How Long, Mr Newhouse: Conde Nast's Gloss in Digital Age
This story was written by Rafat Ali.
A long profile of Si Newhouse and Conde Nast in the Sunday Business section of the New York Times today, touching on issues such as succession, magazine company's relevance in this digital age, and the company's own online mojo.
Here's the business side of it: "Conde also consistently sells more ads than its competitors and at higher prices, though some of its magazines make little or no profit. Even so, spending money to make money, and focusing on premium products to attract readers and advertisers, has clearly worked for more than a decade, though its margins are thin compared with those of its competitors. Conde executives say it generates close to $5 billion in revenue, has operating margins of around 10 percent and profits of about half that. Analysts and bankers say that Advance as a whole, which carries no debt, is worth, conservatively, $15 billion."
On the issue of succession, Steve Newhouse, who oversees all of parent company Advance's online operation, debunk the idea of succession as simply finding a replacement for Si: "Si has set us up with Chuck as C.E.O., Jonathan running the international group, and me running the Internet..I would anticipate that those roles would remain the same. I am not going to be running the magazines," he adds.
As for online, the story mentions Conde Nast's famously cautious steps, though those steps have accelerated just in the last two years or so. "Many of its Web sites are scanty. The company adopted the unusual strategy of embedding some of its biggest magazines into sites built around subject matter, rather than giving them stand-alone sites. Epicurious.com, for instance, includes Gourmet and Bon Appetit, while Style.com is the home of Vogue. Analysts and competing publishers say that Conde Nast under-uses extremely well-known brands that could draw more Web traffic." It has started doing that with some of its magazines, including New Yorker, though Steve considers the magazine sites as companion sites to the print edition. And then, something the story does not mention: Wired Media, the parent division for Wired, which has been making small-ish online acquisitions for the last two years, and recently bought ArsTechnica.
Pic courtesy: Nicole Lee
By Rafat Ali