July 25 (Bloomberg) -- Newsweek will eventually transition to an online publication, owner IAC/InterActiveCorp said today, marking the beginning of the end for the money-losing magazine’s 79-year run as a print weekly.
IAC Chairman Barry Diller made the announcement during a quarterly conference call, saying the New York-based company aims to curb investments in the business. Newsweek is projected to lose as much as $22 million this year, according to a person with direct knowledge of the matter. Still, Diller stopped short of saying the magazine would undergo a “total” shift online.
“The transition to online from hard print will take place,” Diller said. “We’re examining all of our options.”
A plan for Newsweek will be announced as early as September, Diller said. Newsweek became part of his media holdings in 2011 when it merged with IAC’s Daily Beast Co., an Internet news startup that Diller founded with former Vanity Fair editor Tina Brown. The merger was part of an agreement with the late Sidney Harman, who acquired Newsweek from Washington Post Co. for $1 and the assumption of liabilities.
Justine Sacco, spokeswoman for IAC, declined to comment on Newsweek’s losses.
IAC acquired a controlling stake in Newsweek/Daily Beast Co. in late May after Harman’s family trust stopped making capital contributions to the joint venture. IAC reported an $18.6 million pretax expense last quarter related to the move.
IAC, which makes most of its revenue from the Match.com and Ask.com websites, reported a 2.1 percent gain in second-quarter net income to $43.3 million. Sales increased 40 percent to $680.6 million.
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