McGraw-Hill launched the publication in 1929. It survived the Great Depression but could not make it through the latest downturn with its founding company. The magazine has lost more than half its advertising pages since its peak of more than 6,000 pages in 2000.
With the deal, Bloomberg plans to expand its business coverage beyond its terminals. “For Bloomberg, it's an interesting play as they continue to broaden their platform and expand their audience,” said Scott Peters, managing director of Jordan, Edmiston Group, a media investment bank.
“Although Bloomberg has built one of the world's largest news organizations, with more than 2,200 journalists, our primary audience has been our 300,000 Bloomberg Professional service subscribers. … BusinessWeek helps better serve our customers by reaching into the corporate suite and corridors of power in government, where news that affects markets and business is made by CEOs, CFOs, deal lawyers, bankers and government officials who typically are not terminal customers,” Daniel L. Doctoroff, president of Bloomberg, said in a statement.
“We are pleased that we have reached an agreement for BusinessWeek to be acquired by Bloomberg, which shares the same high standards for editorial independence, integrity and excellence that have long defined BusinessWeek,” Harold McGraw III, chairman and president-CEO of McGraw-Hill, said in a statement.
While the deal signals a continued move into advertising-supported media for Bloomberg to complement its paid content, for McGraw-Hill, it continues the company's steady move toward paid-content properties, such as Standard & Poor's and J.D. Power and Associates.
Norman Pearlstine, Bloomberg's chief content officer, will become chairman of BusinessWeek and will oversee the integration of the property into Bloomberg.
Bloomberg has what appears to be a difficult task, integrating a property that is on course to lose more than $40 million this year, according to a BusinessWeek blog post. It is unclear whether BusinessWeek will remain in print and, if so, for how long.
“[Bloomberg] is going to have to do something radical [with BusinessWeek],” said one industry observer, who spoke on condition of anonymity. “This thing is losing a fortune.”