Summary:

The official word is out from MGH, in a carefully worded release: “The McGraw-Hill (NYSE: MHP) Companies today announced that it is explorin…

Business Week Cover 3

The official word is out from MGH, in a carefully worded release: “The McGraw-Hill (NYSE: MHP) Companies today announced that it is exploring strategic options for BusinessWeek. BusinessWeek is a globally respected brand and one of the world’s leading sources of essential and trusted content that informs and inspires business leaders to make smarter decisions in their professional and personal lives.”

So who would buy BusinessWeek in this environment, and under what conditions? For one, the number of strategic *and* interested buyers is low, and the names we have thrown out before include Bloomberg and Dow Jones (NYSE: NWS). But that’s if we only look at options for BW as the print brand with lots of legacy issues. The topline revenues at BW are in the $125 million and above range, as I understand it. Online contributes about a quarter to that.

One top-level source at a rival mag I spoke to said that “no one with full intelligence would buy the whole magazine as is.” For the print, the path is clear: the changes and decline in the revenues and circulation is secular, NOT cyclical. Another source told me the TVGuide magazine sale would be a good ballpark; the magazine sold for $1, with the assumption of liabilities by the PE buyer. That’s harsh.

Which means that there would be some hard decisions to make, both by McGraw-Hill as the sale process goes on, and for the eventual buyer, if they find one. This could involve reducing the frequency of publication for the weekly mag, or, if someone’s brave enough, ditching the print piece altogether, and focusing on the website and data business. The data side is interesting, but complicated: MGH also owns S&P and CapitalIQ (the latter is a division of the former, technically), two of the main sources of data for BusinessWeek, the website and the mag, and they aren’t likely to be on the market anytime soon. This could also mean that MGH may not be able to cut off the BW ties completely, and the buyer may not want to either. It has a small events-and-training-programs business as well, but not enough to move the needle for a buyer.

One buyer could be AOL (NYSE: TWX), if the print part gets cut out completely: AOL, as it is spinning out from Time Warner, has upped its focus on original content and blogging. On the finance vertical, it has added vertical sites like DailyFinance and BloggingStocks, for which it has hired a number of traditional journalists in the last year or so. It also owns Relegence, the real-time alerting system, which was initially focused on the B2B/finance markets, though now the tech is only used for internal purposes. Yahoo (NSDQ: YHOO) Finance may also have a look, if it can deal with the other internal issues.

By the same token, an online-only brand may also attract other buyers like Reuters Media, which has been boosting its online presence by adding commentary and blogs. Unlikely that Reuters would consider buying the print mag, but certainly has the data assets to plug in if needed. Same with Bloomberg. For Dow Jones, my thought has been that one of its weekend Journals could be integrated with a weekly print mag, but then again, the question is: what does WSJ gain by doing it? It has the audience it needs, and BW isn’t accretive enough, either on the revenue or audience side.

It is not as if BW‘s online site has been stellar either. It has been solid, but nothing more, despite the redesign. The site has been flat in traffic over the last year, and two redesigns in two years don’t inspire much confidence. Compare that to competitors: Fortune has no pretenses and has given up online (with parent Time, Inc focusing on CNNMoney.com instead) and Forbes.com is still hustling, among the leaders at least in terms of traffic and revenues (though the trouble at Forbes the company is a whole different ballgame and topic).

As for reinventing BW, some good ideas that BW‘s own Stephen Baker has collected, here (in response to a tweet question by Jeff Jarvis). One suggestion: “change the name from BusinessWeek to BusinessSecond.” Which points to another branding issue with BW — whether it keeps the print side or not — and it may just have to do that, rebrand as BW and de-emphasize BusinessWeek.

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