Squires’ departure from Time Inc. has been anticipated since the summer, when Chairman and CEO Ann Moore assigned him the task of finding a digital media solution for the Time Warner (NYSE: TWX) publishing unit.

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So far, Conde Nast and Hearst are expected to be part of the initial team of publishers. The new company will be charged with setting up a seamless distribution channel for digital mags across the iPhone, the BlackBerry and other digital devices, creating a standard template for advertisers and readers. The group doesn’t plan to create a single digital e-reader product; instead the publishers want to set up an iTunes-like storefront for magazine content. In addition to electronic versions of mag content, the storefront would also allow for print subscriptions and sales.

In some ways, the proposed JV sounds a little like Maghound, which Time Inc. introduced a year-and-a-half ago as a web-based subscription service including outside mag publishers like Meredith (NYSE: MDP) and Conde Nast. Maghound was initially envisioned as a “Netflix for magazines” in much the same way this new company has been touted as a relative to Hulu. But some Maghound publishers have given Time Inc. low marks, saying the system was slow to work out the bugs and that it has yet to achieve any real scale. As Time Inc. embarks on this latest all-inclusive system, Maghound represents something of a cautionary tale.