A band of respected Webzines is hoping for strength in numbers.
Feed Magazine (www.feedmag.com) and Suck.com (www.suck.com), two of the Web's oldest publications, are expected to announce Monday that they are joining forces. Both sites will become the anchor properties of a new company called Automatic Media Inc. that plans to acquire more Web content and technology companies, using $4 million in fresh venture capital financing. Automatic Media's first acquisition: Alt.Culture, an online encyclopedia of alternative culture with entries on everything from acid jazz to Zapatistas.
The combination of the Webzines comes amid a painful shakeout among some of the Web's best known publishers. APB Online Inc., a publisher of crime news on the Internet, last week filed for Chapter 11 protection in New York after guzzling $27 million in cash in less than two years of existence and laying off more than a hundred employees. Last month, Salon.com Inc., the politics and culture news publisher, laid off 13 staffers and slashed its operating budget for the fiscal year 20 percent.
The Web was supposed to make it easy for startup media moguls to publish and distribute their online magazines for a pittance compared with the costs of putting out print magazines. But it didn't work out that way. The recent turmoil has only added to longstanding questions about whether advertising alone can sustain the enormous costs of producing and promoting original content online.
"We have high-quality content -- we don't want to throw that away," says Steven Johnson, the editor-in-chief and cofounder of Feed, best known for publishing thoughtful pieces on technology and pop culture. "But we don't think you can build a business just on the back of that."
Executives from Feed and Suck.com say the plan behind Automatic Media was actually in the works long before the recent troubles at Internet publishers. Still, the move to link their sites and others into a more tightly integrated "network" of Web properties reflects a more sober view of the growth potential of independent Web publishers.
All of the sites owned by Automatic Media will share a common advertising sales force, technology and administrative resources, a move that should cut costs and increase the efficiency of individual sites. The Webzines will maintain their distinctive brand names and editorial voices, though they plan to weave hyperlinks to each other throughout their respective sites.
So far, Feed and Suck have managed to avoid the problems of more free-spending Web publishers by running modest operations. Both sites were created in 1995 by two-person teams. Feed was the brainchild of two Ivy League-educated free-lance writers, Stefanie Syman and Johnson, who saw the Web as a good outlet for their literate brand of journalism. Recent features have included thoughtful pieces on robots and the "semiotics of travel." The site's staff gradually grew to eight full-time employees.
By avoiding the heavy spending on advertising and promotional deals typical of other Web startups, Feed has kept its cash "burn rate" relatively small: The site has spent less than $2 million since its inception, according to Syman, the executive editor of Feed.
Suck.com, founded by two 20-something Web producers, Joseph Anuff and Carl Steadman, gained a loyal following with its jaded daily attacks on badly designed Web sites. Later it broadened its targets to pop-culture phenomena in general. Suck was acquired by Wired Ventures in 1995 and later sold to Web portal Lycos Inc. (lcos) with Wired's Internet properties.
Anuff says Suck has been profitable for two years. The site, which sometimes features a mere two Web pages of new material a day, is put out by a small staff of two full-time employees and a collection of free-lancers. And while its connection to Lycos gave it a better footing than other Webzines, Anuff says it was a struggle for Suck to get noticed within the Lycos empire.
"It takes so much energy to lobby for your properties when you're a two-person shop in a company with probably thousands of different employees," he says.
Under an agreement with the new company, Lycos will contribute Suck.com and promotional support to Automatic Media. The $4 million in funding is coming from Lycos Ventures LP, a venture firm affiliated with Lycos; Paladin UK; and Advance.net, the Internet arm of the Advance Publications print-media empire. Automatic Media has hired a chief executive officer, Lee deBoer, a longtime executive at Time Warner Inc.'s (twx) Home Box Office.
Automatic Media doesn't expect most of its growth to come from hiring teams of high-paid journalists and writers to expand editorial operations. Instead, the company plans to place a growing emphasis on user participation in discussions about the stories and columns on Feed, Suck and other editorial sites. That approach, aimed at attracting advertisers as the user base grows, has the double advantage of being highly interactive and relatively cheap.
Web sites, including Feed, have long had message boards where readers can sound off on various topics. But Automatic Media says it is developing a new high-tech message-board system that will let users more easily filter out the irrelevant or uninteresting messages that often plague discussion communities. Automatic Media is developing the system with the help of Slashdot.org, a Web community site owned by VA Linux Systems Inc.
Even some of Automatic Media's investors say they would be a bit skeptical about investing in a traditional Web "content" company. "That's not what we're investing in," says Jeff Jarvis, president of Advance.net. "They are onto the next generation of content."
