NEW YORK (AdAge.com) -- Nobody knows what happens when you combine a 77-year-old money-losing newsweekly with a two-year-old website that's yet to turn a profit. So it's going to be fascinating to watch the adventures of the Newsweek Daily Beast Co., formed last week by the merger of Newsweek and the Daily Beast.
In terms of meeting immediate needs, the deal is a masterstroke. Newsweek needed an editor after Jon Meacham, whose high-minded 2009 redesign underperformed, departed with the sale of the magazine to Sidney Harman. The deal installs Beast Editor in Chief Tina Brown as editor in chief of Newsweek as well. It's like pumping jet fuel into a magazine that's running on fumes. Ms. Brown is a master of buzz whose reigns at Talk, The New Yorker, Vanity Fair and Tatler were celebrated.
"She bring an enormous amount of credibility and a built-in PR machine," said George Janson, managing partner and director of print at Group M, the media buying and planning power. The main problem for her will be the crush of raised expectations, Mr. Janson said.
And for The Daily Beast, part of the big internet company IAC Corp., Newsweek's name and 1.5 million paid subscriptions could bring new clout and new audiences. Despite all the buzz that's accrued to the Beast, its site attracts significantly fewer people than Newsweek.com: 2.2 million for the Beast in September compared with 6.2 million for Newsweek's site, according to Compete. And even though Newsweek's ad pages in the first three quarters fell 12.7% from the same period in abysmal 2009 -- a decline exacerbated by uncertainty around the magazine's sale -- Newsweek still has a lot more advertising than the Beast.
The new company hasn't much articulated its business strategy, and the partners' financials aren't public.
And it's not clear that buying ad packages across Newsweek and The Daily Beast will prove tremendously more compelling to marketers, structurally speaking, than buying ad packages across Newsweek and the bigger Newsweek.com. One Newsweek sales staffer wondered whether it made sense to shut down Newsweek.com. "There's certainly some equity in Newsweek.com," he said. "We rival a lot of sites."
For now, though, this Newsweek Daily Beast Co. is the most interesting thing in media, which will help attract advertisers looking to share the spotlight, at least in the near term. "Everyone feels that it's a good shot in the arm," the Newsweek sales staffer said. "It's got people talking about Newsweek again."