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The Opportunities and Casualties of the Time Inc. Spinoff

Synergies were never exactly great

SI.com

With Time Inc. spinning off from Time Warner early next year, what will happen to the corporate entanglements between the two? The fact is, there hasn’t been that much synergy to speak of, but some relationships will be affected. Those in the crosshairs include:

CNNMoney.com
The spinoff’s biggest casualty is its 8-year-old JV with Fortune and Money that will end in May 2014 after the magazines lose their online home and have to start sites from scratch. On the other hand, it could be a chance, especially for Fortune, to finally forge strong identities as stand-alone sites.

Time magazine
The newsweekly will have to replace the traffic referrals it gets from CNN.com, though they have dwindled over the years from as much as 30 percent to less than 10 percent today. Time has been building up its online staff in preparation for a relaunch in late fall, which it hopes will offset the loss of the CNN traffic.

Ad Pages
Time Inc. brands got 1 percent of their 2012 ad volume from Time Warner entertainment properties, the biggest beneficiary being Entertainment Weekly. So a loss of those pages is unlikely to have much impact.

Sports Illustrated
Its ill-fated online sales relationship with Turner has ended, as has its traffic-referral partnership with CNN.com. SI got a quarter of its traffic from CNN, a loss SI said it has since made up for. However, Turner still provides SI.com’s platform, which will go away.

Time Warner Medialab
Opened in 2012, the lab has been an important resource for Time Inc. brands in testing their apps and figuring out how consumers use their sites and buy their magazines. As such, it has been popular with advertisers and editors alike. It’s uncertain whether the relationship will continue, but Time Inc. and the Medialab are in discussions to possibly partner post-spinoff.

The Time Warner-Time Inc. combo was supposed to lead to all kinds of synergies in news, sports and entertainment. But current and former execs said, with great frustration, that it has been easier to work with non-Time Warner companies to get editorial talent and franchises like Time’s Person of the Year and People’s Sexiest Man Alive promoted on-air.

“They will do absolutely nothing organically,” said one. “They had a megaphone we could never get them to use.” If anything, the spinoff may actually lead to more cooperation, those who were interviewed said, as the two sides may be more inclined to cooperate if they’re not forced to.

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