After The Rush Print People Return To The Fold

Folio: The Magazine for Magazine Management, Oct, 2000 by Matthew Schwartz

April's Nasdaq shakeout has led many adventurous publishing pros to reconsider their options--and we're no longer talking about the stock kind.

It seemed like a good idea to many, no doubt. But after a few years of what was beginning to look like a wholesale exodus, April's shakeout among Internet stocks--and the beating the pure-play dot-coms took as a result--has put the brakes on a mad dash by all kinds of professionals to the Internet. Although the Web still holds great appeal for people from many disciplines, its threat to print--in terms of talent drain, at least--seems to have abated in the past few months, and a growing number of magazine folks are now making their way back to traditional media companies after getting spooked by the fallout. The Web, they're finding, is more for people interested in the medium rather than the money.

Sources at both the editorial and sales levels say they went to pure-play Web sites in earnest. They insist they were struck by the dot-com fever gripping the economy and were pumped to get in on the ground floor of a still relatively new and exciting medium. The prospect of having some equity at the end of the day also spurred them to take the risk inherent in moving to a nascent industry. But the events of April 14, 2000, fundamentally altered the cyberscape of online vs. print media.

Since then, many Internet pure-plays have gone dark, extinguished by their own burn rates. Revenue models have stumbled left and right, and equity packages that once put stars in the eyes of seasoned professionals are in many cases turning out to be worth little more than the paper they were printed on. It's no surprise, then, to see plenty of magazine folks who had jumped to the Web now jumping just as hastily back to the print world, where even if you're running a Web site, it's an adjunct to a magazine--and therefore not "out there" all alone in the suddenly shaky Internet pure-play space.

Wake-Up Call

"I feel like I'm back at home, even though I'm at a brand new company," says Emily Sacher, who started in late July as editorial director for Meredith's Better Homes & Gardens Web site after a seven-month stint at Space.com, a pure-play. "I felt secure in terms of my particular work situation at Space.com, but the Nasdaq correction sent me an alarm bell about whether I wanted to eke out an existence on the Web."

"I got bit by the bug," adds Sachar, referring to her decision to leave a secure editorial position at Scholastic late last year to join Space.com. "I thought, 'We can't lose, with the audience growing so rapidly.' How naive I was. Having a good idea isn't enough." Once a Web site is operating, she says, "the costs of building, marketing and branding the site" often become prohibitively expensive [see "Dot-coms' Descent," page 22].

"We, as an industry, allowed ourselves to be misled," adds Paul Turcotte, publisher of Men's Health, who in February left his job as publisher of Yahoo! Internet Life to become president of the Orlando-based Web site Megachannels.com. "We thought we'd be building the future with a bottomless pit of cash. Now the market seems to be saying it's time to make some money.

After launching Yahoo!'s online music awards and film festival, Turcotte says, he was eager to run a Web site that would indulge his passion for "streaming technology" and grant him a certain degree of autonomy. He got both, plus a piece of the action. But after the bottom fell out of the Nasdaq market, says Turcotte, Megachannels.com quickly went from "growing and hiring to cutting and managing the cash very carefully."

Perhaps most unsettling, says Turcotte, was the company's burn rate, which was accelerating faster than anyone would admit. The financial well ran dry enough "not for me to move my family down here," he says, adding that he had been commuting from his suburban New York home to the Megachannels.com headquarters in Florida.

After resigning from Megachannels.com, Turcotte quickly landed at Rodale Inc.'s Men's Health, where he replaced Jane Turner, who left to join her predecessor, Jeff Morgan, at Ralph Lauren Media. Echoing Sachar's sentiments, Turcotte says he has no regrets about taking the risk in cyberspace, but he adds that he's happy now that he's getting the best of both worlds from Rodale: steering the Men's Health branding efforts for both print and the Web, and not fretting about whether the bills are being paid. "Traditional publishers are going to get back a lot of bodies," he says.

Jim Spanfeller, president of the consumer magazine division at Ziff-Davis Media, predicts that the fourth quarter will weed out an increasing number of pure-play Web sites. "You'll see more people will be coming back to traditional media companies around February or March," he says. "The Web is still going to remain vital. But instead of millions of Web sites, there'll be thousands."

Not everyone is looking to bail out of the dotcoms, to be sure. Gene Fixler, president of Ariel Associates, a New York-based executive search firm specializing in publishing, says he didn't see that many print people moving to the Web to begin with even when the Internet was going gangbusters, fueled by dumb money. But among several of his clients who did make the move, "no one has yet to call me up and say, 'Get me out of here!'"