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Market Scene : 2 Firms Struggle in Old East Germany : Their owners hussle and scrimp to stay afloat. Their success or failure may say much about the future of business in the former Soviet Bloc.


LEIPZIG, Germany — By midweek, the young editor and his fledgling 10-member staff would be working through the night to get the newspaper out. But now it was only Monday and he had time--a little--to talk.

"We've had to learn a lot in a very short time and, by some miracle, we've done it," said Jan Peter, 21, the editor in chief of a precocious new weekly called Leipzig's Other Newspaper.

"We've learned very fast; I'm not sure we've learned well," Peter added. But by all indications, the weekly is holding its own against intense competition for new circulation from powerful national and regional news chains in the reunified country.

The 24-page, two-color tabloid sells 20,000 to 30,000 copies each week, and newsstands in the city are asking for more. Whether it can keep up the pace is another question.

A few miles away, 25-year-old Stefan Pohl has launched a slightly less ambitious, yet equally demanding, graphics design business from the clutter of his tiny fourth-floor, walk-up apartment.

He talks quickly, animatedly, between the steady flow of customers and tradesmen who seem to have little problem with the 84 steps to his front door.

He can't get a phone, can't find an office, has had little help from local banks getting financial advice, but he remains hopeful.

"If I can get a telephone and a real office, I've got a 50-50 chance," he said with a smile. "I'm optimistic."

Whether the two young entrepreneurs and their ventures survive will determine much about the future of Germany's eastern region--until one year ago, a tightly controlled Communist state as bereft of new ideas as it was of free enterprise.

For if they and others like them--the young, the bright and the eager--do not make it, the prospects for others born into this former police state to participate in a new, more freewheeling Germany would appear depressingly poor.

Certainly, both men show an admirable hustle.

Through sheer enthusiasm, endless hours and Spartan conditions that allow only three rooms in its main office to be heated despite the near-freezing temperatures outside, Peter's weekly has managed to maintain its editorial independence and to keep its financial head just above water.

The paper, known simply as DAZ--the acronym of its German language name, Die (Leipziger) Andere Zeitung--is a rare survivor among the many small alternative publications launched by former East Germans amid the idealism and euphoria of their revolution last fall.

The tiny founding group, all in their 20s, began writing, printing and selling news leaflets at the weekly demonstrations in Leipzig for the equivalent of 20 cents each.

Peter, who was previously a hospital worker, said he and the paper's 25-year-old business manager, Peter Fraebel, who was a metalworker, were both refused college entrance by East German authorities and had no journalism experience.

With about $6,000 from the sale of the news leaflets, double that from advance advertising sales, plus the loan of a building, a telephone, two tables, a few chairs and some heating coal in the basement, the first issue of DAZ appeared last Feb. 1.

Its mix of local investigative reporting, emphasis on the city's terrible environmental problems, women's issues, provocative comment and general features caught on, enabling it to hold its own despite fierce competition from the array of 20 to 25 larger, well-established regional papers in the east and the mass circulation nationals from the west.

Apparently, those more established publishing houses believe DAZ's formula is worthwhile. According to Peter, the publication has so far rejected overtures by three German publishers to buy into the venture--mainly because all wanted more than 50% and operating control.

The main challenge now, he said, is to save the paper's editorial independence, yet find an injection of cash needed to ensure its future.

Media exposure has already brought several letters from the United States, from individuals enclosing $10, $20 or $30. There was even a telephone call from the White House press office offering to provide a list of foundations that might be willing to fund the paper.

"We could survive as we are for two to three years, but no one could work for that long under these conditions," Peter said.

With long hours and wages for full-time staff just a fraction of those offered by competitors at a time when prices and services in the eastern section are skyrocketing, DAZ has already lost two reporters to other papers.

A search for a minority partner has so far brought several feelers and more serious confidential negotiations with a British publishing company about a possible stake.

"Our goal is not just to stay alive, but be alive with our own identity," Peter said.

For Pohl's more modest business, called Crealog Graphic, problems are more basic. As basic, for example, as a telephone.

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