of the world ground to a halt and Herculean efforts were required to jump-start the world stock exchanges. While the wheels of commerce ground to a halt during both of these periods, this recession has been much deeper and cut a wider path of destruction.

After the collapse of Bear Stearns and the demise of Lehman Brothers, all eyes turned to Merrill Lynch. As we have recently learned, Treasury Secretary Paulson and Fed Chairman Bernanke were not taking anything for granted, and Ken Lewis, CEO of Bank of America, could not walk away from the Merrill Lynch deal even after he learned the extent of their losses in December.

While the bailout of the financial industry was getting underway, all attention then turned to the automotive industry. Could anyone have predicted that the American automotive industry would be brought to its knees, or that two of the Big Three, Chrysler and General Motors, would end up in bankruptcy and need to be bailed out by the United States Treasury?

We were not looking at run-of-the-mill businesses, but rather American icons that once were the envy of competitors around the world. The events of the past year will have a lasting impact on how we conduct business and will shape our information industry for years to come.

What will the markets we serve look like in 2010 and 2011? I sense that we will initially emerge as a smaller and more focused industry. Many of the venerable B2B names will not survive intact. Some of these have been part of the industry since the beginning of the 20th century, but they have not evolved and have lost focus with unwieldy portfolios, serving too many markets. Others that were acquired when money was cheap are now overleveraged and will need to go through a deleveraging process. In many cases their new owners will be their former lenders.

As the recovery accelerates in 2010 and beyond, the debate will intensify over branding vs. lead generation. Over the past several years we have become expert at developing lead-generation programs that meet our clients’ needs. Lead generation will remain a high priority for B2B marketers and will continue to fuel the growth of all vertical sectors. We will continue to refine how to package and deliver those leads in a format that works best for our clients. The best marketers will restore the equilibrium between branding and lead generation. The difference now, though, compared to how we emerged from the 2001 recession, will be that the majority of branding dollars will be spent online. Print will be continue to be a part of that mix, but it will represent a smaller and smaller percentage of the overall marketing budget as we accelerate into the digital world. In addition, live and web-based events, together with rich data and analytics products, will command a larger share of marketing services budgets. Companies that have not invested in content management systems (CMSes) or had their editors tagging content for easy repurposing will not survive as strong competitors. There will also be less competition from our old competitors, many of whom have made deep cuts to stay afloat. However, nimble all-digital competitors will emerge very strong during this period. Many of these companies still reside in the portfolios of venture capital companies, where they have been nurtured during the downturn and are now positioned to grow quickly during the recovery. There is another Google waiting to emerge, as they did during the last recovery, demonstrating that the marketing and advertising spend has not disappeared, but that technology has provided more efficient solutions that will meet market demand.

I would love to hear from you which venture capital backed companies you believe will become the new market leaders in our industry. You can reach me at: jcasella@assetinternational.com.