June 6 (Bloomberg) -- Baba Shetty, chief executive officer of Newsweek/Daily Beast Co., is stepping down a week after owner Barry Diller said he was putting the now-online-only Newsweek magazine up for sale.
Shetty, who became CEO last September, will be replaced on an interim basis by Rhona Murphy, who has been serving as international publisher, the New York-based company said yesterday in a memo to employees.
“Baba Shetty is moving on as CEO, taking the summer off to spend some time with his family,” Daily Beast/Newsweek Editor-in-Chief Tina Brown said in the memo. “We wish Baba great success in his future ventures.”
Newsweek, the 80-year-old weekly magazine, shifted to an online-only format at the end of last year after struggling to maintain its circulation and newsstand sales. Last week, Diller said he would seek buyers for Newsweek and focus on the Daily Beast brand.
Diller acquired Newsweek as part of an agreement with the late Sidney Harman in November 2010 and combined it with his existing news website, the Daily Beast. The billionaire now says he regrets the move.
“I wish I hadn’t bought Newsweek,” Diller told Bloomberg Television in an interview in April. He said it’s become difficult to publish a weekly magazine at a time when news has become instantaneous.
Even so, the company reported last week that the online-only version of the magazine was making progress. It’s on pace to break even by the end of this year, Brown and Shetty said in a note to staff at the time.
“Our obligation was to turn the business around, and develop a breakthrough digital product,” they said. “We’ve done just that.”
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