Plan B from Cyberspace

Deanna Brown was late for dinner, but she had a good excuse. The president and CEO of Powerful Media, whose ambitious subscription-based website Inside.com set out in May to become the Daily Variety of cyberspace, had been held up at the office, she told her friend, finalizing the debut issue of [Inside], her company's new magazine. That's right, magazine--as in a sheaf of stapled-together pages covered in ink and distributed by snail mail. How ironic. How 20th century. Here she was, a brash entrepreneur in the brave new world of Web-based publishing, stuck with the old-fashioned job of selling ad space and shipping proofread pages to the printer.

Brown is not alone. Like the wagon-train homesteaders who traveled west only to straggle back to civilization when their crops didn't grow in the thin soil, the pioneers behind Inside.com--magazine veterans all--and a number of similar websites have seen the future, paused, reflected and decided to trek back to the past. Along with [Inside], new magazines such as Space Illustrated, Nerve, Travelocity and Expedia Travels have morphed from their cyber origins. What happened?

For Inside.com it's what didn't happen--revenues. In an interview with the New York Times, Brown admitted that her website fell short (some suspect far short) of its original goal of signing up 30,000 paying subscribers at about $200 a pop. Like other online information sources, from Microsoft's Slate.com to TheStreet.com Inside.com overestimated people's willingness to spend real money for a virtual product. "It's one of the Darwinian realities of starting a new business now," says Michael Hirschorn, co-chairman of Powerful Media. "You don't have the luxury to kick back and say, 'Let's build brand awareness' and 'leverage eyeballs.' You have to prove yourself very quickly."

With so many e-businesses crying "Backward, ho!" in a rush to reach solid commercial ground (and Web-related magazines like Business 2.0 and the Industry Standard seeing a slump in advertising), it's hard to figure out who's leading the charge. Are the print magazines supposed to lure customers to the websites, or are the websites portals to the magazines? Both, it turns out. And neither. Expedia Travels is not the official magazine of Expedia.com asserts Gary Walther, the magazine's editor in chief. The connection is purely commercial, a sort of code-sharing agreement for generating customers for each enterprise. "We promote the magazine on the Expedia website," he explains. "It's a much cheaper way of getting circulation than direct mail. For its efforts, Expedia gets a high-profile magazine with its name on it."

Nerve, a magazine of nerdy erotica founded on the premise that people with glasses can be sexy too, is a more straightforward extension of the website. Genevieve Field, the company's co-founder, claims that her company intended all along to commit to print its fleshy pictorials and ooh-la-la advice columns. Having built up a readership--and a lookership--on the Internet, Nerve intends to stretch out on paper with longer articles and richer photo spreads. At its launch six months ago, the magazine claimed a circulation of 50,000. Now it's around 70,000. In some ways, Nerve's print edition is an improvement on its electronic version. For one thing, the naughty pictures are much crisper.