Thursday

Red Herring
prepares to close

Report: Cash-strapped title is peddling circ list

By Jeff Bercovici

   Red Herring may well be cooked.
   The last independently held so-called New Economy title, the magazine is being shopped around by New York media investment bankers DeSilva & Phillips.
   Closure seems all but assured.
   Over recent months, the publication, founded in 1993 to cover Silicon Valley's venture capital market, has been offered to all would-be buyers, from Time Inc. to Gruner + Jahr, with no takers.
   The magazine is now offering to sell its name and circulation list for $2 million, anticipating it will find no buyer and will have to cease publication. So far there are also no takers.
   The disappearance of Red Herring would leave just two competitors, G+ J's Fast Company and Time Inc.'s Business 2.0.
   While neither would particularly benefit from advertisers migrating over--Red Herring had few--the latter's closing would remove much of the taint that has dogged the three publications since the dot.com bust more than two years ago.
   The New Economy category would no longer exist, freeing each title to position itself according to its editorial and readership.
   Fast Company would still appear to be facing the harsher struggle. Earlier this week its founding editors abruptly resigned, evidently dissatisfied with G+J's support of the title, which has faced a similar slump in ad pages.
   Red Herring's death would follow that of The Industry Standard, Forbes ASAP, eCompany Now and most recently Upside, which tanked in October.
   Red Herring's demise has long been expected, following a string of layoffs over the past two years and a sharp decline in advertising. Ad pages plunged 66.1 percent in 2002, following a similarly startling tumble for 2001, and they were down again in the first month of this year, falling 15.1 percent, to 26.7.
   The magazine went through a reorganization several months back in which Broadview Capital poured in additional funding while taking control. But the apparent plan, to shrink the magazine back to its original mission of covering Silicon Valley VCs, proved not workable.
   Red Herring's efforts to sell its name and circ list were reported late yesterday by TheDeal.com, which covers mergers and acquisitions. The Deal LLC was also among the companies approached about buying Red Herring's assets, an executive there confirms to Media Life.
   At a price of $2 million, the magazine's subscriber list of 318,000 would go for $6.25 a piece, a figure one magazine consultant describes as an attractive price.
   The magazine’s total paid circulation slid 5.5 percent to 332,889 in the second half of last year. Single copy sales dropped 36 percent, averaging 14,119.
    Calls by Media Life to Red Herring CEO Chris Dobbrow were not returned, while DeSilva & Phillips declined to comment. A G+J spokesperson declined to say whether the company had been approached to buy the title.
    Another publisher who says he was approached is Bruce Journey, CEO of Technology Review. Journey says the talks were within the last three months and have since concluded. He would not disclose the terms Red Herring was seeking.
   "We've long admired them, but it's not something that would fit with what our objectives are right now," says Journey.
   With its focus on technology-sector venture capital, Red Herring may not be a good fit for Business 2.0 or Fast Company, either.
   One media company that may find it more attractive is Rising Tide Studios, which publishes Silicon Alley Reporter and Venture Reporter, two publications with a nearly identical target reader.
   The question now, though, is whether any potential buyer will feel the need to rush in to buy Red Herring's subscriber list, even at $6.25 per name. In today's market, in which the entire tech sector still is suffering, there's little cause for anyone to rush after anything.

-Jeff Bercovici is a staff writer for Media Life.

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