March 29, 2001
By Jon Fine
NEW YORK (AdAge.com) -- Chapter one of one of the Web's most celebrated content plays looks like it's coming to a close.
"We do not have a comment," said a spokesman from Inside.com "I will call you if that changes." Mr. Brill and his spokeswoman did not return phone calls seeking comment. Powerful Media co-founders
|Primedia CEO Tom Rogers, left, and Steven Brill.
At a media event earlier this month, Primedia CEO Tom Rogers deflected a question about his company's interest in Inside.com by saying, "Someone will have to convince me that model works."
Staffers' fate unkown
At this point, the contours of the deal, as well as the fate of the Web site and magazine's 115 staffers -- 15 of whom are in Los Angeles and the rest in New York -- remain uncertain.
"God only knows what it will end up as," someone familiar with the company told AdAge.com. "I don't know if anyone has any great hopes for that. At least it's not going under."
"Kurt [Andersen] suggested someone might use it as a heart to pump traffic through the rest of a larger media play," said one Inside staffer, while allowing that "it's a very expensive model of content creation for Primedia."
Primedia stock at 52-week low
The Primedia trade titles that Mr. Brill oversees include Cable World and Catalog Age. Brill Media Holdings owns the magazine Brill's Content and the e-commerce site contentville.com. The publicly traded Primedia's stock price closed today at $6.25, a new 52-week low.
Powerful Media launched Inside.com in last May, backed with about $30 million in funding from dot-com venture capital heavies Flatiron Partners, among others. The site, which covers music, movies, books and media, quickly made a name for itself, and not simply because its co-founders were New York media men-about-town Kurt Andersen, late of Spy and New York, and Michael Hirschorn, who formerly edited Spin.
The company poached top business writers and editors from name-brand places such as Business Week and The Wall Street Journal and quickly became a go-to site for the media-obsessed. In terms of magazine coverage, perhaps its high-water mark came when its reporters found out Hachette Filipacchi Magazine was closing George in early January -- apparently before its editor, Frank Lalli, did.
Good journalism but no profits
But the editorial plaudits did not translate into ad dollars nor subscription revenue -- the latter being an all-too-typical hobgoblin of content plays on the Web. Originally the site wanted to charge users $19.95 for access to archives and database information; as recently as March 29, a "time-sensitive offer" touting a year's worth of Inside.com and Inside, which was launched late last year, for $69.95 hit e-mail in-boxes.
Executives at Inside.com had conceded that subscription sales fell below expectations, the specifics of which are not known. While the site staffed up just before last year's Nasdaq crash -- when stock option packages offered to staffers looked like they could be worth serious money one day -- executives were more likely to admit that a sale of the company was more likely than an IPO.
Inside staffers, some of whom were faced with the odd job of reporting on sale talk of their own company, sensed earlier this week that a deal could be near.
"I am surprised at how fast it went," said the insider familiar with the company, referring to the deal.
Ironies abound in the potential deal: Kurt Andersen was fired from the editor's position at Primedia's New York magazine; Inside CEO Deanna Brown was formerly publisher at Brill's Content, from where Inside executive editor Lorne Manly left an editor's position to join Powerful Media.
"If you took a poll in the office today about whether anyone regretted coming to work there, I don't think they'd say they did," an Inside staffer told Adage.com today. "But that could change."