The trendy technology magazines that cashed
in on the Internet craze are now reeling as last year's advertising
bonanza disintegrates into a miserable comedown.
The Industry Standard, the self-proclaimed weekly "newsmagazine
of the Internet economy," provided another sign of the sobering
times Wednesday by laying off 69 employees, or 16 percent of its
work force. The cuts include 18 workers from the magazine's
130-employee newsroom.
At the same time, other tech magazines are retooling their
operations as they try to survive a downturn that has turned much
worse than publishers envisioned just a few weeks ago.
The San Francisco-based magazine now has laid off 22 percent of
its staff since Jan. 1 as its holding company, Standard
International Media, unravels an ambitious expansion undertaken
during last year's heady times.
"It has been much more abrupt and dramatic than we had
foreseen," said Jonathan Weber, the Standard's editor-in-chief.
The rude awakening is triggering an upheaval at the magazines
that have become a mirror of the Silicon Valley's ups and downs.
Just last week, Business 2.0's British owners announced plans to
lay off 90 workers and disclosed they are exploring a possible sale
of the Brisbane-based magazine.
Red Herring magazine has laid off 54 workers since last fall and
Upside magazine pared its staff from 120 workers to about 90
employees since November.
"There are a lot more speed bumps in the landscape this year.
No one is clicking their heels in joy," said David Carey, who
oversees the technology magazine Fast Company for German owners
Gruner + Jahr.
Magazine executives and analysts say they wouldn't be surprised
if two or three of the tech magazines disappear this year, either
through sales or closures.
"They lived in a bubble for a year, and now that bubble is
bursting," said Samir Husni, a University of Mississippi
journalism professor who tracks the magazine industry.
The advertising slump underlying the shakeout has hurt a broad
spectrum of media, but the pain has been most acute at print
publications and Web sites dedicated to technology news. This media
sector received the bulk of its revenue from technology advertisers
that are pulling in their reins in the face of a dot-com shakeout
and an uncertain economy.
"Even the people who have the money in their budgets aren't
spending it right now," said Larry Kramer, CEO of Marketwatch.com,
a financial news Web site that hasn't been as hard hit by the
downturn as the tech magazines.
The tech magazines had been making scads of money, encouraging
them to rapidly expand their staffs and hold extravagant technology
conferences.
The Standard, for instance, tripled its advertising revenues
last year to $158.7 million while selling more ad pages — 7,440 —
than any of the 254 other magazines tracked by the Publishers
Information Bureau, an industry trade group.
Other tech magazines enjoyed similar boons.
The magazine publishers entered 2001 knowing they had little
chance of matching last year's performance, but none thought
advertising would disappear so quickly.
Through March 6, total ad pages at the tech magazines were down
anywhere from 25 percent to 60 percent, according to industry
reports. The Standard had sold 459 ad pages through March 6, Weber
said, down by about 60 percent from the same time last year.
The magazine's revenue loss hasn't been as severe, Weber said,
because the Standard's rates are 75 percent higher than last year.
Other tech magazines are also charging more for space, thanks to a
growing readership.
But the higher ad prices and bigger audiences haven't been
enough to shield the magazines from the technology industry's
turmoil.
"Everyone is going to be under a lot of pressure this year,"
Weber predicted.
