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The Daily Beast weds Newsweek
By Jonah Raskin / The Rag Blog / November 16, 2010
Mergers of media giants usually attract attention in the media, and for the moment the merger of Newsweek and The Daily Beast is big news. Tina Brown is back — perhaps bigger than ever before. The former editor of Vanity Fair and The New Yorker, and the founder and the editor-in-chief of The Daily Beast, Brown described the merger as a “marriage,” and added that some marriages take longer than others to happen.
Brown brings a certain amount of sex appeal with her to her new job at Newsweek, as well as considerable experience in print media. But her sex appeal and her experience hardy seem enough to rescue the 75-year-old news magazine and rival of Time that is owned by Sidney Harman — now 92-years-old; it will take more than Brown to prevent the sinking of that hoary old beast, Newsweek.
It’s estimated that Newsweek will lose $20 million this year; The Daily Beast — that’s owned by Barry Diller’s Inter Active Corp (IAC) — is only expected to lose $10 million this year. IAC also owns Evite and Excite and more. Newsweek thinks that online journalism and information is the shot in the arm that it needs; The Daily Beast thinks that Newsweek will add credibility. If it’s a marriage, as Brown says it is, than It’s more like a shot-gun marriage than a marriage of true love.
In either case, no one under the age of 25 is reading either Newsweek or The Daily Beast, which is a good reason advertisers are not flocking to either of them. The marriage —or merge — between the two of them seems like an act of desperation more than anything else.
The bigger story that the merger hides is the crisis of old-fashioned print media that print media doesn’t want to face, and doesn’t want to write about. It’s one of the biggest news stories of our time, and it’s not going to go away. It’s bigger than TV or the movies or radio, and one of these days we’re going to read a news story that says “Newsweek Closes Shop.”
Jonah Raskin is a professor of communication studies at Sonoma State University.]
Coincidentally, the board chairman of the Washington Post Company that owned Newsweek between 1961 and 2010, Donald Graham, also now sits on Facebook Inc.’s corporate board. As the Wall Street Journal observed noted in a Dec. 11, 2008 article:
“Facebook Inc. announced that Donald Graham, chairman and chief executive officer of the Washington Post Co., will join the social-networking site’s board of directors…The high-profile media executive already has a close relationship with the company as a friend and mentor to its…chief executive Mark Zuckerberg. Mr. Graham also offered to personally invest in Facebook at its infancy, say people familiar with the matter…”
Also coincidentally, Newsweek only apparently managed to survive the Great Depression of the 1930s because it previously merged in 1937 with a weekly journal—Today—that had been founded in 1932 by Vincent Astor and Averell Harriman (who later became a governor of New York State). As a result of this merger, Astor and Harriman provided Newsweek with $600,000 in additional venture capital funds and Vincent Astor became both Newsweek’s chairman of the board and its principal stockholder between 1937 and his death in 1959; at which time he left the Vincent Astor Foundation an estate of $123 million [in late 1950s money].
In addition to utilizing his inherited wealth to subsidize the publication of Newsweek between 1937 and 1959, Astor also built drilling barges for off-shore oil development, invested in oil ventures in the Southwest, and was a director of American Express, Western Union and Chase National Bank.
The 1961 deal which enabled Facebook Inc. and Washington Post Company board member Graham’s parents to purchase Newsweek from the Vincent Astor Foundation and Harriman, was arranged and financed in such a way that David Halberstam described it as “one of the great steals of contemporary journalism” in his book The Powers That Be. The same book noted that, although the official 1961 selling price for Newsweek was $15 million, “in the end no more than $75,000 really changed hands.”
So it might be too soon to exclude the possibility that preserving the Newsweek brand label in an online form might turn out to be a project that one of the current members of the U.S. plutocracy might would eventually see as being useful–as a means of continuing to manipulate U.S. public opinion in the 21st-century digital age.