Ziff-Davis Spins Off Online Unit to Eager Investors

Ziff-Davis Inc. spun off its online unit Wednesday and watched investors log into the Internet stock as quickly as they exited shares of its parent, a media and marketing firm known for its traditional computer-related publications.

The offering created the biggest gainer on the New York Stock Exchange and nearly the biggest loser, throwing a spotlight on enthusiasm for digital firms and a lack of loyalty to the analog companies that built them.

Ziff-Davis’ stock fell more than 25% to close at $21.50. Shares of its online offspring, ZDNet, soared 89% to finish at $36. Ziff-Davis sold about 16% of ZDNet in an initial public offering of 10 million shares at a price of $19.

Steve Harmon, an analyst with online investment report Internet.com said the euphoria surrounding ZDNet and recent Internet IPOs such as IVillage and MiningCo.com show enduring investor demand for digital assets.

“The Internet is no longer a toy or a division in the back room, it’s everyone’s business,” he said.