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E-Mags: Along for the Wild Dot-Com Ride

As Internet companies flourish, so do the publications that chronicle the industry.

September 28, 2000|J. MICHAEL KENNEDY | TIMES STAFF WRITER

SAN FRANCISCO — Time was, the beer-drinking sessions on the roof of the Industry Standard's headquarters were a way for magazine staffers to unwind after a tough work week.

Not so anymore. The TGIF gatherings atop the red brick building have evolved into a coveted invitation-only event at the ad-rich journal, which chronicles the ebb and flow of the new economy. It's a place to be seen and schmooze with other players on the high-tech fast track.

The Standard, though, is only one of a raft of magazines battling for dominance in this staggeringly lucrative new market, whose target readers are those looking for an edge in the warp-speed world of electronic commerce and technology.

E-mags, with names like Red Herring, Business 2.0 and Fast Company, are so fat with advertising they could double as doorstops. Last June, for instance, the biweekly Red Herring weighed in at a hulking 628 pages, half of them ads, and recently ran an ad of its own in the New York Times dubbing itself "the fastest-growing magazine in America."

Meanwhile, the Industry Standard, the only weekly in the growing pack, published more ad lineage than any other magazine in the country during the first six months of the year. And newcomer eCompany Now, which Fortune magazine launched in June, is already boasting a circulation of 250,000 and a staff of more than 100. The list of titles goes on, with more in the works, in what has become one of the most competitive media wars in the United States.

If figures touted by the magazines are accurate, their readers are very rich, indeed. Red Herring, for instance, puts its average subscriber's net worth at $1.8 million. The Industry Standard says the net worth of its average reader is $1.4 million.

Ground zero for this phenomenon is San Francisco, where the new economy permeates just about every facet of life. The city is now the most expensive place in the country to lease office space, and residential prices have skyrocketed as well, with most, if not all of it, tied to the revved-up dot-com community.

In the process, it has fueled a publishing boom on the West Coast as more and more magazines establish themselves in San Francisco rather than the traditional hub of New York. Even New York-based financial magazines are creating new publications in San Francisco because it is the center of the new economy.

At the heart of all this is money, vast amounts of money, fueling projects of every stripe. The e-mag is the place where fledgling start-up companies, flush with infusions of venture capital, place ads as part of a strategy to gain instant recognition by generating "buzz" about themselves.

The result is a cart-before-the-horse phenomenon in which the high-tech wired world is resorting to plain old paper as a way of saying, "Look at me!" The upshot is that e-mags are getting richer faster than any other class of publication in U.S. history. The number of ad pages in these magazines nearly tripled during the first six months of the year alone.

In the process, the number of jobs for editors and writers has increased at an unparalleled pace as the e-mags have opened bureaus across the United States, Europe and Asia.

"The great irony about all this Web-based, on-your-monitor info is that it creates more paper-based publications, not fewer," said Guy Kawasaki, author and chairman of Garage.com, a company specializing in putting venture capitalists together with start-ups.

Or, as Dana Lyon, former publisher of pioneer e-mag Wired put it: "You really have to go to mass media to be seen. There are so many things online that you can't just hope someone will click on your banner. You'll get lost trying to live that way."

It's an E-Mag Eat E-Mag Kind of Business World

Predictably, with all the new magazines, each one has tried to define its own role in e-commerce, sometimes a hair-splitting exercise. And there is no shyness about putting down the competition.

Industry Standard editor Jonathan Weber, for instance, derides eCompany Now as "the Industry Standard for Beginners." Fortune Managing Editor John Huey, instrumental in the founding of eCompany Now, categorizes the pioneering Upside as "sort of a shell of its former self." Red Herring chairman Chris Alden says of Business 2.0: "You'll never find a negative story in 2.0." And Forbes ASAP, an e-mag published by Forbes, recently took a shot at Wired, calling it "the Saturday Evening Post of the digital age."

The breakneck pace of the new economy has cooled somewhat since many dot-com companies went under last spring when technology stocks plummeted. Before that, the volume of start-ups able to attract investors was dizzying. Spending those investments quickly to create buzz became a part of the e-commerce culture.

Tom Bedecarre, the chairman of a San Francisco marketing firm specializing in the dot-com world, said it wasn't uncommon to have start-ups with millions to spend--and in a hurry--before someone else claimed the market niche.

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