JCL Blog

The Problem with Specialty Publishers

The technology industry, like every industry, has a group of publishers serving it.  These specialty publishers are facing even more pressure than the publishing industry overall and it is showing in the quality of their reporting -- particularly when they are reporting on their advertisers.  Take this example from Channel Insider yesterday:

The Story:  

Starting with the headline: "Tech Data's Recession 2009 Strategy Pays Off" Jessica Davis quotes Tech Data's CEO Bob Dutkowsky as saying the company's fourth quarter was exceptional.  She goes on to paint a picture of Tech Data just as Tech Data presented themselves to her.  The main points:  Tech Data's revenue was up in a down market; Tech Data's profits were up; Tech Data walked away from undesirable business.  From the article you gotta think that this Bob Dutowsky is one amazing CEO.

The Rest of the Story:

So let's dig into the numbers a bit. Q4 Revenue:  As reported in Channel Insider, Tech Data's Q4 revenue was great:  $6.28B vs. $5.71 -- and increase of 10% over the previous year. The other three quarters were all down 18%, 16%, and 8% for a total of the year including the killer Q4 of DOWN 8%.  The article says revenue was UP 8.2% even when accurately stating the revenue figures.  I take this as an indication of just how far the author was swept away by the press release, and the fact that no one else read the article before it was posted.  The rest of the industry was down 1.8%.  Ingram Micro (IM) was down 14% and Synnex (SNX) was down 1%.  So Tech Data is doing better than some, worse than others, and worse than the industry.  To their credit, they did pull out some pretty good net income in a tough environment.  

It appears that the investment community looked at the data instead of taking Channel Insider's reporting at face value because the stock fell about $3 on the earnings announcement on 3/2. Eric Savitz at Barrons on 3/2/2010: "Tech Data: Q4 Beats; But Stk Slides As Q1 Outlook Disappoints"

If these publications are going to survive a good place to start would be better reporting.

Parallel Universes

Anyone in tech not watching Cranky Geeks is really missing out.  In the past few weeks, John Dvorak and Sebastian Rupley have become the new Smothers Brothers with the straight man - slow guy routine.   Of course they claim to be covering the tech news, and they do regularly have good guests, but it is much more entertainment than anything else.

Now I don't know if either of the geeks has any musical talent, and their humor is certainly not  as widely appreciated, but I find myself busting up every time John Dvorak asks who Om Giga is.  One could say the Cranky Geeks are a parallel universe of the Smothers Brothers show.

This brings up something I wonder about often.  Of the people that participate in the technology industry we seem to have a few parallel universes.  Three that I think about are the Channel, the Geeks, and the New Media.  People and companies often operate in more than one universe, but sometimes it surprises me how much distance there is between them.  

The Channel is concerned mostly with how technology products are sold to businesses and the discussion is usually around the channel partner programs of the main vendors and how the go to market propositions differ from vendor to vendor.  The leading commentators are Everything Channel and Channel Insider and the leading association would be CompTIA.

The Geeks are concerned mostly with the technology itself and the discussion often revolves around new product launches, technology standards, and how the makers of the products are getting along.  The commentators include PC MagazineTechCrunchCnet and the leading association would be CEA.  The Cranky Geeks are probably in this group and maybe Robert Scoble and Leo Laporte.  I sometimes cannot decide where those guys actually fit.

The New Media are the bloggers and maybe some institutions like the New York Times.  The discussion in this group is mostly about how technology is changing the way we consume information and the impact on the newspapers, TV stations, movies, music, and ultimately our society. The commentators include Jeff Jarvis, Dave Winer, David Weinberger, and many others of course.  

As a follower of people and organizations in all three universes I am often struck by how the conversation in one universe can be disconnected from the others.  I will be writing more about this phenomenon and would be very interested in comments on your experiences.