SAN FRANCISCO -- Technology publisher
International Data Group
has aborted its grand plans to create and spin off a giant Web portal, putting off the hopes of scores of employees hoping to cash in on an Internet IPO.
President and CEO Kelly Conlin announced the bad news in two meetings Thursday morning, according to three sources that attended the meeting. IDG executives declined to return repeated calls to its offices.
IDG, a Boston-based media conglomerate that owns a raft of computer magazines, a research firm, a conference unit and the "For Dummies" book publisher, had been
setting up an Internet division with an eye on an IPO later this year. As print competitors like
and new media upstarts like
took the lead in online tech content, IDG has been under pressure to devise a more potent Internet strategy. The mega-portal was supposed to address those concerns.
The venture had received high-level support from Patrick McGovern, the company's 62-year old founder and chairman, who said earlier this spring in the
that IDG might spin off four or five IPOs in 1999, including one that grouped together its network of Web sites. In a May 26 article in the
San Francisco Chronicle
, CEO Conlin said the venture, code-named
Web IDG Networks
, would roll up IDG's 240 Web sites into one mega-portal.
"The whole thing fell apart," says one IDG employee who attended the meeting.
Rather than lump all of IDG's online properties into one mega-portal, the new plan is to create three separate units, a strategy that one IDG executive said will push back IPO plans. One prong will contain the online versions of IDG's enterprise magazines such as
. Another will include
PC World Online's
properties. And the third centered around IDG's gaming unit
Insiders say the move is a defeat for Conlin, who had been the chief champion of the all-in-one venture within IDG. "The big question is, how long can Kelly Conlin realistically stick around?" says one IDG employee.
At the meeting, Conlin announced the resignation of Thomas Gewecke, the publisher of
PC World Online
and the CEO and major champion of the new business unit. Gewecke, one of IDG's golden boys who led its Internet efforts by growing
PC World Online
into a formidable computer site, will stay on to the end of the month to help "lead the transition."
president Laurie Morgan is also leaving the company, say sources.
The shift in strategy is also likely to trigger a wave of defections from the company's rank and file. IDG was hoping the Web IDG venture would help stem a brain drain. Over the last few months, the company has lost
President Rich Marino to CNet,
top salesman Bob Carrigan to
president Jim Martin to
Insiders expect the news to spark further defections among IDG's remaining 170 employees. "The general feeling is that there'll be nobody left here in a month," says one employee of Web IDG. "People have stuck around here for a year thinking that they were going to be working for an Internet company."
"I really don't think they understand the ramifications of any of this. They still think IDG is a great place to work," laughed one employee. "Most people weren't that happy before April."