UPDATE After months of false starts and strained negotiations, AOL Time Warner's Fortune Group has finally reached an agreement to acquire Future Network-owned Business 2.0 magazine, the Fortune Group announced Thursday.
Although the publishing group didn't detail the financial structure of the deal, two sources familiar with the transaction said the price tag would total about $65 million to $70 million.
That price is far below Time Inc.'s original offer of $125 million in December, before the gut-wrenching advertising decline that hobbled the finances of every new-economy magazine, including The Industry Standard. The price, however, is more than double the estimated $30 million low-ball price Future Network was expected to fetch for Business 2.0.
As expected, AOL Time Warner will combine its eCompany Now monthly magazine with Business 2.0. It will be relaunched in September as Business 2.0 with an expected circulation of 550,000, a huge increase over eCompany Now's current circulation of 375,000 and Business 2.0's 350,000. The new circulation would be lower than the current combined circulation of the two magazines because subscribers who receive both are removed from the combined figure.
"Drawing on the resources of Time Inc. and AOL Time Warner, we are wholly committed to making Business 2.0 the voice of this business market, and No. 1 in its space," said Fortune Group editor John Huey in a statement. "Our journalists see this as a great opportunity to continue developing a distinctive approach to new kinds of business coverage."
The Business 2.0 and eCompany Now Web sites will be relaunched as Business2.com. The AOL online service is expected to heavily promote the new magazine, according to a statement. Neither magazine will be published for the month of August.
ECompany Now editor and President Ned Desmond will assume the same roles at the combined publication. "The Business 2.0 magazine and Web site are going to be essential tools for navigating today's relentlessly changing marketplace, particularly as it's driven by technology and the Internet," he said in a press statement.
The news broke at company-wide meetings that took place at the respective offices of the two San Francisco-based magazines, according to sources at these meetings.
No details were given as to which employees of Business 2.0's estimated staff of 80 would be invited to join the new magazine. Earlier, Business 2.0 employees were told by executives that a handful of employees might be offered jobs at the newly combined venture.
Despite the uncertainty created by the long-anticipated news, staffers said the mood at Business 2.0 was one of relief.
Neither company returned calls requesting comment.
