IAC has confirmed reports that it's seeking a buyer for the hobbled newsweekly, which has already been sold twice in the past three years, then ended its U.S. print edition. In a memo, The Daily Beast editor Tina Brown and CEO Baba Shetty explained the rationale in a memo, saying that while Newsweek had become a "breakthrough digital product," it was a drain on the Beast.
"Newsweek is a powerful brand, but its demands have taken attention and focus away from The Daily Beast," they wrote. "The story that hasn't been told about The Daily Beast is its strength."
At this point, Newsweek’s decline and predicted demise are well-trod ground. The once-venerable Newsweek used to have a circulation topping 3 million, but had fallen to less than half of that when it went digital-only this year. The move would save IAC money and enable Newsweek to make good on the copies it owed subscribers (Newsweek carried a $30 million circulation liability), but no one in their right mind expected a paid, digital magazine to be a viable option.
Newsweek always seemed to be the neglected child since IAC acquired it as part of a 2010 deal with the late audio magnate Sidney Harman (he having just months before took it off the Washington Post Co.’s hands) to combine it with Tina Brown’s The Daily Beast. If the writing wasn’t on the wall already, Barry Diller’s sentiments were unmistakable earlier this year when the IAC chairman publicly called buying Newsweek a “mistake.” Given Newsweek only fetched a grand $1 plus debt the first time around, the price this time would be similarly negligible.