Bloomberg To Acquire BusinessWeek Magazine - washingtonpost.com

Image by davidcrow via Flickr

By Michael Liedtke
Associated Press
Wednesday, October 14, 2009

Bloomberg is buying BusinessWeek magazine in a deal that brings together a financial news service specializing in rapid-fire updates with a print publication struggling to adapt to the Internet's information whirlwind.

Terms of the sale, announced Tuesday, were not disclosed. Citing unnamed people privy to the negotiations, BusinessWeek pegged the acquisition price at $2 million to $5 million in cash. Bloomberg also would be responsible for paying other costs, such as severance pay to any of the roughly 400 BusinessWeek employees who might be laid off, the magazine's Web site reported.

Bloomberg, a privately held company started by Michael R. Bloomberg, now mayor of New York, expects to take control of BusinessWeek by the end of the year. That ends BusinessWeek's 80-year run as part of McGraw-Hill, which also owns the Standard & Poor's credit rating agency.

McGraw-Hill put BusinessWeek on the auction block in July, apparently fed up with the losses that have been mounting at the magazine as its advertising revenue plunged.

The acquisition represents one of Bloomberg's boldest and riskiest attempts to extend its audience beyond its main mode of communication -- the roughly 300,000 electronic terminals that it has set up in the offices of money managers, traders, bankers and other financial services professionals around the world.

Bloomberg did not immediately discuss how it might reshape the magazine's coverage or how its takeover will affect the publication's staff.

It appears that those decisions will be left to Norman Pearlstine, a former managing editor of the Wall Street Journal and Time's former editor in chief. Currently Bloomberg's chief content officer, Pearlstine will become BusinessWeek's chairman.

With a circulation of about 921,000, BusinessWeek has been doing a better job retaining subscribers than keeping advertisers. The total number of advertising pages sold by the magazine has plummeted from a peak of 6,000 in 2000 to fewer than 1,900 last year, according to the Publishers Information Bureau.

This is the second deal announced this month that gives Bloomberg a new springboard to reach a wider audience. It is also joining forces with The Washington Post in a partnership that will put Bloomberg stories in The Post's print edition and Web site and include a jointly operated news service targeting other newspapers.