The chairman of Conde Nast Publications last week acquired a minority stake in Wired, the San Francisco-based magazine that bills itself as the "house organ of the digital revolution."
The deal comes three months after Mr. Newhouse's Advance Publications committed $500 million to QVC Network's bid to acquire Paramount Communications.
Both investments are passive ones, indicating the taciturn Mr. Newhouse isn't ready to actively join the interactive fray but does want a front-row center seat at the revolution.
"A byproduct of our investment [in Wired] is we're going to be able to get advice and consult with them," Mr. Newhouse said. "The opportunity to gain experience was a factor in our thinking. It's quite an extraordinary magazine."
Mr. Newhouse's nephew Steve, who chairs an Advance Publications task force on new media, will make monthly trips to San Francisco to meet with Wired executives.
Terms of the deal were not disclosed, though Wired had approached several other publishers in recent months, offering to sell a minority stake. Based on those talks, it is believed Conde Nast paid between $3 million and $5 million for a 25% stake in the magazine.
Conde Nast will have no say in the editorial direction or management of the magazine and does not have an option to increase its stake or take control.
"They get a stake in what's likely to be a very successful magazine and a front-row seat to watch the publishing laboratory we're building here," said Louis Rossetto, editor and publisher of Wired.
He said Wired was in serious discussions with three publishers in November when it learned through investment bankers Veronis, Suhler & Associates of Mr. Newhouse's interest.
Wired was launched in January 1993 and doubled its frequency to monthly in November. It claims a paid circulation of more than 100,000 and an average of 50 ad pages per issue, primarily from the technology and entertainment categories.
Mr. Rossetto said the investment will be used primarily for a direct marketing campaign to boost circulation and to expand the magazine's on-line presence. A New York ad sales office will be opened in coming months and the sales staff will grow to nine from four people, he said.M