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Meredith, the Publishing Company That Beat the Internet

Meredith continues to make money in magazines. What does Des Moines know that New York doesn’t?

On the eve of Valentine’s Day, news of a surprising courtship roiled the magazine industry. Meredith, the demure Iowa-based publisher of upbeat women’s service magazines (including Better Homes and Gardens, Ladies’ Home Journal, and Traditional Home), was on the verge of taking over the majority of Time Warner’s roaring glossies (including People, Entertainment Weekly, and InStyle). It seemed like an odd pairing that could be a coup for Meredith.

To begin with, there was the size difference. Meredith, with 3,300 employees and $1.4 billion in annual revenue, would be taking over the bulk of a division with roughly 8,000 employees and $3.4 billion in revenue. Like Time Warner, Meredith, which has a market cap of $1.67 billion, is publicly traded. The union would suddenly make Meredith the biggest magazine publisher in the country. Yet it was hard to imagine a couple with such different tastes. If the merger succeeded, the owners of Better Homes and Gardens would be publishing, among other things, a British lad magazine called Nuts. And every fall henceforth, the company behind Ladies’ Home Journal would be crowning People’s Sexiest Man Alive.