IAC’s media businesses — The Daily Beast/Newsweek, digital entertainment studio Electus and video site College Humor — don’t often get a lot of attention during the company’s earnings calls, since they’re fairly small compared to the dating properties and the search business. But CEO Barry Diller said that will likely change within the next three- to five years, when he expects significant revenues and little to no losses on that side.
Looking specifically, at building Tina Brown’s Daily Beast and the merger with Newsweek, Diller said he was pleased with some recent progress. The losses should be arrested within a year or a year-and-a-half, Diller said, at which point, the business is expected have lost about $60 million in total.
“Look, we paid a dollar for Newsweek and the losses have not been high,” Diller told analysts during the company’s Q2 call. “Those of you who are subscribers of Newsweek, if you look at the issue that came out on Monday, the cover story featured the magazine’s first scoop [since we acquired it], an interview with accuser of Dominique Strauss-Kahn and the New York hotel scandal. That was really solid reporting. If you check out that issue, you see a totally different Newsweek than the one from six-, seven-, 18-, 19 months ago. I could go back further.”
He also credited Brown and Daily Beast Newsweek CEO Stephen Colvin with improving advertising revenues and growing subscriptions. The business is stabilizing, he said.
“I look at Newsweek as a startup and we’re building a serious asset in new publishing,” Diller said “What I mean by that a completely new model of publishing in terms of being both an offline magazine and an online one. We’re the only people taking an original online product, The Beast, which has grown phenomenally, and fused it with an existing print publication. We now have 10 million uniques, which is quite strong.”