NEW YORK (AdAge.com) -- Newsweek and the Daily Beast are close to finalizing a deal to merge, a person familiar with the effort confirmed Thursday evening, uniting a 77-year-old newsweekly with a 2-year-old website in a tactic that hasn't been tried before but delivers a high-profile editor to Newsweek and new heft to the Daily Beast.
An announcement is "possible" Friday morning, the person said Thursday after The New York Observer reported that the merger was on.
Sidney Harman, who bought Newsweek from the Washington Post Co. in September, has been talking to IAC Chairman-CEO Barry Diller, whose company owns the Daily Beast, about merging the properties partly in an effort to secure the Daily Beast's vibrant editor, Tina Brown, to edit Newsweek. For the Daily Beast, in turn, Newsweek's name and subscriber rolls would mean new influence and audiences.
Both are also confronting challenges of their own. Newsweek, like all news weeklies to one degree or another, was suffering growing competition from digital media. Changes to the media business proved stark enough that U.S. News & World Report, once a solid No. 3 in the competition with Time and Newsweek, essentially went all digital last week. But the Daily Beast faces the same reality that many content sites have encountered: Good content can attract audiences, but those audiences don't necessarily translate into a big, sustainable business.
The talks seemed to break down in mid-October, however, largely over issues of control. "The engagement was fun but the pre-nup got too complex," Ms. Brown told her staff in a memo.
The "complexities" of Newsweek's "infrastructure, legacy and our desire to stay nimble ultimately made this not the right decision at this time," she said in an email to The New York Times.
But those issues now seem to be nearly resolved. On Thursday evening, The Observer reported that a merger agreement will be announced Friday morning after Mr. Harman and Mr. Diller finish "hammering out a couple of sticking points."
The person familiar with the talks confirmed the sentiment but rated an announcement Friday morning "possible," not a certainty.
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