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Critics bash publishers' rosy Web profit projections

Published on .

Several critics dismissed magazine publishers' rosy forecasts for reaping profits from online sites at a conference in New York on Thursday.

A new Ernst & Young study, previewed at the Magazines & New Media Conference in New York last week, found the 47 Magazine Publishers of America member companies surveyed oversee 175 online sites that have gobbled up an estimated $77 million in expenditures. The sites are projected to bring in only about $47 million in ad and subscription revenue this year.

But respondents also predicted that online revenues would average about $4 million per company next year and would rise to an average $5.5 million per company in 1998.

The results sparked a lively debate among new-media experts on the opening panel of the two-day session.

"I'd say probably about 95% of [publishers expecting to hit profitability] are going to be very disappointed in 1998," said William Bass, senior analyst, media & technology strategies at Forrester Research. "We think it will be more like the year 2000. In '98, there's just not going to be enough advertising revenue."For more on this story, go to the Interactive area of AdAge.com.

Copyright November 1996, Crain Communications Inc.

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