Case Blog

Tuesday the Federal Reserve lowered the federal funds rate, as I had predicted, by 1/2 a point. The discount rate also moved down by 1/2 a point, and shortly thereafter Bank of America announced that they were lowering their prime-lending rate by 1/2 a point. The global stock markets rallied on the news!

Global brands, which is what I want to address here, establish confidence. Ben Bernanke and his board clearly understood the need to restore confidence and trust in the economy. This was also understood by the European Central Bank, which moved in concert with us as the liquidity crisis spread.

The odd man out in all of this was the U.K. and the Bank of England Governor, Mervyn King. As the crisis began King started out lecturing on the need for tough love, and soon found himself with lines of nervous depositors outside the doors of the Northern Rock bank branches. The visual images were reminiscent of the classic run on banks from long ago. Mr. King, together with the U.K. Chancellor of the Exchequer, Alistair Darling, and the Bank of England have ended up having to provide a large bailout, by guaranteeing all deposits. In our global economy, even proud islands like the U.K. need to acknowledge that we all operate in a very interconnected world. Will the pound some day give way to the Euro?

As we transition to a digital world, managing our brands becomes ever more demanding. Microsoft, which has done wonders with the Windows and Office brands, stumbled as they tried to rebrand Hotmail, IM and Search under the Windows Live brand. I am certain that with their unlimited resources they employed several of the best branding agencies in the business, but they still struggled through this transition. Those of us who come to this with much less in the way of outside assistance must clearly understand that we need brands that can travel globally and are not too niche in their approach. When I was with IDG in the ’90s, we were able to do this successfully with the “for Dummies” books, to the point where the brand was almost universally known.

All of us in the B2B or B2C space tasked with transitioning to the digital world are looking for the Holy Grail, an umbrella brand that inspires confidence and trust and at the same time can support many vertical channels. Strategy sessions and market tests play an important role in this process. Marketing dollars invested in branding will yield significant returns, although without strong digital brands there is not much chance of survival for print brands, even those with storied histories. I applaud the New York Times for abandoning its paid approach with TimesSelect and understanding that information on the net needs to be free and supported by advertising/sponsorship. I sense that the Wall Street Journal will not be far behind under its new owner, Rupert Murdoch, who said this week that the issue was “right on the front burner.”

Beyond the worlds of global economics and branding, the pennant races continue to tighten. The Yankees are only 1 1/2 games behind the Red Sox, after having been behind by 14 1/2 games at the All Star break, bringing back memories of Bucky Dent and 1978 AL East playoffs. Will the Mets hold on or fall to the Phillies? Fall is a wonderful season!

NOTE: This column first appeared min’s b2b this past week.

Many of us in the industry know Jim Casella, so we’ll keep the introduction short. Most recently, he was vice chairman of Reed Business Information (and, before that, CEO). Now, he’s hooked up with Austin Ventures to form a company called Case Interactive Media. The purpose? To find the next great B2B media platform, and to build the next great B2B media company. Jim will share with us what’s going on in his thinking in this regard, and in other pertinent matters as a contributor to min’s b2b. He’s got his ear to the ground; here’s what he has to say.

It is mid-September and the football season is finally here. Sunday’s games showed us that the Patriots, led by their inscrutable coach (even more inscrutable these days than ever, with the spy scandal and the $500,000 personal fine from the NFL), Bill Belichick, will once again contend with the Colts for the AFC title. I recommend the late David Halberstam’s “The Education of a Coach,” which is about Belichick. It has some new insights and into what he has brought to New England and the NFL; all leaders can learn something from this book, though not as much from Belichick’s latest actions.

Unfortunately, my two New York teams ended with losses and sore quarterbacks as they prepare for week two. And who would have predicted that when Michigan and Notre Dame meet on Saturday they would both be 0-2? It just goes to show you that the operational landscape can change both quickly and suddenly, and often in surprising ways.

Back to “real business.”

I was asked recently to speak on a panel regarding printer consolidation and its impact on publishers. Has the balance shifted in favor of the printer? I had to decline the invitation because of a scheduling conflict with management presentations on a deal we are working on, but it forced me to think about the supplier and vendor relationships that were most critical to us over the past decade, and which ones the B2B industry should be focusing on as we move forward. Most of us would have surely named the printer, paper supplier and postal rates as the three most important cost centers, after our staff.

Are we looking in our rearview mirror when we should be focused on building our online audience? Should we be more concerned about the ComScore vs. Nielsen//NetRatings audience discrepancies? With more and more discussion of a possible recession looming due to the housing market implosion, combined with the subprime-induced credit crunch, I believe the page decline will accelerate and that the smart money will move even faster online. Is anyone considering launching new print properties, or are all the investment dollars going to digital properties and events?

When the Fed meets next week, it seems clear that they will lower the federal funds rate by a ½ point to try to bolster a weakening economy. Can they engineer a soft landing? Deals continue to be pulled. For example, Carlyle decided not to sell Insight Communications when bids came in below their expectation, and will wait instead for a more favorable credit climate. I sense that we will continue to see buyers and sellers having divergent views on valuations for at least the next 60 to 90 days, or until there is a clearer picture on where the credit markets and the economy, overall, are headed.

In the interim, we should focus on deals that meet the criteria we have set for growth in the future. We should have a much clearer vision of the M&A media market as we approach ’08. I, for one, believe it will have deals being done with lower multiples and less leverage and that we will see more strategic investors involved in the process.

And, finally, I advise that we all enjoy the late September baseball pennant races.

Mary Claire often reminds me that September and October are the most wonderful months, from a weather perspective, regardless of where one is in the world. That certainly is the case in New York, where the US Open is in full swing and the crowds are enjoying gorgeous evenings to go along with outstanding tennis. The Federer vs. Roddick match was outstanding. We are watching one of the all time greats on his way to winning his fourth straight US Open.

We spent part of the Labor Day weekend enjoying New York and then flew to the Bay Area for the balance of the week. It was time to come back and take inventory of our home renovation project in Blackhawk. I will save the details for a later column, because the lessons learned are significant and this column is about innovation, not renovation. I will mention, though, that the wine cellar that is being created just off the kitchen is starting to excite us!

I am also here on the West Coast for a board meeting of Jigsaw, www.jigsaw.com, an Austin Ventures early stage portfolio company. Many of you may have heard Jim Fowler, Jigsaw’s co-founder and CEO, speak on a panel at the ABM Spring Meeting in Naples, Florida. Web 2.0 social networking companies continue to innovate and prosper here in the Valley. I once had someone explain to me that “on the east coast you believe that three content experts and one engineer will create outstanding products and services, but on the West Coast we reverse that and believe it is one content expert and three engineers that will carry the day.” Jigsaw’s community is clearly an excellent example of the latter. All of us involved in the B2B industry need to understand the profound shift that has occurred and that disruptive technologies will create new winners and losers.

I spent time during our vacation becoming better acquainted with the iPhone’s (AAPL) capabilities, which are extraordinary when you are in a WiFi environment. The experience is similar to holding a Mac in your hands. With yesterday’s price cut to $399 for the 8GB iPhone, longtime innovator Steve Jobs is once again leading the way in the consumer market. I am confident that AT&T is delighted with the leadership position Jobs has bestowed on their mobile platform. Many of the new investments made this fall in the Valley will be in companies with innovative mobile technologies.

Beyond the weather, fall is also my favorite season because of professional baseball and football. The Yankees were written off by many in July, when they trailed the Red Sox by 15 games. They are now moving closer to at least claiming a wild-card entry for the playoffs. We have all grown accustomed to this great rivalry of the Red Sox vs. the Yankees, and it looks like this postseason will provide us with another opportunity to pull for our favorite team. A-Rod was also written off last October, only to come back and have an MVP type of season. Many of us could learn a lesson from Joe Torre’s patience under fire.

Finally, this evening the Saints take on last year’s Super Bowl champions, the Colts, in Indianapolis. We will once again get to see outstanding leadership on the field from Peyton Manning and see how players react for a coach, Tony Dungy, that treats them with respect.

With innovative companies to work with during the week, outstanding sporting events to watch in the evenings and on the weekends, and some fall golf, I must admit that there is much to enjoy and keep us fully engaged this fall.