What Pearlstine plans at Time Inc. New Media

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In the first in-depth interview since being named interim president of Time Inc. New Media, Norm Pearlstine began to spell out plans for the closely scrutinized unit.

While he clarified the unit's position on some fronts, it's clear other questions--particularly who will take over the president's title on a full-time basis--remain very much up in the air.

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The January announcement that Mr. Pearlstine, editor in chief of Time Warner, would dip into daily operations at Time Inc. New Media got the interactive community buzzing.


Was it a sign of renewed commitment from the highest echelon of the company? Did it signal the start of a "bakeoff" between lead managers vying for the top spot at the high-profile new-media unit?

Was Mr. Pearlstine's role to oversee a blending with CNN Interactive, run by Time Inc. sibling Turner Broadcasting System?

"Don Logan [Time Inc. president-CEO] makes life very simple around here. He wants us to do stuff that makes sense and makes money," Mr. Pearlstine said, by way of answering all those questions.

Just how long Mr. Pearlstine will occupy the role of president of new media remains unclear.

He said his duties represent only a slight extension beyond the involvement he already had when Paul Sagan led the unit during the past two years and Walter Isaacson handled it the year before.

But he declined to say whether--or when--he'll name a permanent successor.

"Given the fluid relationship between Logan and me and people on the business side in new media, I think we're able to manage quite effectively," Mr. Pearlstine said. "For now, I think we're able to explore the opportunities available to us in the structure we have."


General Manager Bruce Judson; Linda McCutcheon, VP-sales and marketing; Oliver Knowlton, VP-technology and administration; and Craig Forman, newly named VP-worldwide development and editor at large, represent a formidable layer of management.

"If we can organize the four of them . . . this enterprise as it continues will succeed," Mr. Pearlstine said.

One thing that is definitely gone: the combination editor/business manager role held by Messrs. Isaacson and Sagan. Dan Okrent, editor of new media, will stay firmly in that position.

Mr. Pearlstine is vague about the relationship between the Time Inc. and Turner Internet efforts. While he admitted that "there is overlap" between the two, he said, "we're in the process of working that out."

But, he added, "matrix management doesn't make sense," confirming that the ad sales staffs for Time Inc. and CNN Interactive will work autonomously, perhaps pairing up on joint ventures such as the AllPolitics site, which launched last year.

While Mr. Pearlstine may be ambiguous about management issues, he isn't fuzzy about his expectations for the department.

"We expect total revenues from advertising into Time Inc. New Media to more than double results from 1996," he said. "And we expect total expenses in 1997 for Pathfinder will remain flat with expenses for 1996."

Pathfinder generated an estimated $4.4 million in ad revenue through October 1996, according to Jupiter Communications' AdSpend report.

Mr. Pearlstine declined to discuss the figure "because we can't consider this [medium] as a business yet," he said. Pathfinder currently boasts 130 advertisers.


The site will soon announce an ad price increase effective March 15. It will package Time Inc. New Media properties, especially Path-finder, like TV buys, with different rates for buys of different demographic and behavioral audiences.

Right now, Pathfinder charges a basic $29 cost per thousand impressions.

The unit will continue to explore line extensions of its print and other entertainment properties, development of transaction-based services such as the paid version of Pathfinder Personal Edition launched last year, and joint ventures and new editorial products such as Thrive, developed with America Online.


"So much of what new media can do here has to do with the magazines," Mr. Pearlstine said. "I feel we'd lost some of that" last year." Pathfinder, he said, is a "way to organize content, and also resources."

Despite all the activity, Mr. Pearlstine doesn't believe new media will threaten Time Inc.'s core magazine business anytime soon.

"We believe that the whole area of new media has extraordinary potential and is worth considerable investment," he said. But "in the next decade, Time Inc. will be a print company known primarily for its magazines."

Copyright February 1997, Crain Communications Inc.

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