G+J Business Unit Plans Integration, Acquisitions

Folio: The Magazine for Magazine Management, March 1, 2001 by Cindy Gillis

Job-one will be to end declining ad sales at Inc. and Fast Company, says new chief David Carey.

* Gruner Jahr USA's new business group plans, long-term, to position itself as a multimedia powerhouse of business-related magazines, newsletters and conferences. But right now the focus is on the magazines that G J spent at least $550 million to buy last year. And the first order of business is to bolster declining ad sales, says David Carey, president and CEO of the company's newly formed Business Information Group.

Fast Company is strong editorially, Carey says, but emphasis will be put on building sales and marketing. "The category that Fast Company is in, which straddles both new economy and business, has been under a lot of pressure this year--all the magazines are way, way off in terms of their pages, Fast Company included," he says.

In January, Fast Company's 74 ad pages and Inc.'s 52 pages showed little to no growth compared to January 2000, according to numbers from Publishers Information Bureau. "The economy is soft; very few magazines are doing very well from an ad standpoint this year, in general," Carey says. "But that's okay--we think it's going to be short-lived."

Carey is also taking a look at back-office operations, integrating the dot-corn businesses and redesigning Inc. for a September debut.

"We're going to look for really clever ways to package the two titles," he says "The magic will come through one plus one equals more than two."

The editorial identities of Fast Company and Inc. will remain distinct, but the consolidation of sales, marketing, distribution and fulfillment are all on the table, says Carey, who left his post as publisher at The New Yorker in mid-January to head up G J's business group.

Carey says the redesign of Inc.--details of which are not yet settled--and the integration of the dot-coms, which could include sales and technology partnerships, are ongoing. G J recently dramatically scaled back Inc.com, laying off 37 of 53 employees and retooling the site to highlight editorial content and drive sales.

To grow the company, Carey says he is considering consumer and trade title acquisitions, custom publishing, a newsletter company and expanded conferences. Television and radio tie-ins for Fast Company and Inc. are also possibilities, he says.

Carey acknowledges that the business plan is bold as ad pages slip throughout the industry and an economic downturn threatens. But he says an ambitious outlook is necessary. "The people who are going to win when the economy bounces back are the people who are making their moves right now. It's very clear that Bertelsmann is a very aggressive investor and has a long-term point of view, so now is the time to build up the units."

Bertelsmann AG owns 74.9 percent of G J USA, which also publishes Family Circle, Fitness, YM and Rosie, while the Jahr Group owns the remainder.

Major publishers, including G J, Conde Nast and Time Inc., will continue to acquire titles, Carey says. "The world has become one that's increasingly focused on consolidation, big-picture thinking," he says. "All of the single titles that exist out there--most of them, I think, in the next 24 months will be consumed by larger organizations. It's kind of sad, but I think it's true. The trends are very powerful."