In an interview with Bloomberg TV, IAC Interactive Chairman Barry Diller admitted that he made a big mistake in buying Newsweek:
For a news magazine, which is a bit of an odd phrase today, it was not possible to print it any longer. We said we will offer digital products. We have a very solid newsroom. We will see. I do not have great expectations. I wish I had not bought Newsweek. It was a mistake.
Diller also said that he decided to go digital because printing a single weekly news magazine is a “fools errand.”
That’s especially true when that magazine is losing subscribers and advertisers at a fairly rapid clip.
Newsweek was originally sold by the Washington Post Co. to stereo magnate Sid Harman for $1 plus assumed liabilities, in August 2010. Diller then acquired a 50-percent interest in the magazine when he merged it with his online property, The Daily Beast, in November of that year.
After redesigning the magazine, it was relaunched under new editor Tina Brown in March 2011 and continued to publish until the end of 2012, when it was folded into the operations of The Daily Beast as an online-only magazine.
The beginning of the end, though, came in July 2012, when the Harman family said they would no longer invest in the joint venture, thereby leaving Diller to cover the estimated $20 million in annual losses. He did so for only a few months before deciding to shutter the magazine, after nearly 80 years in print.
Diller, who badly underestimated the sagging fortunes of newsweekly magazines when he purchased his stake in Newsweek, while overestimating the online synergies of Newsweek and The Daily Beast, has already moved past that debacle. He is now on to his next venture by challenging broadcasters with his new streaming television service, Aereo, which is rapidly picking up steam.