Tech magazines face tough times as advertising plunges

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Tech magazines face tough times as advertising plungesPosted at 4:50 p.m. PST Wednesday, Feb. 21, 2001

Tech magazines face tough times as advertising plunges SAN FRANCISCO (AP) -- The trendy technology magazines that cashed in on the Internet craze are now reeling as last year's advertising bonanza disintegrates into a miserable comedown.

The Industry Standard, the self-proclaimed weekly ``newsmagazine of the Internet economy,'' provided another sign of the sobering times Wednesday by laying off 69 employees, or 16 percent of its work force. The cuts included 18 workers from the magazine's 130-employee newsroom.

The San Francisco-based magazine now has laid off 22 percent of its staff since Jan. 1 as its holding company, Standard International Media, unravels an ambitious expansion undertaken during last year's heady times.

At the same time, other tech magazines are retooling their operations as they try to survive a downturn that has turned much worse than publishers envisioned just a few weeks ago.

``It has been much more abrupt and dramatic than we had foreseen,'' said Jonathan Weber, the Standard's editor-in-chief.

The rude awakening is triggering an upheaval at the New Economy magazines that have become a mirror of the Silicon Valley's ups and downs.

Just last week, Business 2.0's British owners announced plans to lay off 90 workers and disclosed they are exploring a possible sale of the Brisbane-based magazine.

The publisher of Red Herring magazine has laid off 54 workers since last fall and Upside magazine's publisher has pared its staff from 120 workers to about 90 employees since November.

``There are a lot more speed bumps in the landscape this year. No one is clicking their heels in joy,'' said David Carey, who oversees the technology magazine Fast Company for German owners Gruner + Jahr.

Magazine executives and analysts say they wouldn't be surprised if two or three of the tech magazines disappear this year, either through sales or closures.

``They lived in a bubble for a year, and now that bubble is bursting,'' said Samir Husni, a University of Mississippi journalism professor who tracks the magazine industry.

The advertising slump underlying the shakeout has hurt a broad spectrum of media, but the pain has been most acute at print publications and Web sites dedicated to technology news. This media sector received the bulk of its revenue from technology advertisers that are pulling in their reins in the face of a dot-com shakeout and an uncertain economy.

``Even the people who have the money in their budgets aren't spending it right now,'' said Larry Kramer, CEO of Marketwatch.com, a financial news Web site that hasn't been as hard hit by the downturn as the tech magazines.

Unlike the unprofitable Marketwatch.com, the tech magazines had been making scads of money, encouraging them to rapidly expand their staffs and host extravagant technology conferences.

The Standard, for instance, tripled its advertising revenues last year to $158.7 million while selling more ad pages -- 7,440 -- than any of the 254 other magazines tracked by the Publishers Information Bureau, an industry trade group.

Other tech magazines enjoyed similar boons. Advertising revenues at Business 2.0 and Red Herring more than quadrupled in 2000, to $92.5 million and $87.2 million, respectively, while Fast Company's ad sales more than doubled to $77.4 million, according to the Publishers Information Bureau.

The magazine publishers entered 2001 knowing that they had little chance of matching last year's performance, but none thought advertising would disappear so quickly.

Through March 6, total ad pages at the tech magazines were down anywhere from 25 percent to 60 percent, according to industry reports. The Standard had sold 459 ad pages through March 6, Weber said, down by about 60 percent from the same time last year.

The magazine's revenue loss hasn't been as severe, Weber said, because the Standard's rates are 75 percent higher than last year. Other tech magazines are also charging more for space. Fast Company, for instance, increased its ad rates by 36 percent last year, Carey said.

A growing readership enabled the magazines to increase their ad prices. Red Herring enjoyed the biggest increase as its circulation almost doubled last year to 315,633, according to the Audit Bureau of Circulations. Fast Company's circulation gained 46 percent to 586,791, the ABC said.

But the higher ad prices and bigger audiences haven't been enough to shield the magazines from the technology industry's turmoil.

``Everyone is going to be under a lot of pressure this year,'' Weber predicted.

http://www0.mercurycenter.com/svtech/news/breaking/merc/docs/033344.htm

-- Tess (webwoman@iamit.com), February 21, 2001


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