Beauty and the Beast?... W’s Nathalie Kirsheh Heads to Details...

Ever since news broke that The Daily Beast owner Barry Diller was talking to Newsweek owner Sidney Harman, there have been rivers of speculation.

BEAUTY AND THE BEAST?: Ever since news broke that The Daily Beast owner Barry Diller was talking to Newsweek owner Sidney Harman about a potential partnership, there have been rivers of speculation as to what a deal between the relatively new Web site edited by Tina Brown and the old-school newsweekly (that’s currently without an editor) would look like. But a more important question is: why would the Beast, which posts buzz worthy stories and has been luring a string of top talent — the latest being Howard Kurtz from The Washington Post — want to associate itself with the beleaguered Newsweek? A quick look at Newsweek’s numbers doesn’t seem to give an answer: In the first half, the magazine was down 30 percent on the newsstand and 40 percent in overall circulation. Advertising fell 13.5 percent year to date, according to Media Industry Newsletter, and Publishers Information Bureau had ad pages down 26 percent last year.

So what gives? The Daily Beast’s owner, IAC, isn’t in the magazine publishing business, and Diller’s career has never involved newsprint; instead, he’s totally focused on broadcast and digital media. One clue, though, could come from a quick look at Web traffic. As the Beast celebrates its second anniversary this week, its traffic is slipping. According to Internet tracking firm comScore, The Daily Beast registered 2.2 million unique monthly U.S. visitors in September — a six-month low. Traffic at, meanwhile, was more than twice that during the same month, with 6.2 million uniques. Although the magazine’s Internet traffic is erratic — it showed a six-month high of 7.2 million visitors in April and a low of 3.8 million in July — its name recognition and partnership with have it consistently outpacing the Beast.

The Beast rather infamously launched without a business model, and Diller has said he doesn’t expect to make money on the operation in its first two to three years. In interviews, he has professed a desire to move beyond the traditional display ads that dominate on the Web in favor of a new, presumably more lucrative, Internet advertising model. The plan hinges on the Beast building a strong enough brand — which, if traffic is any indication, hasn’t yet happened, despite Brown’s best efforts. Harman was said to have approached her about editing Newsweek, an offer she seemed to have turned down before then perhaps nudging Diller to look into some kind of deal with Harman.

While the traffic data might provide a partial explanation as to why Harman and Diller are in talks, there are still plenty of details to work out, including which of the billionaires will be in the driver’s seat. Billionaires having healthy egos, the talks — even if they are preliminary — could still come crashing down.

Meanwhile, as Newsweek staffers yet again wait to hear of their fate, they at least received a bit of concrete information on Thursday. Management told employees that the magazine’s offices will relocate to 7 Hanover Square in Manhattan’s Financial District the weekend before Thanksgiving. That is, if a deal with IAC isn’t done before then.

— Amy Wicks and Matthew Lynch

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