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The Almighty Buck

ZDTV sold to Paul Allen's Vulcan Ventures 49

We had a press release submitted confirming the fact that Paul Allen's venture firm has purchased ZD-TV from Ziff-Davis. Yes, for a mere $204.8 million US, you too can own The Screensavers. Click below to read the details.

From ZD

As the following press release announces, Paul Allen's Vulcan Ventures is purchasing ZD's interest in ZDTV. We are very happy with the price offered for ZDTV and view this as a significant accomplishment in the process of increasing value for shareholders of Ziff-Davis. Vulcan Ventures is quite familiar with ZDTV given its investment in our cable channel earlier this year. We believe this familiarity, coupled with the continuing joint programs between ZDTV and other divisions of ZD, will provide for a smooth transition and a bright future for ZDTV and its dedicated and talented employees.

We anticipate that the transaction will be completed in 45 days, at which time more details will be available. Meanwhile, join me in congratulating all members of the team who worked on this very exciting agreement. Congratulations also to our outstanding colleagues at ZDTV who have built a tremendous cable TV business in record time and who will continue to amaze us with what they do next!

Eric Hippeau


Contacts: Investors Media For Vulcan Ventures Robert Borchert Evan Goetz Susan Pierson-Brown Ziff-Davis Inc. Morgen-Walke Associates Vulcan Ventures, Inc. 212-503-3505 212-850-5639 425-453-1940


Completes Another Step in Strategic Alternative Process to Unlock Shareholder Value

New York, NY, November 19, 1999 -- Ziff-Davis Inc. (NYSE: ZD and ZDZ) today announced that it has signed a definitive agreement to sell its 64% interest in ZDTV to Vulcan Ventures, Inc., the investment organization of Paul G. Allen, for $204.8 million. The transaction is expected to be completed within 45 days, subject to regulatory approvals.

The agreement values the fast-growing cable network at $320 million. ZDTV is distributed in more than 14 million U.S. homes, and is expected to reach approximately 16 million U.S. homes by year-end. ZDTV is currently offered through 88 cable operators and more than 400 cable systems, as well as through both major satellite companies, DirecTV and Echo Star.

"Vulcan Ventures understood the potential of ZDTV early on, having acquired a 33% stake in the cable channel nearly nine months ago. Their early investment provided Vulcan with the opportunity to see firsthand the unique position that ZDTV now enjoys in leading the convergence of the Web and television programming," said Eric Hippeau, chairman and CEO of Ziff-Davis Inc. "This announcement is also an indication of the progress Ziff-Davis continues to make in its plan to maximize value for our shareholders."

ZDTV will continue to maintain certain business agreements with ZDNet and ZD Publishing following completion of the transaction. These beneficial relationships include agreements that cover a joint news organization, and co-development, promotional and audience development programs.

"ZDTV is a tremendous addition to Vulcan's portfolio of companies," added William Savoy, president of Vulcan Ventures, Inc. "ZDTV?s management team combines a broad base of cable programming, entertainment and Internet expertise to cover the continuing rapid convergence of technologies every day. ZDTV fits well with the portfolio of businesses that Vulcan is building."

About ZDTV ZDTV is the first 24-hour cable TV channel and integrated Web site focused exclusively on computing, technology and the Internet. ( enhances and encourages viewer interaction through e-mail, live chat and video mail. Through its 3Com Netcam Network, ZDTV?s channel and Web site have created an integrated community that appears on air and contributes to ZDTV?s programming. In addition, ZDTV radio can now be heard in both RealNetworks and Windows Media formats. Its features are also heard on 75 AM and FM U.S. radio stations and internationally on 600 stations in 140 countries through the Armed Forces Radio Network.

>From its digital, state-of-the-art studios in San Francisco, ZDTV produces 23 hours of weekly, original programming ranging from daily industry news to features on emerging technologies. ZDTV appeals to a wide range of viewers and users -- from the computer novice to the technologically advanced -- with shows including Big Thinkers, Call For Help, Computer Shopper, Fresh Gear, GameSpot TV, Internet Tonight, Silicon Spin, The Money Machine, The Screen Savers and ZDTV News.

About Ziff-Davis Inc. Ziff-Davis Inc. is a leading media and marketing company focused on computing and Internet-related technologies, with principal platforms in print publishing, trade shows and conferences, online content, television and education. Ziff-Davis provides global technology companies with marketing strategies for reaching key decision-makers. Ziff-Davis has two series of common stock, one which is intended to track the performance of its Internet business ZDNet (NYSE: ZDZ) (, and one which is intended to track the performance of the ZD Group (NYSE: ZD), which includes print publishing, trade shows and conferences, online learning and television businesses, and a retained interest in ZDNet.

About Vulcan Ventures, Inc. Vulcan Ventures, Inc. of Bellevue, Washington was founded by Paul G. Allen in 1986 to research and implement his investments. Through Vulcan Ventures, Allen invests in companies that offer products, services or technologies that fit his Wired World strategy and can contribute to or benefit from the technology and strategy of other companies within the group's extensive investment portfolio. In addition, the group owns Charter Communications, the fourth largest cable operating company in the United States with more than 6 million subscribers. Recent investments include those in innovative content (e.g. Oxygen Media, ZDTV), Internet and e-commerce (e.g., eGreetings, Go2Net,,, telecommunications (e.g. Allegiance Telecom, High Speed Access, InterNAP, NorthPoint Communications) and consumer device and service companies (e.g. Replay Networks, TiVo, and Wink Communications). William D. Savoy is president of Vulcan Ventures and represents Allen in his professional and personal financial transactions as well as manages the Vulcan investment analysts who investigate and secure investment opportunities. Allen remains chairman of Vulcan. For more information on Vulcan visit

This release contains forward-looking statements that are subject to risks and uncertainties. Although Ziff-Davis Inc. believes that the expectations reflected in its forward-looking statements are reasonable, actual results could differ materially from those expectations. Important cautionary statements and risk factors that would affect actual results are discussed in materials filed by Ziff-Davis Inc. with the Securities and Exchange Commission, including under the caption "Risk Factors" in the Registration Statement on Form S-1, which became effective March 30, 1999, and the Form S-3, which became effective October 29, 1999. Holders of ZD Group Stock and ZDNet Stock are common stockholders of Ziff-Davis Inc. and are subject to the risks associated with an investment in Ziff-Davis Inc. and all of its businesses, assets and liabilities. Although Ziff-Davis Inc. has hired Morgan Stanley Dean Witter to explore strategic alternatives to maximize shareholder value, there can be no assurance that any transaction will result from that exploration process.

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ZDTV sold to Paul Allen's Vulcan Ventures

Comments Filter:
  • Look at the time frame.

    I believe that the press release above stated the process would take 45 days.. Hmm.. How long till Jan. 19th? (I think that was the date)

    Seems mighty snug and cozy.. :-)

  • Yeah, I stopped caring about them when the "core 6" left... (Drexler, Porter, Kersey, Duckworth, Williams, and Robinson.) Yeah, they're good, but the lockout pretty much killed the rest of my interest in the NBA in general. I'm just happy that Clyde got to spend his final NBA years in a championship team (and his hometown,) and he's now coaching his alma mater.
  • Yes! When I first saw the title, I too thought it said, "Vulture Ventures."

    I guess the pickings are good for Paul Allen.
  • Well, I would assume that since he owns the fourth largest cable company in the US, he could greatly expand the reach of ZDTV, thus making it much more profitable. The guy is no dummy.

    By the by, am I the only one who finds Kate from the Screen Savers repulsive? ZDTV was at my local mall, so I told them what I thought of her. They told me that she was one of the most popular people on their staff. Shame on you geeks!

  • I think I've figured it out.
    Look at the facts:

    Paul Allen is funding Transmeta
    Transmeta has just given a release date
    Transmeta is promising an announcement in January
    Paul Allen buys a TV station which features a lot of tech stuff
    Airtime - lots of it - will be critical to Transmeta beating the ix86 in the mindshare stakes
    Conclusion :- ZDTV will be a major marketing vehicle for Transmeta, featuring and advertising the product at every opportunity, in a gamble to build up the market before the release.

    That's actually an extremely good theory! I had forgotten all about Paul Allen funding Transmeta until I read this. That would be a damn good idea from a marketing standpoint, you can pimp your own product and deny companies like intel advertising on your channel. Bloody good show Paul!

  • Hm...Maybe ZDTV won't suck as much anymore. I'm sure you've all heard my thoughts on ZD's "thoughtful and objective reporting." Reasons for my hatred of Ziff-Davis:

    1. Ever noticed how advertised games in EGM ever get the highest reviews?

    2. John C. Dvorak is a complete idiot. Since when was Linux "not appropriate as an important server"? Gee, it only runs 15% of the Web, it's gotta suck pretty hard.

  • Holy rumor mongering batman!

    Sorry to break it to you, but most of Paul Allen's investments recently (read: since 1986, when he semi-retired from Microsoft) have had NOTHING to do with Microsoft. I mean, come on, how much do the Portland Trailblazers, the Seattle Seahawks, and the Jimmy Hendrix Museum have to do with MS? No, Mr. Allen is just a rich guy who likes to invest in tech companies, and he's done it for years now. With no connection to MS other than his fortune. In fact, the last time I saw, less than half his market value is locked up in MS. Mostly it's in his newer tech companies, like Starware (which owns Infoseek and therefore part of, as well as running a bunch of sports websites [ESPN, NBA, WNBA, NHL, NFL, NASCAR, ABC Sports])

  • Paul Allen is not really associated with MS all that much anymore, other than being a major stockholder. He was not purchasing ZDTV on behalf of MS if that is what you were wondering.

    I truly hope that they can keep some kind of journalistic integrity and control away from Paul.

    That would imply that ZDTV had journalistic integrity to begin with. Most of the shows on there are complete trash, tailored to the lowest common denominator. Besides, Paul has done some really cool stuff. (and he even plays in his own rock band!) Much more so than Bill Gates or MS has.

    Although there was that fiasco with the new Seahawks stadium, which I can't really forgive him for.


  • "Why would *anyone* want ZDTV?" should be the question. My understanding is that it's programming is only on the air a few hours a day (usually at 2AM) in certain markets. I thought the whole thing was going to get shut down.

    Also, note that unlike some ZD publications, ZDTV is not aimed at a technical audience at all. It's target audience seems to be newbies who don't know what RAM and FTP are and can't decide if their iMac should be purple or green.

    (This makes it difficult to use as a propaganda engine. Sure they could tell all three viewers they have to call their congressman and advocate "The Freedom To Innovate", but certainly the prime MS customer base of MIS Manager types aren't watching this show.)
  • Whoa now! MSNBC constantly goes out of its way to point out MS faults. They indeed often overcompensate in their effort to be LESS biased than other, non-MS media ventures because of the affiliation. When something goes wrong in the DOJ trial, or some new MS fault is discovered, MSNBC usually has it first and are often the only major outlet to run it.

    'Pointing your finger for no good reason is a good way to get it broken.' one of my elementary teachers.

    Additionally, Allen has little, if nothing to do with MS these days. (Other than being a shareholder)
  • Still, nothing beats a nice, juicy anti-Microsoft rumour. I know Paul Allen barely pays attention to Microsoft.

    The MSNBC thing, however, I heard from a not completely unreliable source.
  • I hope that this change is for the better. I really like ZDTV. And fire that John C. Dvorak hes such a loser.
  • I tried for awhile, and when I found out that the kernel supported the BTV chip that the 3com Netcam uses, I couldn't find any Linux compatable alternative to MS Netmeeting, which they all use on ZDTV. I couldn't bare having to boot Winblows to use a frekin Netcam just to get on ZDTV.

    Never Surrender!

    Windows NT has crashed,
    I am the Blue Screen of Death,
  • "How many cable channels does one man really need?!"

    Perhaps you should ask Ted Turner. He owns about a billion or two cable chanels at last count, three-fourths of which are showing poorly-colorized movies as we speak.

    - A.P. (Am I the only one who thinks that the early-80s "marvel" of colorization should stay forgotten? Did people all really look like fleshy pink fetuses in the 1920s?)

    "One World, one Web, one Program" - Microsoft promotional ad

  • Speaking of the NBA, have you noticed that the Portland Trailblazers are the hottest team in the NBA right now? Given the fact that Paul Allen used the proceeds from the sale of Microsoft stock to buy the Trailblazers, I can just see the gripes and complaints about the NBA Championship being "bought with Microsoft 'money' " (shrug).
  • "The only thing we have to fear is fear itself. -JFK"

    FDR, not JFK. Those who fail history are bound to repeat it.

  • Good point! UPN would be a nice fit, and like you said, it's available. Hmm...

    Then he'll own the network that shows ST:Voyager and Dilbert, for starters...

    Assumably then he can improve on Dilbert's ratings, since they have nowhere to go but up. For last week (November 8-14) Dilbert was the least watched primetime network show. And it was a new episode! Doesn't look like scheduling Dilbert against Buffy the Vampire Slayer is such a good idea...

  • by Mooset ( 9986 )
    Why does Paul Allen even want ZDTV? I'm sure he must have some partial ownership in MSNBC, which runs plenty of tech related stuff. How many cable channels does one man really need?!

    On a semi-related note (well not really, but I'm gonna say it anyway), didn't I hear something about ZD being purchased by some Japanese company a few months ago? I can't seem to find anything about this... anyone have a URL with the details?

  • Yesterday's (Rochester, NY) Democrat & Chronicle reports that ZD is selling ZD Education (based in Rochester). Are there other units being sold off?

    ZD only bought ZD Ed about 2 years ago. The company was previously called Logical Operations, so all ZD's local advertising actually refers to the company as "Ziff Davis Education, Formerly Logical Operations" :-)
    "I am not trying to prove that I am right... I am only trying to find out whether." -Bertolt Brecht

  • Oh, wait. They already do that with NBC/MSNBC.

    Too bad... I have to admit that I was somewhat addicted to ZDTV. I truly hope that they can keep some kind of journalistic integrity and control away from Paul. I doubt it though. I'd suspect that all negative M$ pieces probably have to get the stamp of approval from Paul directly.

    Oh, wait... wasn't he investing in a cable company too?

  • I like the idea of network about computers; I don't know why, since it's probably the most perverse notion I've seen in the last few years, but still....

    The only problem was that it was run by ZD. It's not so much that they're bad, it's just that the Amish know more about computing than ZD ever will, and probably do a better job explaining it. (Watch ZDTV News. *snicker*) I'd be happy if anyone took over--even MS, at this point--and actually transformed it into something that could rival, um, anyone, in tech news.

    Realistically, though, there's even odds (heh) that this will utterly destroy the network. If Kate and Leo leave, they'll probably lose 90% of their audience.
  • I like ZDTV much in the same way I like some of the more "out-there" religious programming.... you know like sc*ntology commericials, or "The Pagan Invasion"...(if anyone remembers that!)

    It's funny and incredibly aggrevating at the same time.
  • It seems that Paul Allen has been buying or venturing into the Multimedia, [Tele]Communications and high technology fields lately. Could it be that he wants to find a niche to show that he is better than Bill Gates in some manner?

    I agree that ZDTV isn't the best channel or property, but to some people, it's something that many wanna-be geeks want and like.
  • I seem to recall that Allen's been distancing himself from MS for the past few years (at least). Perhaps I'm mistaken, but off the top of my head I can't remember him doing anything to help MS recently.
  • mere1 (mîr)
    adj. Superlative merest.

    1.Being nothing more than what is specified: a mere child; a mere 50 cents an hour.
    2.Considered apart from anything else: shocked by the mere idea.
    3.Small; slight: could detect only the merest whisper.
  • Isn't he still the second largest shareholder and on the board? Anyways, I hope you're right.
  • by vlax ( 1809 ) on Friday November 19, 1999 @07:41AM (#1519045)
    ...that MSNBC is about to get the ax. Apparently, it's not stealing much audience from CNN and is deep in red ink. The MSNBC website is more successful in many ways than the channel - it's certainly linked to a lot.

    Perhaps this is an attept by a computer company to get control of a more relevant traditional media operation. ZDTV certainly fits Microsoft's interests (and thus Paul Allen's) better than MSNBC does.

    Perhaps Paul Allen is simply setting ZDTV up to be bought by Microsoft after the anti-trust thing blows over. Certainly, it would be a public relations disaster for Microsoft to buy a TV channel now while it's in court, but control over ZDTV - directly or indirectly - makes a lot of sense for Bill Gates.
  • While MSNBC's audience isn't at CNN levels (they're on a lot less cable systems), their audience is a lot richer on average than CNN/Foxnews. Richer audience = advertising premium = more money for BillG.

  • What? I thought Paul Allen had nothing to do with Microsoft anymore? Isn't he just really rich because he was smart enough to keep his MS stock after Gates backstabbed him or something?

    We cannot reason ourselves out of our basic irrationality. All we can do is learn the art of being irrational in a reasonable way.
  • So, will this tasty new edition to Vulcan Ventures be called Vulcan TV, "All Vulcans, All the Time" or Pual TV in a fit of extreme egotism?
    Enquiring minds want to know. How about a 24hr technology and Star Trek channel?
  • "Paul Allen's Vulcan Ventures" as "Paul Allen's Vultures"? If so, did you reread it, only to read it the same way again?
  • The company is called Softbank. Search +softbank +ziff-davis to find a few hits. Here's one Softbank also owns shares in pretty much all the other net companies like Yahoo! and Etrade for example.
  • I like ZDTV much in the same way I like some of the more "out-there" religious programming.... you know like sc*ntology commericials, or "The Pagan Invasion"...(if anyone remembers that!) It's funny and incredibly aggrevating at the same time.

    I know EXACTLY what you mean. You know that show on the TBN "superstation" called "Praise the Lord"? Sometimes I would watch that transfixed, unable to turn my head away as I screamed silently in my mind: "NOOOOO!! Don't you guys realise how DUMB you are????"

    Example: one day the show started out with a couple ditzy co-hosts - a man and a woman. After every sentance they would look down, half close their eyes and praise His holy name (I believe the subject was the incredible beauty of the state of Oklahoma) as they kept agreeing with each other about everything. Then the fun started. They brought out a guest who had the following credential: he was a Scientist (you know, one of those smart, scary people who usually like to intimidate good, decent god fearin' folk with their fancy theories and equations and papers) who used to believe in evolution until he reasoned it out and saw the Light. Of course, I wasn't going to turn it off now! I was anxious to hear his line of reasoning that put evolution to such shame.

    He didn't dissapoint. Here is a sample of his explanation (as well as I can remember it), which I swear I am neither making up nor embellishing:

    Noah's Great Flood served to lower the air pressure of the Earth's atmosphere to it's present day levels. In the early days of the Old Testament, the air pressure was much higher. Since higher air pressure means more oxygen, people could live much longer back then. This accounts for the very long lives of people in those early days...

    And it went on and on with a lot of stuff I forget.

    ZDTV can give me exactly the same kind of perverse fascination. I'll watch their "Silicon Spin" show as John Dvorak brings on a panel of "pundits" to offer their profound insights into the future of technology. Usually these people are fairly clueless, and when they have somebody good that person usually doesn't have the time to say what they want to say. In a half hour show (about 20 mins of air time) they will tackle 4 or 5 different topics. That's enough time to briefly introduce the topic, go twice around the table for opinions, and then have Dvorak cut them off and go to a commercial break. Funny that a network that plays reruns of earlier shows constantly can't give them a little more time.

  • Why wouldn't a large multiple systems operator like Charter Communications want to own a source of programming? You'd be surprised how many cable companies own bits and pieces of cable channels. One of the posters in this thread mentioned Ted Turner and his cable channel empire; Turner actually sold the channels to Time Warner [], which also operates as a cable access provider. Time Warner also owns HBO. As for who owns Time Warner, MediaOne Group [] owns 25% of Time Warner Cable. AT&T is buying MediaOne. AT&T also owns shares in the companies that bring you networks like QVC, USA, and Encore, through their subsidiary Liberty Media Group [], which also owns part of Time Warner.

    It's much easier to control the media than to pay fees to other media firms. Programming costs are a major part of cable company expenses. Also, owning media maximizes advertising profits and enables a certain spin on what is shown on TV.

    I'd post more, but it took me an hour to find all this out (I knew it, but I needed proof because my memory is rather...odd...)

    Isn't media consolidation interesting?

  • This is why I wish Paul Allen was in Bill Gates' shoes. Paul does something to give back to technology much more often than Bill does. Paul has supported dozens of smaller companies to promote their growth, and not just so Microsoft can steal from them. Bill just gives money most of the time as a thing called 'Microsoft'.

    This is also why Paul Allen richer than Bill.

    my 5 cents.

  • Bill Gates was too dumb to figure out how to implement the floating point arithmetic in his BASIC interpreter so he thought he'd call up Pauly Boy and get him to do it.

  • by jd ( 1658 ) <> on Friday November 19, 1999 @08:11AM (#1519058) Homepage Journal
    I think I've figured it out.

    Look at the facts:

    • Paul Allen is funding Transmeta
    • Transmeta has just given a release date
    • Transmeta is promising an announcement in January
    • Paul Allen buys a TV station which features a lot of tech stuff
    • Airtime - lots of it - will be critical to Transmeta beating the ix86 in the mindshare stakes

    Conclusion :- ZDTV will be a major marketing vehicle for Transmeta, featuring and advertising the product at every opportunity, in a gamble to build up the market before the release.

  • Years ago, Ziff-Davis published some good magazines, especially the original Popular Electronics (including Electronics World). Then they brought in new people, changed it to Computers & Electronics (basically telling readers interested in Ham radio, CB, Hi-Fi, Video, and several other subsets of electronics to go bleep themselves). It had just enough electronics to scare away the people that bought other computer mags and not nearly enough electronics for the previous readership (who might well have gone for an additional subscription to a separate electronics intensive computer magazine). A magazine that had been around for well over 20 years died in less than 2.

It's great to be smart 'cause then you know stuff.