IBT Media announced Saturday it has reached a deal to acquire Newsweek from IAC/InterActiveCorp (NASDAQ:IACI). The deal, which doesn’t include the Daily Beast website, follows weeks of speculation over the fate of the 80-year-old brand since it became an online-only property at the beginning of this year.
The privately held IBT Media is the parent company of 10 online news brands, including the International Business Times. The company’s stable of websites attract more than 30 million unique visitors per month. In a twist of poetic irony, its New York headquarters is located in the same offices once occupied by Newsweek, at 7 Hanover Square in Manhattan’s Financial District.
Financial terms of the deal have not been disclosed. In a combined phone interview, IBT Media co-founders and owners Etienne Uzac and Johnathan Davis, who serve as the company’s CEO and chief content officer, respectively, said they were drawn to the Newsweek brand in part because of its enormous global recognition.
“Newsweek is recognizable worldwide, not just in the U.S.,” Uzac said. “It’s known by more than a billion people. Having a brand with that kind of global recognition will open doors for IBT, which is growing but still a young company.”
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With a mix of both free and subscriber-based content, Newsweek is the first IBT Media property that is not completely advertiser-supported, offering an as-of-yet untapped revenue stream for the 7-year-old company. Davis said current Newsweek subscribers will continue to have access to the same exclusive content they’d had in the past.
The transition to IBT is expected to take between 30 and 60 days, during which time both companies will meet and map out the future direction of Newsweek.
The Newsweek sale will test the endurance and commercial viability of one of most storied brands in journalism, whose twists and turns have taken on a soap operalike quality over the past few years. The magazine hit its peak of influence in the 1980s under the ownership of the Washington Post Co. (NYSE:WPO), but it declined in the 2000s as readers migrated to the Web. In 2010, it was purchased in a vanity buy for $1 by Sidney Harman, a deal many considered a swan song for the 91-year-old audio magnate.
And they were right. Harman passed away less than a year later, but not before merging Newsweek with Tina Brown’s Daily Beast website, owned by IAC. The two brands have been interconnected ever since, with Brown often referring to her staff as “NewsBeasties.”
Under Brown’s leadership, Newsweek managed to make regular water-cooler waves for its controversial, often-divisive covers, including one cover telling U.S. President Barack Obama to “Hit the Road,” and another declaring Michele Bachmann the “Queen of Rage.” But such calculated rabble-rousing was not enough to save Newsweek’s print edition from circulation declines, particularly in the area of single-copy retail sales, which are dwindling rapidly for magazines in almost every market.
Newsweek published its final print issue last December, with Brown calling it an “extremely difficult moment for all of us who love the romance of print.” In a now-famous remark, Barry Diller, chairman of IAC, said buying the magazine was a mistake.
Under IBT Media, Newsweek will return to the Newsweek.com uniform resource locator, or URL, in the coming weeks. Uzac said there are no current plans to revive the print edition, but he has not completely ruled it out.
“We’re 100-percent digital and have a track record of building digital brands,” Uzac said.
Asked whether Newsweek, under IBT Media’s ownership, would continue devoting resources to the investigative, long-form journalism on which it built its name, Davis said it absolutely would.
“Obviously, there’s a great legacy there of very relevant reporting, and we want to continue that,” Davis said. “There is a lot of work to be done, but we’re excited about continuing a brand with such an iconic status.”