Mogul for a New Age : Bill Ziff’s Media Empire Is Built on High Tech-and High Standards

He’s one of the most innovative and successful publishers in recent history, the creator of two separate magazine empires and a multibillion-dollar family fortune. Yet Bill Ziff defies all stereotypes of the modern-day media mogul.

Reflective and publicity-shy, with an array of passions ranging from philosophy to football, Ziff grimaces at conventional labels such as “focused” and “visionary,” dismissing them as “attributes that are assigned to successful people.”

“I’ve never been a tough, ambitious, willing-to-sacrifice kind of person,” he mused one recent afternoon in his modest Park Avenue office. For business, he explained, “I’ve never had a sense of vocation, though I’ve always had a sense of vocation for fatherhood. . . .”

But make no mistake. Ziff, at 63, is one of the great businessmen of his generation--a competitive, charismatic and sometimes mercurial leader who draws talented people into his orbit.

And now, as Ziff-Davis Publishing Co. consolidates its position as the dominant purveyor of computer industry information--and as one of the nation’s largest magazine companies overall--Ziff himself is contemplating when he might step back from his active role.

His three sons and three nephews are already the owners of the business. With a cadre of young managers, they are now preparing for the next chapter in this extraordinary family business saga.

The story of Ziff-Davis is of no small interest to either the magazine world or the computer industry, for Ziff has had an exceptional influence on both. In its first incarnation, Ziff-Davis was a pioneer in special-interest magazine publishing, and many of Bill Ziff’s insights remain relevant for publishers struggling to define themselves in the age of electronic media.

After most of the company was sold in late 1984, it was reborn as a computer publisher. Ziff titles such as PC Magazine, PC Week and Computer Shopper now dominate their markets and wield tremendous clout.

In recent years, Ziff has expanded aggressively in electronic publishing and newsletter and trade show production, immodestly seeking to reinvent the way product and marketing information flows through the computer business.

Central to this success has been a high-powered corporate culture, carefully nurtured by the patriarch. It is a culture that is admired by many for being ethical, meritocratic, intellectually stimulating and extremely generous.

Yet the company is also criticized for being arrogant, overly centralized and too quick to turn its back on projects--and people--if they don’t work out as planned.

Ziff himself sets dauntingly high standards. His intellectual virtuosity is legendary. He can discuss the subtleties of contemporary analytic philosophy or the Moorish influences in 10th-Century Spain, name the lineup of every team in the National Football League--and dazzle even his own executives with his feel for nuts-and-bolts publishing issues ranging from circulation strategies to logo designs.

“He’s incredibly smart and he has a phenomenal memory,” says Jonathan Seybold, whose Malibu-based seminar company was acquired by Ziff three years ago. “You can almost be assured that if you had a conversation with him two years ago, he will remember everything.”

He works with great bursts of energy, associates say, relying on a combination of analytic intelligence and intuition about which details are important. He has a firm hold on all the important levers at Ziff--a bit too firm, some say. But he also is willing to listen--especially these days, and especially to his sons.

A recent retrenchment at the company--reflects in part the nascent influence of Dirk Ziff, 29, and Robert, 27. They have just begun working full time at the company, and they appear certain to play major roles in the years to come.

Along with a third brother and their cousins, the young Ziffs are the owners of both Ziff Communications, parent of Ziff-Davis, and a separate company called Ziff Bros. Investments, which controls an estimated $1.2 billion in assets from the 1984 sale of 24 Ziff-Davis magazines.

Ziff’s preoccupation with fatherhood reflects his admiration for his own father, William Ziff Sr.--an author, aviator, Zionist and Renaissance man--who founded Ziff-Davis Publishing Co. in 1927.

Bill Jr. was pursuing an academic career as a philosopher, studying in Heidelberg, Germany, when his father died of a heart attack in 1953. He decided to come home to the family business--relieved, he says, to leave the arid air of academe--and took the helm when he was just 24.

There were only a few small magazines then.

But over the next 30 years, Ziff built this inheritance into a dominant consumer and trade magazine company with dozens of titles, including Car & Driver, Flying, Popular Photography and Modern Bride. At a time when America’s major general interest magazines were being ravaged by the arrival of television, Ziff prospered with a seemingly simple concept of narrowcasting. People with sophisticated and expensive interests wanted sophisticated information about those interests, he figured, and magazines were the ideal way to deliver it.

“He literally invented special-interest consumer magazine publishing,” says Martin Walker, a New York magazine consultant who once worked at Ziff-Davis. Ziff developed innovative ad-sales techniques, invested heavily in quality editorial and readership research, and recruited top-notch talent with high salaries and an intimate, family-like atmosphere.

In the 1970s, Ziff began searching for new challenges, buying a hodgepodge of businesses ranging from television stations to an economic forecasting firm. Then, in 1982, he was diagnosed with prostate cancer. With his sons too young to take over and his medical prognosis grim, he decided to sell.

With two blockbuster transactions in 1984, he got rid of nearly everything: 12 consumer magazines went to CBS for $362.5 million and 12 trade titles went to Rupert Murdoch for $350 million. All that remained was a handful of money-losing computer magazines, including PC Magazine and PC Week.

The period surrounding the 1984 sales was a tumultuous and painful time for Ziff and those around him. With his cancer in remission but not cured, he moved fitfully to re-build his business around computer publishing.

Several young executives came and went. An ambitious 1985 effort to start a daily computer newspaper was an embarrassing failure.

People whispered that his illness wasn’t the real reason he had sold off his company.

For Ziff, the criticism and speculation--while legitimate in certain respects--failed to acknowledge the crushing implications of cancer.

“People don’t know what it’s like to be in a life-threatening situation,” he says. “You look to other people to shoulder your burdens.”

He had always thought that dying young would be a form of failure. His recovery, now complete after a nine-year battle, was “a true miracle,” he says. And his achievements in rebuilding Ziff (without using any of the money from the selloff) show he hasn’t lost a step.

The new Ziff--with revenue in the neighborhood of $1 billion--is very different from the old.

The core is still the magazines: Seven domestic computer titles account for about two-thirds of sales. Riding the phenomenal growth of the personal computer business, Ziff has overtaken archrival International Data Group as the largest U.S. computer publisher.

Ziff has set itself apart with some of the same strategies that worked for its earlier publications: a rigorous focus on products, including extensive technical testing and side-by-side comparisons; a willingness to spend heavily, especially on editorial, and forgo short-term profits; and development of a crack advertising sales force that often knows more about the marketing issues facing a computer company than the company itself.

The result is a group of magazines that are must-reads for computer buyers of all stripes--and enormously influential in determining the fate of products and companies.

In recent years, Ziff has been expanding aggressively in new businesses: electronic publishing, conferences and trade shows and the training industry. It has also seized opportunities in magazines, launching titles overseas, where International Data Group has long been a major force; buying a pair of video game publications, and developing a computer magazine insert for Sunday newspapers.

The new Ziff in many ways is more a part of the West Coast personal computer industry than a part of the New York publishing world, and that’s part of the reason the company last year came close to moving its headquarters to Colorado.

But Bill Ziff feared it would be too isolated there. And when the state failed to approve financial incentives that would defray Ziff’s costs and help attract other media companies, the move was aborted.

Still, being part of the computer world has had a profound effect on Ziff-Davis, infusing it with the workaholic ethos of high-tech. That has reinforced a widely held perception of the firm as arrogant and unforgiving.

“There’s a willingness to chop people off at the knees if something is not contributing to this year’s profits,” says one disgruntled Ziff manager.

Some of the criticism is a result of recent projects that went sour--notably a magazine called Corporate Computing that was killed shortly after launch.

More broadly, though, the company is entering a new phase, one that stresses profits and management efficiency rather than revenue growth.

That’s a big change, as Bill Ziff’s philosophy has always been to spend lavishly on quality and let the profits take care of themselves. So dramatic is the new frugality that many believe the family is trying to clean up the balance sheet to prepare for the sale of assets, with two Macintosh publications cited as the likely candidates.

Ziff states categorically that no sales are in the offing. The new attitude, he says, is a logical and timely corrective, in the spirit of the parsimonious 1990s. “My son asked me: ‘Dad, are we snobbish? Is profit a dirty word around here? Is it downscale to ask if this is efficient?’ ” he recounts.

Dirk Ziff, recently graduated from Harvard Business School and now vice president of operations of Ziff-Davis’ domestic publications, confirms that he has advocated a more bottom-line approach.

“Hyper-growth has been replaced by more normal growth, and it makes sense at this point that we should be managing our success,” he says. “Dad has always looked to the long term, and our view is the long term has arrived.”

A generational change is clearly under way. Several longtime Ziff executives have recently stepped aside. Eric Hippeau, 47, who was recruited away from IDG in 1989, was recently named chairman and CEO of Ziff-Davis, and Bill Ziff says he fully expects Hippeau to run the parent company eventually.

And then there are the youthful family members. Dirk Ziff is more oriented toward management issues and finance, while brother Robert is a technical whiz who has been involved in company projects for years--and graduated first in his class at Cornell Law School. Their cousins and co-owners, Jim and Paul Stafford, are also making their way up Ziff’s executive ranks.

Bill Ziff says he is counting on friends and family to help him decide when to step aside. “I wouldn’t want to overstay my leave,” he says.

For his sons, who admire him greatly, the one subject area where Bill Ziff doesn’t know what he’s talking about is his own retirement. “The general view is that his opinion is worthless on this matter,” says Dirk.

He’ll have plenty to keep him busy when he does decide to go. With his second wife, Ann, Ziff collects art, and he is a quiet but committed environmentalist.

There are major challenges ahead. Sources say Ziff’s recent forays into the European market have strained the company’s cash reserves. The computer business changes extremely rapidly, with small missteps quickly turning into big problems. Powerful competitors such as IDG are poised to take advantage of the slightest slip.

Still, if Ziff’s goal was to build something to pass on to his progeny, he can count himself a proud father in more ways than one.

Where PC Means $$

After totally reconstituting itself in the mid-1980s, Ziff-Davis Publishing Co. has emerged as one of America’s fastest growing magazine publishers. The firm’s titles include PC Magazine, PC Week and Computer Shopper.

Ziff-Davis U.S. Advertising Revenue (in millions)

1985: $70.5

1986: $102.8

1987: $164.0

1988: $247.5

1989: $326.8

1990: $436.0

1991: $508.0

1992: $661.9

Source: Adscope

Top 10 U.S. Estimated Revenues Magazines, 1992 (in millions of dollars) TV Guide $882.1 People 582.2 Time 446.0 Sports Illustrated 437.7 Reader’s Digest 428.2 Parade 328.0 Newsweek 310.0 Better Homes & Gardens 302.1 PC Magazine 281.4 Good Housekeeping 269.4

Source: Folio magazine