AOL TIME WARNER IN TALK TO ACQUIRE BUSINESS 2.0

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(April 10, 2001) -- Published reports and talk from inside AOL Time Warner and Imagine Media have the two companies nearing a deal for the purchase of Imagine's new-economy title Business 2.0.

AOL Time Warner is expected to use Business 2.0 to prop up its flagging eCompany Now, the Fortune offshoot launched last year in the thick of the tech boom and which is now keenly feeling the market's contraction. People inside and outside the company believe Time Inc. will essentially combine the two titles' circulation into one magazine, which some expect to no longer be called eCompany Now, lest the title sound too outdated in the current environment.

"I think it will take a play like this to keep [eCompany Now] afloat," said one AOL Time Warner executive about the potential deal. "The whole sector is just evaporating." Another industry executive noted the upside to marrying the two titles' ad bases.

Through February, Business 2.0's ad pages are down 26.5%. According to an executive who saw company financials, last year Business 2.0 posted profits of around $20 million on revenues of about $70 million. This year, the company expected the title to be only marginally profitable, but some industry observers are dubious.

A Time Inc. spokesman declined to comment. A call to Chris Andersen, president of Imagine Media, was referred to Business 2.0 publisher Michaela Abrams, who did not immediately return a call seeking comment. But a spokewoman for Business 2.0 said, "There's no official news to report at this time. We are still exploring all options."

The potential deal was first reported Monday by Inside.com and Folio: First Day. Those publications reported the deal to be worth between $30 million and $75 million. -- Jon Fine

Copyright April 2001, Crain Communications Inc.

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