Newsweek appears to be on the block — again.
According to sources who have been briefed, IAC is sending out inquiries to prospective buyers who may be interested in purchasing the 80-year-old title, which ended weekly publication of its domestic edition late last year in favor of an digital-only format. A revamped Newsweek.com launched earlier this month.
SEE ALSO: Barry Diller Calls Newsweek Purchase a “Mistake”
A spokeswoman for IAC had no comment.
As with the first sale of Newsweek, the price is expected to be negligible; what will matter more is the assumption of liabilities, although Newsweek is a much pared-down operation.
IAC obtained its stake in Newsweek after it merged the Daily Beast with the venerable publication in 2010, under an agreement with investor Sidney Harman, who had recently bought the magazine from the Washington Post.
But all signs are that the publication — which the Washington Post Co. sold for $1 and assumption of liabilities — has been a stepchild to the Daily Beast.
IAC’s Barry Diller last month signaled his unhappiness with the purchase, telling Bloomberg TV that “it was a mistake” to buy the publication and a “fool’s errand if that magazine is a news weekly.” While praising the journalists who work there, he said that he did “not have great expectations” for the digital product.
Newsweek renamed its digital tablet edition Newsweek Global, although print editions still exist overseas under royalty arrangements. IAC is pitching the opportunity to “innovate” a business model, with an emphasis on narrative journalism and plans for one-advertiser-per-article sponsorships. A “soft” launch of a redesign of its Newsweek website earlier this month includes the same content as the tablet edition, and the company has announced plans to move to “metered” Internet access with subscriptions at $2.99 per month.
In the most recent quarter ended on March 31, IAC reported an operating loss of $8.8 million in its media group, which includes News_Beast, the combined Newsweek and Daily Beast operations, from an operating loss of $6.7 million in the same quarter a year earlier. The company does not break out separate earnings for News_Beast. But it said that in the first quarter for News_Beast and About.com, revenue rose 8% and operating income before amortization rose 29%. It said that the full year outlook was for a percentage growth of operating income before amortization in the mid- to high 20s for About and News_Beast.
According to sources who have been briefed, Newsweek’s 1.5 million subscribers, in the quarter before it ended its print edition, fell to 470,000 in the first quarter of this year, with estimates that it will continue to decline throughout the year.
The figures showed positive operating income before amortization, but negative cash flow.
Online traffic declined from 2.9 million unique visitors in January, to 1.9 million last month, according to those who have seen the numbers.
What remains to be seen is what the sale will mean for Tina Brown, who has led the charge to revive the struggling brand since coming aboard as editor of Daily Beast for IAC in 2008.
Barry Diller/IAC Acquisitions in Photos: