Ziff Davis Media, publisher of PC Magazine and owner of a number of videogame Web sites, emerged from Chapter 11 bankruptcy protection on July 1. In the saga that has ensued since Ziff Davis Media was acquired by private equity firm Willis Stein & Partners in 1999 for $780 million, that milestone qualifies as good news.

In a statement issued in the spring, Ziff Davis Media CEO Jason Young, who declined to be interviewed for this article, said: “We are poised to capitalize on the recent digital momentum that we are experiencing, as shown through the unique visitor growth in the first quarter, which grew by more than 20% over the first quarter of last year. We look forward to emerging quickly from Chapter 11 so that we can put our complete focus on operating our business and continuing our strong digital momentum.”

The bankruptcy agreement, which was approved by the U.S. Bankruptcy Court for the Southern District of New York, converts $428 million in Ziff Davis Media's debt to new common stock in the company and a new note of $57.5 million. The agreement also provides that Ziff Davis Media will have access to as much as $7.5 million in working capital after its emergence from bankruptcy.

With that working capital, Ziff Davis Media is hopeful that it may operate without a crushing debt load for the first time since its acquisition in 2000. That acquisition was hampered from the beginning by the decline in technology print advertising, which became precipitous in 2001, and by Ziff Davis Media's peculiar Internet situation, which left a large portion of its Web properties in the control of CNET Networks. The arrangement left Ziff Davis Media hamstrung in creating an Internet strategy in that critical time frame.

Young is optimistic about Ziff Davis Media's Web position as the company looks ahead. “As a result of our employees' hard work, we ended 2007 on a strong note,” he said in a previous statement. “We matched audience growth with impressive digital revenue expansion. And while the print market continued to be challenging, we continue to be print category leaders in the markets we serve.”

PC Magazine saw its ad pages dip 13.2% in the first quarter compared with the year-earlier period.

Growth, observers say, must come from Ziff Davis Media integrating its print, online and event properties.

“First, as they emerge from bankruptcy, certainly their balance sheet is much stronger,” said Roland DeSilva, managing partner of media investment bank DeSilva & Phillips. “With a strong balance sheet, they are able then to take advantage of the audience they have their hands around. ... Now serving that audience electronically is the only possibility for them to be a strong, viable content provider. That's pretty much the story for every b2b publisher.” M