Si Newhouse bets big in bid for Fortune's fortune

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It is tough to say which is more surprising: that Conde Nast raided The Wall Street Journal to hire Joanne Lipman, the architect of "Personal Journal" and "Weekend Journal," or that Conde Nast did it to launch a monthly business magazine and Web site.

"Forbes, Fortune and BusinessWeek have really become magazines of record," said Brad Adgate, senior VP-director for research at Horizon Media. "I don't know if there is room for another one, given that you've got so many other ways to get business information."

Ms. Lipman is Conde Nast's most prominent hire since Tom Wallace took over the editorial director spot from James Truman in January. "We are, with this magazine, entering a very large market but a crowded one," Mr. Wallace said. "Innovation will be key."

The entry into business coverage could help Conde Nast Publications attract revenue from beyond its fashion, beauty and luxury core.

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Conde Nast parent Advance Publications owns American City Business Journals, which publishes 41 local business newspapers. It's not clear whether the two units will work together.

"You really can't sit still in this business. For us the opportunity to expand into the men's side of the business with a non-fashionista product is really kind of obvious," said Charles H. Townsend, president-CEO, Conde Nast Publications. "Our influence in the categories that we dominate will produce a different advertising mix than the category currently is accountable for."

Given the current climate for business magazines, securing a new mix of advertisers will only help. Ad pages at Forbes, Fortune and BusinessWeek totaled 4,782.98 from January through July of this year, down 8.7% from 5,240.28 during the same period last year, according to the Publishers Information Bureau.

"We are subject to the vicissitudes of a couple of major industry categories," said Jim Berrien, president-publisher, Forbes Magazine Group. "Too much is being made in general about what is an unbelievably robust category. What's heartening to me is that somebody as savvy as Chuck Townsend believes enough in the audience out there to squeeze some dollars out."

Conde Nast's entry could even invigorate the category, much like Martha Stewart Living and Real Simple introduced successful new formulas to the women's service category.

David Carey, VP-publisher of The New Yorker since 1998, was named president of Conde Nast's new business group. That choice was unsurprising given his background, which includes launching the Hearst and Dow Jones joint venture Smart Money and a brief stint running Fast Company and Inc. for Gruner & Jahr Publishing USA.

Web expectations

Mr. Carey said Conde Nast's commitment to the effort will mean more than trying to enter the category at precisely the right moment. `"Is the category up X points or down X points?' is not really the question," he said. "What is the right day? It's always unclear. With the right editor and the full resources committed, you can build a big business." He also said defining the magazine is the first priority, then the Web site, which Mr. Townsend views as vital.

"The community of business-magazine readers expect a great deal of support above and beyond a monthly magazine," Mr. Townsend said. "They want total immersion."

Ms. Lipman joined The Journal in 1983 as a reporter in New York and began its daily advertising column in 1989. She was later named a news editor on the page-one staff. In 2002, Ms. Lipman oversaw the redesign of the entire paper.

For Dow Jones, losing Ms. Lipman hurts. She was widely seen as a potential successor to Journal Managing Editor Paul Steiger. At Conde Nast, she will be editor in chief of the planned (and still only vaguely conceived) business publication. It is expected to launch in 2007.

Louis Cona, VP-publisher of Vanity Fair since 2001, succeeds Mr. Carey. Alan Katz, VP-publisher of Cargo, will succeed Mr. Cona.

Edward Felsenthal, assistant managing editor-news strategy, takes over for Ms. Lipman by taking on additional responsibility for all lifestyle coverage, including "Weekend Edition," which is scheduled to begin publishing Sept. 17.

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