The Name Game: Selling Brands for Fun and Profit

It's hard enough with jeans or diet sodas, but imagine the challenges in selling the brand names of newsmagazines that no one under the age of 40 really remembers anymore.

Newsweek was a once venerable brand in the news business. It was one of two newsmagazines - the other being Time - that were respected, even powerful. Their opinion on matters of taste, mores and politics actually mattered.

Out of respect for that legacy, billionaire mogul Sidney Harman bought the name at auction from the Washington Post, which had owned it for decades but could no longer support its unprofitable existence. It was then sold last year to IAC media mogul Barry Diller who many believed would apply his magic touch and revive it. That pipe dream ended when he announced in the past week that he would attempt to sell the name and the archives.

There has been a market for aging, even extinct, brands in the internet era. Consumer goods with catchy, upbeat titles like Fab or Tab have been thought to have some residual value to the aging Boomer market as they mix sentimentality with more money than sense (none of these brands are generally associated with healthful, environmentally sensitive behavior). But since we are in an information age, shouldn't brands based on the conveyance of information be able to command some sort of premium?

Ehhh, probably not. The problem for this brand owner is twofold; first of all, we are now in the era of custom, boutique news. We find the data and the opinions that support our predispositions. In the on-the-one hand versus the other continuum, are heavily committed to the one and dont much care to hear or see the other. Secondly, let's think about the title: Newsweek? How about Newsnanosecond? That would probably be more attuned to the contemporary zeitgeist. 

There may be a market for old magazine covers as birthday gifts for those born in the 'wonder years' before computers. And journalists or librarians may value the reference materials in the magazine's archives though one wonders how much they'd be willing to fork over for that. But the larger issue is that in this information rich society, the legacy value of relatively undifferentiated brands is a buyers' market and they probably dont need a big checkbook. JL

Keach Hagey and Christopher Stewart report in the Wall Street Journal:

Nearly six months after closing the 80-year old newsweekly's print edition, making it digital-only, IAC/InterActiveCorp IACI -0.56%. is exploring a sale of the title, Mr. Diller, who is IAC chairman, said.

Selling Newsweek will allow IAC to focus on the Daily Beast, its Web publication that merged with Newsweek in 2010, he said.

"Newsweek is a powerful brand, but its demands have taken attention and focus away from the Daily Beast," said Editor in Chief Tina Brown and Newsweek Daily Beast Chief Executive Baba Shetty in a memo to staff.

Available in the sale is Newsweek's storied brand, decades-old archive and its digital subscriber list, according to people familiar with the matter. A sale will also require the disentangling of Newsweek's Web presence from the Daily Beast's website, where the newsweekly is now hosted.

"It's a ghost of what it was when we made a bid," said Christopher Ruddy, the CEO of Newsmax, one of the bidders for Newsweek in 2010, when it was sold by longtime owner Washington Post Co. WPO -0.04%for $1 to audio-equipment tycoon Sidney Harman. IAC took a stake shortly afterward and full ownership in 2012—a move Mr. Diller described last month to Bloomberg TV as "a mistake."

Any buyer will likely come from a different pool of suitors than chased the newsweekly the last time it was for sale, as several former suitors said they are no longer interested.

A buyer would have to assume a potential liability: the risk that former print subscribers with time on their subscriptions could ask for their money back if they decide they don't want the digital edition. The company expects that liability to shrink below $10 million by the end of the year, according to a person familiar with the matter.

So far Newsweek has amassed about 470,000 of its subscribers to its tablet edition, according to a person familiar with the situation. That represents a significant improvement from the 41,500 it had at the end of last year, according to the Alliance for Audited Media, but a far cry from its 1.4 million print circulation when it went to digital-only.

One positive is that heavy losses have been brought under control. Killing the print edition in December helped reduce costs by about $40 million, in part by shedding half its 270-person staff. Ms. Brown and Mr. Shetty told staff in their memo Wednesday that the title will "break even" in the fourth quarter of this year.

Still, a sale isn't certain. If IAC doesn't find the right buyer, the company would keep the newsweekly going "as now," according to Wednesday's staff memo.