Time Inc. Closes Office Pirates

Why? It Wasn't Getting Big Enough Fast Enough

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NEW YORK (AdAge.com) -- Time Inc.'s decision to close down its Office Pirates humor site on Sept. 1 -- abandoning its first stab at an online-only property after just six months -- was driven by the fact that it couldn't get big enough fast enough to benefit parent Time Warner in the eyes of Wall Street.

"We're investing in a whole lot of businesses online," said Ned Desmond, president of Time Inc. Interactive. "We have to be very careful to make sure that the limited amount of investment money that's around is going against the greatest-scale projects. Office Pirates was on a much longer road to become a big business than some of our others. We decided that the sober thing to do here was to make a tough decision and put the resources elsewhere."

Mr. Desmond sent staff an e-mail this morning to "announce" that Office Pirates would die, but the news had already been reported in the New York Post.

Intense pressure
Time Inc. lives under intense pressure to improve revenue and results year after year -- pressure that led to nearly 500 layoffs in the last year and contributed to last month's shutdown of Teen People's print edition. Time Warner singled out the unit as a disappointment in the conglomerate's most recent financial report.

Part of the problem is that Time Warner's huge size means only the biggest successes can even move the needle.

Office Pirates never got there. It will attract nearly 450,000 unique visitors in August, up from 360,000 in July and 150,000 back in May, according to internal counts.

That sounds pretty good, but the bigger picture makes clear that Office Pirates was not operating on a true Time Inc. scale. It ranked 115th among humor sites tracked by Hitwise, attracting just 0.13% of the category's traffic for the week ending Aug. 19. By comparison, the very popular CollegeHumor.com ranked 9th, with 1.5% of the category traffic. At the top of the Hitwise list, Heavy.com drew category share of 17.8%.

One upside
The one upside for Time Inc. is that it picked up some internet experience along the way. It learned that weekly video is not enough to keep people coming back, according to Mr. Desmond, and watched page-view growth accelerate after it added much more daily programming a couple of months ago. It got real-life training in search-engine optimization and other technical tools of the trade.

But the wisdom of some decisions remains unclear. Despite many reports that Time Inc. had hugely hyped Office Pirates at its introduction on Feb. 22, for example, the company actually always downplayed it in an effort to encourage viral growth. Whether more publicity or consumer marketing of any kind would have helped now becomes one of the questions for the rearview mirror.

And though The New York Times' Virginia Heffernan reviewed the site approvingly in March, its humor sometimes seemed better tailored for high-school students than office workers.

Few advertisers
The few advertisers who signed on included Dodge Magnum and Bacardi; lately the site has been running house ads for videos of Sports Illustrated's Swimsuit Issue shoots.

Office Pirates Editor Mark Golin did not respond to voicemails and an e-mail seeking comment, and, through a spokeswoman, both Time Inc. Editor In Chief John Huey and Chairman and CEO Ann S. Moore declined to comment.

Time Inc. will take another crack at web humor when Sports Illustrated introduces a new initiative, probably early next year. That project will have the advantage, at least, of SI's built-in base of readers and website visitors.

Here's the memo announcing the closing:

Aug. 25, 2006
To: Time Inc. Employees
From: Ned Desmond
Re: Office Pirates

I'm sorry to announce that the Office Pirates project will come to an end September 1, 2006.

This year we've approved major investments in our most promising businesses online, including People, CNNMoney, Sports Illustrated, Time, Golf, Entertainment Weekly and This Old House. We are constantly refining that portfolio to ensure we are focused on the most promising projects. Office Pirates was off to a good start -- and it is likely to reach nearly 11 million page views this month -- but the business still faced a long road. It was a hard decision, but we decided to shift Office Pirates' resources elsewhere.

Mark Golin and his small team accomplished a great deal in a few months, and we've learned a lot along the way about online launches, video production, audience development and, of course, office humor. We'll use that experience on other projects, and we'll do our best to find roles for the Office Pirates team across our expanding line-up of digital businesses. Time Inc. will return to online humor early next year with a new initiative from Sports Illustrated. Stay tuned.

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