In its second-largest acquisition, Amazon buys the company for $970 million.
The Internet is a marvelous tool in the hands of established merchants. It is not a threat to their existence.
Just one year ago, something quite remarkable was happening in business publishing. Several new business magazines were challenging the long-established competitive balance in one of the most lucrative segments of the publishing market. Two of these magazines-Business 2.0 and Industry Standard-seemed to have loftier goals than merely taking command of the new-and overcrowded-Internet publishing market.
Boasting fast-growing circulation numbers between 200,000 and 300,000, Business 2.0 and Industry Standard seemed poised to challenge the most established and profitable of all business magazines-McGraw-Hill’s Business Week. With advertising-packed issues that sometimes exceeded 400 pages, these phenoms had reached profitability in just their third year of publication, a remarkable achievement for major new industry magazines. By comparison, McGraw-Hill waited 10 years before Business Week-founded one month before the Crash of 1929-made a profit, a testimony to a time, now long gone, when blue-blooded publishers prided themselves on filling a role in society that transcended the sole pursuit of profit.
By their very titles Business 2.0 and Industry Standard proclaimed themselves the magazines of “the new economy.” Their publishers were ardent disciples of a new creed in American business, which proclaimed that the Internet had so changed the rules of business that the old rules no longer applied. A new order was replacing the established order. A new standard of competition had been created, and those who clung to the old standards would be erased, like a lesson on a chalkboard.
What a difference just one year can make. Last month, Industry Standard, no longer fat with consecutive pages of advertising from the same Internet vendor, suddenly ceased publication. That action followed by a few months the merger of the struggling Business 2.0 into Time Inc.’s eCompany. Like so many of the Internet businesses they covered, these publishers of the new economy belatedly came to the realization that the business rules they tried to erase were written in stone, not chalk.
But there is a bigger lesson here than the banality that now echoes in the boardrooms of American industry. True, Business 2.0 and Industry Standard were defying gravity because the advertising clients which sustained them were themselves being carried aloft by an inflated stock market and not by the forces of the real market.
A more important lesson is what the demise of these magazines says about the Internet itself. It is simply that the Internet is not a separate industry, nor a self-sustaining economy, nor even a business in its own right. It is but a tool, albeit a powerful tool, for the businesses that comprise the only economy we have. It cannot be discussed, or written about or funded in a vacuum. Its only relevance to business is in the way it serves, enhances and transforms the traditional industries which deploy it.
We take this lesson to heart, which is why Internet Retailer always has been focused on traditional retailers and catalogers. The Internet is a marvelous tool in the hands of established merchants. It is not a threat to their existence. And Internet Retailer is not a magazine for the new retailing industry. Our goal is to inform traditional merchants on how this incredible tool can enhance and transform every facet of their businesses. That goal is not as lofty as that of many of the erstwhile publishers of the new economy. But it is rooted in pragmatism, and it is lofty enough for us.