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Cond Nast Portfolio Tries For TurnaroundBut Will Newhouse's Largesse Hold Out?

This story was written by David Kaplan.
Two years in, Cond Nast Portfolio is facing a much more difficult development period than any of its sister CN titlesand its survival as a new magazine in the toughest ad environment remains dependent on how long its parent can afford to keep supporting it.

The magazine has experienced turmoil on its editorial side and it still gets the occasional jab for its choice of cover subjects, although the chances for that criticism dropped by two when production was reduced to 10 issues a year. But the latest blow came with Q1 ad page results showing that Portfolio's plunged 60 percent (the mag's reps say the adjusted number would be 46 percent if it took the reduced publishing into account). And on the internet side, has been struggling when it comes to traffic, as *comScore* says uniques dropped 20 percent year-over-year in March to 579,000 visitors. The drop in traffic is likely related to Portfolio's decision to cut fresh editorial content on the site.

The turnaround plan: With all that baggage, Portfolio has a lot of work ahead to turn things around. But Portfolio publisher William Li, who was brought over from CN's Men's Vogue in January after a management shakeup, has been working on sharpening the magazine's strengths and trying to expand its coverage to draw in more readers and advertisers. For instance, the magazine opening up sections on tech, travel and health. Also, Portfolio has been looking to expand its coverage and marketing appeal to more tech and telco advertisers, with advertisers like *Adobe* and *AT&T* recently having signed up.

'More after the jump.

Blog losses and gains: Earlier this month, the site was hit with one of its biggest losses when popular blogger Felix Salmon left to start a blog at Reuters covering global finance. He'll be replaced by The Economist's Ryan Avent. Portfolio has added two other blogs, The Weiss File, from BusinessWeek's Gary Weiss, and business travel-focused Itineraries, by J. Jennings Moss.

Less deeper pockets: Steve Cohn, editor-in-chief of MIN Online explains: "Cond Nast Chairman S.I. Newhouse, Jr., sustained The New Yorker and Vanity Fair during the 1980s and 1990s when they were losing millions, and in this decade both became profitable. That is the model I see for Cond Nast Portfolio, but the economy is much worse now, and we don't know how badly the Newhouse family was affected." The old adage was that it generally took a magazine five years to become profitable, Cohn added, although in this dire economic climate, those rules are out the window.

Don't judge us by ad pages: Addressing last week's PIB data, Li said judging a two-year-old magazine by the number of ad pages it has is "flawed." He added that the magazine is still in "development mode" and that Cond Nast understands that. In the meantime, Li said that circulation was up, something that many magazines on the PIB's list would have trouble claiming. Paid subs were up 12 percent in the last six months of '08, Li said, citing Audit Bureau of Circulation numbers: "Versus our initial audit statement, total circ is up 19 percent and paid is up 43 percent. And the rate base is up 14 percent. Our success is not judged on ad paes. The questions we respond to are 'Is the magazine relevant? Is it becoming a part of the culture? Are readers renewing?' That's what we're being judged on."

Thoughts, not cheers: Asked how he's trying to deal with some of the negative perceptionthe cover profile of American Apparel head Dov Charney that hit newsstands just as Wall St. was imploding drew howls of criticismLi said: "Now, more than ever, there's a crisis of credibility in business media. The Daily Show's Jon Stewart hit on the problem affecting not just TV, but most of our competitors perfectly. Financial news has mostly been about entertainment and cheerleading. Jim Cramer had said Bear Stearns was fine. In the April '08 issue, [contributing editor John] Cassidy wrote that 'The economy is most likely spiraling down' while Forbes said Merrill Lynch was in good shape and BusinessWeek said not to be leery of Lehman.  We had the problem of credit default swaps in our very first issue. We were dismissed as bearish for that. But we've proven to be prescient. That's our value to readers and advertisers: we're not cheerleaders; we're thought-leaders."

By David Kaplan

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