After getting hammered by the ad recession of the early 1990s and the paper crisis of '95, the gloss has returned to magazine publishing.

"Look at the Petersen Publishing deal, which closed at a full price that was far higher than anyone expected," says Porter Bibb, managing director at investment banker Landenburg, Thalmann & Co. "Magazines have never been a better value in the marketplace."

Indeed, magazine shelves remain crowded and competition fierce in many categories. Recent high-impact launches like George and Conde Nast House & Garden have proven magazines are still glamorous vehicles.

Consumer magazines racked up another record advertising year in 1995, with $10.1 billion in ad revenue, a 12% increase over the previous year. Ad pages rose 5.1% for the year to 208,378 according to Publishers Information Bureau.

STRONG SECOND HALF

Despite a sluggish first half, consumer magazines appear poised to top that record this year, thanks to a strong second-half surge.

So even if magazines aren't as "sexy" as they were a decade ago, many executives say they don't care. They'll just keep quietly reaping their profits, thank you.

"The Internet is a very hot topic right now," says Page Thompson, exec VP-U.S. media director at DDB Needham Worldwide, New York. "But I don't think it means that magazines' days are over. Magazines are going to be around for a long, long time."

The Internet has grabbed the spotlight from publishers in sharp contrast to a decade earlier, when magazines were among the hottest of all media.

"From a sex appeal and a buzz on Madison Avenue point of view, there is nothing to compare with the front-of-mind impact that new media are creating," says John Suhler, president of Veronis Suhler & Associates. "It's a new field with new thinking, new tools. Everyone is trying to understand it. `Magazines can't compete with that, but the fundamental, enduring value of magazines is still there."

INTERNET TAKING LONGER TO EVOLVE

Many publishers, who seemed to be in a virtual panic regarding new media and the Internet a few years ago, now seem to realize the new industry is taking longer to evolve than they anticipated. Profits in the new-media realm for magazines remain elusive.

"We're a mature industry, so we'll have a nice healthygrowth," says Donald Kummerfeld, president, Magazine Publishers of America. "But I think there is a recognition that it's going to take a lot longer than we initially anticipated before the new media are user-friendly for mass audiences."

Available ad revenue figures seem to support that view. In the first half of 1996, Web ad spending grew to $66.7 million, according to Jupiter Communications.

In contrast, even though the 208 magazines tracked by Publishers Information Bureau saw ad pages drop 1.9% in the first half, they still recorded ad revenue of $5.26 billion for the period, up 8.3%.

A single magazine, People, posted reported ad revenue five times that of the entire Web.

NOT JUST HYPE

"All the new-media talk is not just hype-it's generated because there is a great unknowing on the part of decision makers," says Mr. Bibb. "We all know online is going to be a major information source. We also know that you can count on one hand the number of people that are making money on it."

While new media remain a topic of interest, publishers are once again focusing more attention on their core print businesses.

Of all the major publishers, Time Inc. is enjoying the best year; its ad pages rose 10.8% to 14,505 through August, raising its market share 1.2 points.

Time Inc. President-CEO Don Logan, who created a stir at the 1995 American Magazine Conference by saying new media "give a whole new meaning to the scientific term `black hole,'*" still thinks print will be the engine driving the company for the long term.

NO REGRETS

"I don't regret saying it," Mr. Logan says of his remarks of a year ago. "I think it got people to crystalize on the fact that this thing is not here yet. I think electronic delivery of content is going to be important and once they develop a business model that works, we'll be a major player."

He is now urging individual titles to be more entrepreneurial in the print arena. That has resulted in some successful spinoffs, such as advertising-free Time for Kids for elementary schools.

People is about to begin testing the first of four monthly editions of a Spanish-language version.disbanded the Time Inc. Ventures unit, Mr. Logan is still proceeding with This Old House, which is going up against a new title being tested by Hearst Magazines, "Now we like to plant [new magazines] as acorns and see how they develop."

The focus is also on broadening existing brands.

Time Inc.'s Sports Illustrated is teaming with CNN to launch a 24-hour sports news cable network in December. It will go up against a new ESPN sports news channel launching this fall from parents Walt Disney Co. and Hearst.

Disney is said to be considering taking over the funding of ESPN Total Sports to give it a more aggressive rollout. Under Hearst Magazine Enterprises, eight preview issues have been published this year but no green light has yet been given for a launch.

Elsewhere at Hearst Magazines, the company has struggled somewhat through the first eight months of the year, with ad pages dropping 10.4% to 7,168-the steepest decline of any of the major publishers.

DECLINE EXPECTED

Hearst Magazines President Cathleen Black says the decline was in line with expectations following last year's move to cut rate bases and boost ad prices.

"We expect to be down only in the single digits in ad pages by year end," according to a company spokeswoman, who says overall profits are up.

Ms. Black says Harper's Bazaar will be in the black for the first time in 10 years.

Due to the slow start, especially in categories like beauty, fashion and auto advertising, some publishers were still struggling to finish ahead of last year.

Conde Nast Publications predicts it will be up 3% to 4% in ad pages for the full year, but through August, PIB *showed the company was down 2.3% in pages to 11,221; Times Mirror Magazines, which laid off 125 people at the end of '95 and has continued to make minor cutbacks this year, showed ad pages off 5.5% to 6.374.4.

MEREDITH A SHOWCASE

Meredith Corp. magazines emerged as one of the strongest showcases of the industry's comeback. For the fiscal year ending June 30, publishing operating profits jumped 32% to $64.1 million on the group's revenue of $696.3 million, which is 70% of the company's total revenue of $867.1 million.

Although big-budget launches have been scarce since last spring, when the company shut down Home Garden after only one year, Meredith continues to test smaller quarterlies and one-shots.

"We assume not everything is going to work and we continue to look for the big idea," says President Chris Little.

Spinoff titles in the past year have included Renovation Style, Decorator Show House and Crafts Showcase. Industry executives say the company is close to giving a green light to another startup, Family Money.

Though Meredith has attracted advertising to Web sites for magazines such as Better Homes & Gardens and Successful Farming, Mr. Little is convinced new media will only be a small part of the company's overall picture.

"I think we need to continue to invest and explore new products and ways to extend our brands, but I don't see new media as a major contributor to our bottom line over the next five years," he says.

DON'T EXPECT WEB DAMAGE

Long-term industry consensus seems to be that magazines won't be hurt by the Web. "The money we see migrating to the Internet will come out of broadcasting, it will come out of direct response," says Mr. Thompson.

"Magazines are not dead," Mr. Bibb agrees. "They have a different kind of sex appeal-more like the woman who turns 40. She can still be attractive but she has to recognize that she's not an ingenue anymore. [Magazines] are more like Jane Fonda or Raquel Welch. They don't have to take off their clothes to generate heat."