80 Years of Ideas

Fortune Rides the Booms and Busts of Business

Once-Ambitious Idea Has Consistently Covered the Ups and Downs While Feeling Them Itself

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NEW YORK (AdAge.com) -- Much like Ad Age, Fortune began life at about the worst possible time for a new business: the dawn of the Great Depression. But it was born, in reality, of success, namely the recent triumph of Henry Luce's then-young Time magazine, founded in 1923.

A RISKY EXPERIMENT: At the dawn of the Depression, Henry Luce envisioned a magazine that would channel the 'importance -- even majesty' of American business.
A RISKY EXPERIMENT: At the dawn of the Depression, Henry Luce envisioned a magazine that would channel the 'importance -- even majesty' of American business.
Mr. Luce's enthusiastic idea for a follow-on launch envisioned a magazine so beautiful in its physical presentation that it would channel the "importance -- even majesty" of American business, according to Daniel Okrent's historical essay on the magazine in 1999.

The majesty of business, however, has always included swings from the heights to the depths, with warnings that seem clear to most people only after the fact. So the team assembling Fortune's ambitious first issue suddenly found itself facing the country's worst economic calamity.

At least the team's certainty in a coming upswing gave it confidence to proceed. "But we will not be over-optimistic," they wrote in a memorandum to the board of Time Inc., according to Mr. Okrent's account. "We recognize that this business slump may last as long as an entire year."

Of course the Depression lasted far longer; the stock market did not reclaim its pre-Depression levels until 1954. Fortune outlasted that calamity by decades.

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The magazine's consistency over many of the intervening years served it well, but its ability to change has just as certainly supported its longevity. Fortune began by publishing on oversized stock bound by art for covers, not teases for the articles inside. It originally sold individual copies for $1 and subscriptions for $10, which would now run almost $130. Despite the economic conditions and its steep price, the lavish Fortune grew quickly and collected accolades almost as fast.

Fortune also gradually shrank its original, imposing physical format, as it did in 1943 amid wartime paper shortages and again in 1972 to become less intimidating.

For decades Fortune published once a month but accelerated to a biweekly in 1978 after the business side won its long argument that more issues would mean more ad-page sales. That change wasn't without controversy, partly because Fortune had done so well on the monthly schedule, which gave its journalists, photographers, graphics department and editors enough time to publish a comprehensive and impressive issue on each go round.

And then, as Time Inc. became part of Time Warner and eventually AOL Time Warner, its staff and outsiders alike wondered whether Fortune and its siblings would suffer. "Just the general concept of the magazines being buried in a conglomerate was disturbing to me, because you like to think of the magazines being paramount," said Carol Loomis, a Fortune senior editor-at-large who has worked there since 1954. "And then you thought that there were would be conflicts of interest, and they would be more of a problem at Fortune than any of the other magazines."

You can't be completely sure that the conflicts never had an impact, Ms. Loomis said, but the mergers never seemed to interfere with her own work at Fortune, even when she wrote critically about a Time Warner shareholder.

Ups and downs
Fortune has enjoyed and suffered many booms and busts of the economy along its way, more so than most consumer magazines even if they've lived as long or longer. "We have a lot of business-to-business advertising, and when business cuts back, we feel the effect," said Andy Serwer, a 25-year Fortune veteran who's been managing editor since 2006. The dot-com boom delivered Fortune an incredible volume of ad pages; the most recent recession, combined with changes in the media business wrought by digital, has certainly hurt.

Fortune recently decided to reduce its frequency from biweekly to 18 times a year; the new redesign that arrived with the March 22 issue, on the other hand, includes higher-quality paper stock again, among other changes. The title has been investing mightily in its online operations and has plans in the works to play on the tablet computers just now arriving.

"This is arguably the greatest challenge the magazine has ever had, right now," Mr. Serwer said, without showing any doubt that the magazine will meet it. "It will be interesting to see how we survive, is how I characterize it," he said.

Ms. Loomis agreed, calling the path forward unclear -- not just for Fortune, of course, but for many others, too. "I have to believe that maybe we haven't worked out the formula yet, but I do believe there is a market for Fortune," she said.

"For anybody that started in 1930, like you, like us, just to get off the ground was a huge challenge," Ms. Loomis added. "Anybody who did and stuck with it and managed to maneuver the world for 80 years hasn't done badly."

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