FEATURES: WHEN THE BUBBLE BURSTS - Like the market they report on, magazines in the internet and high-tech sector are facing tough times

<p>It's hard not to notice that new-economy magazines, which once arrived </p><p>inch-thick on office desks and newsstands, are rapidly shrinking in </p><p>size. </p><p><BR><BR> </p><p>Publications like Wired, Red Herring and The Industry Standard, that </p><p>used to rival issues of Cosmopolitan and Vogue, now barely make it to a </p><p>hundred pages. Ad sales for magazines covering the dotcom sector have </p><p>plunged, with too many salespeople left trying to wring ad revenues out </p><p>of bleeding dotcoms and staggering technology companies. Layoffs that </p><p>were initially limited to internet and tech news websites have started </p><p>to spread to print publications. </p><p><BR><BR> </p><p>As most publishers will admit, those internet magazines that relied </p><p>heavily on dotcom cash last year are having to raise ad rates, combine </p><p>issues, and search for new funding and partnerships. Some news </p><p>publications are claiming that their advertising base has broadened, </p><p>with placements from companies in the upscale-consumer and mainstream </p><p>sectors, as well as financial services. </p><p><BR><BR> </p><p>One thing is certain: like the technology industry itself, the </p><p>technology magazine industry is coming off a phenomenal year. Consider </p><p>Business 2.0, which pulled in an astounding 328 ad pages for its May </p><p>issue last year. </p><p><BR><BR> </p><p>The title's May 15 issue this year brought in only 40.16 ad pages - an </p><p>almost 88 per cent dive in ad sales. </p><p><BR><BR> </p><p>The Industry Standard, which last year tripled its advertising revenue </p><p>and sold more ad pages than most other tech magazines in the industry, </p><p>increased its ad-page count by 139 per cent in the first 10 months of </p><p>2000, compared to the same period in 1999. The title, which took in 224 </p><p>ad pages for its May 15 issue last year saw advertising drop to 29 pages </p><p>in its May 14 issue this year, representing an 87 per cent decline in </p><p>advertising. </p><p><BR><BR> </p><p>Red Herring too made news as it announced the lay off of 54 workers, or </p><p>20 per cent of its staff, as it continued to dismantle an expansion plan </p><p>undertaken during last year's blitz in tech advertising. The firings </p><p>marked the third round of cutbacks made by the publication since the </p><p>third quarter of last year. Red Herring, along with other US titles, </p><p>went on a hiring spree when the size of some editions swelled to more </p><p>than 600 pages. It also switched from monthly to bi-weekly last year. </p><p>Although Red Herring was able to charge higher rates for advertising </p><p>space as it almost doubled its paid circulation to about 325,000, the </p><p>title's ad revenue fell for the first time in April this year, dropping </p><p>24 per cent from last year to USdollars 4.8 million. </p><p><BR><BR> </p><p>That's not say US-based tech titles are the only ones suffering. Asian </p><p>internet titles are also feeling the pinch as competition heats up and </p><p>revenues fall. And there are signs of a chilling market everywhere. </p><p>Probably not the most auspicious time for Penton to launch its Internet </p><p>World title in Asia, then. </p><p><BR><BR> </p><p>"I think it is quite important when you look at this market you also </p><p>distinguish between the internet industry, which is relatively small, </p><p>and the enterprise and corporate market, which includes the medium to </p><p>large enterprises," says Internet World publisher, Robert Ferguson. </p><p><BR><BR> </p><p>It's not the dotcoms, but the mainstream corporate market that Internet </p><p>World is targeting. "The enterprise and corporate market is the number </p><p>one spend for any company at the moment. It's not IT any more, it's more </p><p>internet-related information that people want. This isn't just </p><p>e-business: it's the back-end logistics, e-procurement, it's all the </p><p>seamless integration and other issues which we feel at the moment no one </p><p>is really covering in great detail. </p><p><BR><BR> </p><p>"If you ask anyone about the pre-eminent brand for internet magazines, </p><p>there's no ready answer. I think maybe if you look at the more IT side, </p><p>Computer World would come up. But, if you ask people what the </p><p>pre-eminent titles are for internet-related or e-business information, </p><p>it's going to be The Industry Standard, Red Herring, Business 2.0. Those </p><p>are not Asian publications, and their distribution here is limited to </p><p>around 500 to 1,000 copies in each market, which is quite small. There </p><p>is still room for a high-standard new-economy magazine here." </p><p><BR><BR> </p><p>Many Asian titles are vying for that position. The advertisement </p><p>director of Singapore-based Intelligent Enterprise Asia (IEA), Caroline </p><p>Quek, claims that the publication has doubled advertising this year and </p><p>has already met its sales target for 2001, albeit the magazine was only </p><p>launched in March. "We started out during the period of e-business hype </p><p>when a lot of dotcoms were launching. At the same time there were also a </p><p>lot of news websites coming up. Our magazine is for CEOs and decision </p><p>makers. During our launch, circulation figures were 15,000 and after </p><p>fine-tuning, we now have a 14,500 circulation base, which at the moment </p><p>is mostly in Singapore. </p><p><BR><BR> </p><p>"We believe the tech industry is still spending, so are other sector </p><p>such as banking and finance. The problem we had last year was that not </p><p>many people knew what the magazine was about. Now we have a readership </p><p>and our advertisers feel safer spending with us because we have proven </p><p>ourselves. But the shift for us has been from tech to business. The </p><p>other factor was that when we launched, many clients had already </p><p>committed their budgets for the year, which meant that we spent much of </p><p>last year building relationships." </p><p><BR><BR> </p><p>Another magazine staking its claim to be the leading Asian internet </p><p>title is media's sister magazine Revolution. Publishing director Andy </p><p>Bridge says advertising support for the title has been encouraging since </p><p>its launch last year. "Obviously the recent downturn has had an effect, </p><p>but we never set ourselves up as a dotcom magazine or a pure technology </p><p>magazine. </p><p><BR><BR> </p><p>We're a business and marketing title looking at new media, and whatever </p><p>the current fallout or readjustment, it's obvious new communications </p><p>platforms present new opportunities and new challenges for businesses in </p><p>general and marketers in particular." Bridge adds the magazine's </p><p>advertising was 20 per cent up on its targets at the end of last </p><p>year. </p><p><BR><BR> </p><p>The region's internet titles are facing increased competition from </p><p>broader publications such as BusinessWeek and Asiaweek, which recently </p><p>re-invented itself as 'Red Herring meets Fortune meets Vanity Fair'. The </p><p>Time Inc-owned magazine launched with the new tagline 'Redefining </p><p>business'. </p><p><BR><BR> </p><p>Ferguson adds that competition from business titles for tech-savvy </p><p>readers is likely to continue. "The general business books such as </p><p>BusinessWeek, Asiaweek, The Asian Wall Street Journal, Fortune and </p><p>Forbes make a very broad market for business-related news, but all of </p><p>them have just jumped on the internet bandwagon because the information </p><p>need for corporate executives is very great now. They have come out with </p><p>tech supplements that we are likely to see more of." </p><p><BR><BR> </p><p>Newspapers are getting in on the act, too: the South China Morning Post </p><p>is extending its tech coverage from a weekly supplement to daily </p><p>coverage in its business section. And internet magazines also have to </p><p>compete with news websites and email newsletters. </p><p><BR><BR> </p><p>AdXplorer CEO Antony Young comments: "Shame on anyone in the online </p><p>marketing business that doesn't choose the online publication ahead of </p><p>the printed version as their first read. The online titles generally </p><p>offer more up-to-date info, better interactivity through chat, and more </p><p>regular contact via newsletter services. And I can say from experience </p><p>that these get much better response from their advertising. </p><p><BR><BR> </p><p>"What makes this magazine category tough is that they face competition </p><p>from the online players, which are of a high standard, and general </p><p>publications that are more heavily covering internet stories. Look at </p><p>the freshly re-launched Asiaweek - they see themselves talking to the </p><p>young, wired and rich. There is only room for probably one player in </p><p>this crowded space that can be financially supported with advertising. </p><p>The one left standing will likely be the one most committed to adding </p><p>insightful perspectives." </p><p><BR><BR> </p><p>Some of the biggest victims of the dotcom gloom have undoubtedly been </p><p>content sites. The editor-in-chief, Asia of internet.com, Elaine Ee, </p><p>recently announced the site would "no longer publish individual </p><p>newsletters based on city or country sites in Asia". </p><p><BR><BR> </p><p>Ferguson explains Internet World will not be making its content </p><p>available online in the near future. "If you look at the online </p><p>properties at the moment, they are having a tougher time than anybody. </p><p>Internet.com has closed its Hong Kong operation and I think the </p><p>information needs of internet industry executives are probably met by </p><p>what is out there at the moment, so until we can come up with something </p><p>more valuable, or a better offer, I don't think we're going to do </p><p>that." </p><p><BR><BR> </p><p>With a circulation of 16,000, the first issue of Internet World is out </p><p>this month. Ferguson remains optimistic, but strikes an understandable </p><p>note of caution. "We will of course be struggling as well. It is a tough </p><p>time for a launch in the second quarter with tighter budgets. And I </p><p>think we will see a lot of consolidation in the market. There will be a </p><p>divide between those that are going to retrench, such as internet.com, </p><p>and more established titles that are going to make a real go of it." </p><p><BR><BR> </p>