In its second-largest acquisition, Amazon buys the company for $970 million.
Many of the products in the company that used to publish Internet Retailer have been shut down as management seeks short-term profitability. Here, the long-term vision and commitment to products and people are still alive, and Internet Retailer’s very existence is proof of that.
Internet Retailer was introduced in 1999 by Faulkner & Gray, a company I started 20 years ago with one newsletter. F&G; grew into an $80 million publisher with two dozen magazines, many started from scratch and built into leadership positions in financial and health care markets. Recent F&G; start-ups had bright prospects in electronic commerce and data networking. I was privileged to lead a team of dedicated managers, who crafted growth strategies they executed with brilliance. Most had been associated with Faulkner & Gray for a decade or more. When I left F&G; two years ago, after purchasing Internet Retailer and starting a new company to publish it, it was like parting with family.
I left after I became convinced that the publishing conglomerate that owned F&G; no longer wanted to nourish publications aimed at new markets. The events at F&G; since my departure support this conviction and strengthen my belief that entrepreneurial managers rarely find safe harbor in large corporations. I am certain that Internet Retailer, which receives frequent praise for the useful information it provides, would no longer exist if it had not been rescued from Faulkner & Gray.
This conclusion is inescapable when you understand the sad demise of Faulkner & Gray. For two years I watched as F&G;, once my pride and joy, was gradually dismantled by its corporate parent. In wave after wave of reorganization, virtually every senior manager I relied on to build Faulkner & Gray was terminated. Promising products that looked to future markets, such as e-commerce, were shut down because they failed to scale today’s margin hurdles. In the process many of the company’s brightest editors and sales managers were put out on the street. A thriving corporate culture, dedicated to identifying new markets and creating publications to serve them, was destroyed.
Indeed, Faulkner & Gray itself no longer exists, having been merged with a half-dozen other publishing entities that likewise lost their identities in a search for efficiency. This unnatural assemblage of unrelated products was put up for sale last year, but when buyers looked at the hodgepodge that had been thrown together in a recession, they walked away. Now, the senior managers who oversee F&G;’s remaining businesses are less familiar with them and the people who run them. What once was a great place to work-F&G; veterans will tell you it was the best job they ever had-became a fountain of cynicism.
Why did this happen? The corporate explanation is surely that consolidation of many businesses into one focused on core products is more efficient. I prefer other explanations that are all too familiar to those who watch large companies destroy the long-term promise of businesses they acquire. It happened because senior executives of F&G;’s parent were not as committed to trade magazines as they were to other publishing properties. It happened because it is easier to kill fledgling products in a recession than endure start-up losses, especially when those losses are written off below the line that reads “profit from continuing operations.” It happened because corporate managers often choose short-term profits over long-term market values and the welfare of loyal employees who built the businesses being put on the chopping block. It happened because big corporations have no stomach for recessions nor the courage to weather them whilst protecting their most important resources-the human ones.
I exchanged that corporate environment for this entrepreneurial venture I own in partnership with friends of long standing. Here, the long-term vision and commitment to products and people-once a hallmark at Faulkner & Gray-are still alive, and Internet Retailer’s very existence is proof of that.