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Mogul on the Verge

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It's reflective of the relative value of glamour over cash that many people who know Jim Dunning are likely to describe him not as someone who has made a fortune for himself in the Yellow Pages business but as the guy who -- with advances from distributors and bank loans closing in -- "saved Jann's bacon" in the seventies when he was the COO and CFO of Rolling Stone. Indeed, what Jimmy Dunning has really wanted to be all along, people say, is Jann Wenner (who hasn't?).

After Rolling Stone, Dunning went briefly to Wall Street, and then, for the first time, to Ziff as a ranking executive. Ziff, in the mid-eighties, was probably the most cash-rich media company in the world. It could have bought anything. And my would-be media mogul saw his job as turning Ziff into a real media-mogul-worthy company. On the executive floor of Ziff's anonymous offices on lower Park Avenue, Jim Dunning prepared the reports and research and tactics and strategy to take over a giant or two. Paramount was his first target; then CBS.

There was a certain comedy to these efforts -- the young would-be mogul preparing his takeover binders on America's premier media empires while other people at Ziff-Davis were buying media properties like Government Computer News -- and soon enough a certain humility. In short order, Dunning was out of Ziff and on Long Island, running a Yellow Pages company -- which certainly sounds like some Dantesque punishment for overreaching in the media business.

In obscurity, Dunning bought and sold two Yellow Pages companies, the first for $160 million, the second for $300 million. ("What ever happened to Jimmy Dunning?" people would say. "Is he still doing that Yellow Page thing?")

I have no insight into whether this was horrible or blissful obscurity. Does making money, big amounts of money, calm your ambition, or does it make it all the more heated, insistent? (He looks at me opaquely when I touch on the question -- then recites the virtues of the Yellow Pages business.)

From his Yellow Pages exile, he bought a media trade publication, SRDS (Standard Rate & Data Service), then made a move on a no-glam (although more glam than the Yellow Pages or SRDS) media company called Petersen, famous (so to speak) for its car- and gun-buff magazines. Not enough of a known media suit himself, he installed a well-known suit, former Hearst Magazines president Claeys Bahrenburg, in the role. Now, if the Yellow Pages were a circle of media hell, Petersen would have to be purgatory. It's a limited-growth market -- you're not going to all of a sudden discover a vast new audience of car buffs or gun nuts.

Dunning, who bought Petersen for $465 million, sold it two years later for $1.5 billion.

Good money, but not an Internet rate of return.

To be a mogul requires a whole different level of play (and courage).

"what matters," dunning says, his hand on mine, "is the depth of your platform." While I have no idea what that means, I sense these are fighting words. For a man without much experience in the technology industry, he's already talking the talk.

Dunning swears me to secrecy on all kinds of potential new start-ups and acquisitions and major new thinking he's planning at Ziff. It isn't that hard, if I let my imagination run, to see Ziff-Davis -- "with its millions of subscribers," Dunning reminds me, "its vast databases, its history of marketing discipline, its incredible brands, its presence throughout the technology industry" -- as a contender for taking over the world. As a matter of fact, as we talk, I find myself with a whole bunch of ideas for putting a little attitude and edge into the Ziff magazines -- a little attitude and edge in this context could be worth billions -- and, if I'm not mistaken, Dunning starts feeling me out about a job.

I get it -- a definite shiver of opportunity running down my spine.

We have a friend in common, though, who says that Jimmy is bullshitting me, that after all these years of making real money, he is not so stupid or silly to want to go for broke this way. "Jimmy," he says, "buys these companies and just spots some outrageous thing that's going on and kills it like a skunk." And then, wham, sells the sucker for a tidy profit.

Maybe. But that sounds very eighties to me -- to be such a hard-hearted, no-nonsense, disciplined numbers guy (remember when the Tisches proudly cut the fat from the Tiffany Network?). Nineties mogul macho is about having a vision, expanding rather than contracting; it's about reinventing the media business and hence the world (and yourself). In the former no-nonsense approach, you look to double or triple or quadruple your money; in the latter vision thing, you're looking to go 30 or 40 or 100 times better. You choose.

I'm pretty sure it's a bad idea to buy computer magazines. They seem clearly a part of the rust belt of the Internet age. On the other hand, I would not have bought them when they were a good idea. But any mogul worthy of serious moguldom has to take a leap of faith (and computer magazines are probably a better bet than, say, fashion magazines).

In the same conversation, our mutual friend reflects, "Jimmy and guys like Jimmy do not believe they can fail." Of course, that describes a lot of people these days.

E-mail: michael@burnrate.com.


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