Most of the assets of Standard Media International were sold at auction today for a combined $1.4 million, plus assumed subscription liabilities.
In an auction in Federal bankruptcy court in San Francisco, AOL Time Warner's Time Inc. agreed to buy the paid subscriber list of the Industry Standard magazine for $500,000, including the assumption of subscription liabilities in the neighborhood of $2.2 million to $2.5 million.
Most of the remaining assets were acquireds by International Data Group, the majority investor in Standard Media, which owned 100 percent of the company until the completion of a $30 million venture capital round in late 1999. IDG agreed to pay $900,000 for the company's Web site, including the technology, intellectual property, trademarks, newsletters and conference arm. IDG also acquired the magazine's controlled-circulation subscriber list.
IDG would not immediately comment on whether it would restart the magazine, continue to operate the Web site or relaunch the Standard’s conference business.
The auction began a little after 10 a.m. PDT in a bankruptcy court in San Francisco, and finished at around 12 noon. No other bidders emerged at the meeting for the paid subscriber list, but IDG had to outbid other potential buyers for the other assets.
At the start of the hearing, Standard Media's attorney announced that the company had agreed to a bid of $150,000 for the assets other than the subscriber list from New Standard Acquisition, a company affiliated with The451, a technology news and information site with offices in London and New York. IDG quickly topped the bid, offering $200,000, which resulted in a brief recess to allow discussion of the new bid by the Standard Media creditors' committee.
Following the break, a new bidder emerged: a Los Altos, Calif.-based startup called Futuredex. The bidding ratcheted up after that. New Standard Acquisition's highest bid was $750,000. The bidding of Futuredex, a startup with $3 million in funding from Tesla Capital, topped out at $850,000.
Futuredex Chairman and CEO Damir Perge, who did the bidding for his company, said he decided to make an offer for some of the Standard's assets Monday morning, shortly before the auction began. He said that Futuredex, which plans to launch this week, would "track the lifecycle of private companies."
Roger Strukhoff, president of the custom publishing division and vice president of business development at Sys-Con Media, a New Jersey-based trade magazine publisher, said his company had offered to buy all of the company's assets. However, Sys-Con’s bid was less than the combined value of AOL Time Warner's offer for the subscriber list plus New Standard's initial offer for the remaining assets - in other words, less than $650,000.
During a break in the hearing, Strukhoff tried frantically to send an e-mail on a Blackberry pager to Sys-Con CEO Fuat Kircaali, seeking advice on whether to make a higher offer. Kircaali was in New York, where Syn-Con was holding a computer-industry trade show. When the hearing resumed, Strukoff had failed to reach his boss, and the company never made a bid at the hearing.
Strukhoff later said in an email that "a non-response from Fuat this morning was our pre-arranged way of him telling me not to exceed what had already been offered."
Martin McCarthy, CEO of The451, speculates that IDG will restart the magazine as a controlled-circulation publication, the model used by IDG's stable of trade magazines.
Standard Media reached 117,000 paid subscribers, more or less, and had a controlled circulation of roughly 90,000.
Standard Media announced the suspension of publication of The Industry Standard magazine on Thursday, Aug. 16. The following Monday, the company laid off most of its 180 employees, leaving a small crew of editorial and business staff in place to operate the company's Web site and search for a buyer. On Aug. 27, the company filed for Chapter 11 bankruptcy protection.
The Standard experienced the same dramatic growth and sudden reversal as the technology companies it covered in its editorial pages. At its height, Standard
