Geeks Crash a House of Fashion By DAVID CARR

May 19, 2008
The Media Equation
Geeks Crash a House of Fashion By DAVID CARR

Of all the dot-com publishing franchises, Wired seemed the most likely to end up as road kill on a superhighway it helped create.

The seminal artifact of the Web 1.0, it was bought by Condé Nast Publications in 1998 and then lost two-thirds of its ad sales during the bust from 2000 to 2002. Its newsstand sales dropped by over a third in the same period, and its Web site was no help because, well, it didn’t even own its site.

Chris Anderson, then of The Economist, was dropped into the crater in 2001 as editor in chief. A few months into his tenure, he and I sat in a booth in the Condé Nast cafeteria as he earnestly explained that Wired was not a confection of the digital age, but a magazine about the culture to come.

“This isn’t the domain of techies anymore. It has gone mainstream in a way that doesn’t diminish its power, but illustrates it,” he said.

Yeah, right, I remember thinking.

He was right. Magazines like The Industry Standard, Red Herring, Business 2.0, eCompany Now all went down the digital drain, but Wired rowed carefully and slowly away from its geek origins and survived. (Fast Company, another magazine I suggested was toast, is managing a similar feat on a smaller level.)

Wired had a very respectable 1,300 ad pages last year, and its ads are up slightly so far this year, an achievement in an era of secular and cyclical decline that is threatening all manner of old media. Newsstand sales are edging back to the boom years, and it didn’t hurt that along the way, Mr. Anderson penned a conceptual book, “The Long Tail,” that became the keystone for PowerPoints all over the land.

Perhaps most important, in 2006, the company reunited Wired.com and Wired magazine by buying the site from Lycos for $25 million, a fraction of its $83 million price back when Condé Nast bought the magazine in 1998. The traffic has tripled since the acquisition and the Wired brand, which once was perched on a very thin reed, is now a sturdy plank.

You might think that Condé Nast’s headquarters at 4 Times Square — where the September issue of Vogue is viewed as one of humankind’s crowning achievements — would be the last place to look for Web innovation. With its fat, luscious magazines and elevators full of thin, luscious people, it would seem to be the antithesis of the sneaker-wearing run-and-gun aesthetic of the Web.

After all, rather than run the risk of dulling the luster of the printed Vogue or Gourmet, the company produced Style.com and Epicurious.com, which took some content from the magazines, but kept the Web at arm’s length.

But there have been signs that the company is serious about constructing a digital business that is less beside the point. Soon after getting his hands on Wired.com, Steven Newhouse, chairman of Advance.net, the digital division of the parent company, moved to buy Reddit.com, a social news site along the lines of Digg, although smaller.

Last week, all the attention was focused on the $1.8 billion grab by CBS for eyeballs with the purchase of CNet. But during the same week, Condé Nast bought Ars Technica, a small but very influential Web tech site; Webmonkey, a site for Web developers that will be restarted today; and Hot Wired, a storied brand from early Internet days — which ran the first banner ad ever. The price was not disclosed, but the company probably spent another $25 million on the acquisition, according to executives there familiar with the deal.

Between the $50 million already invested, and another $50 million that may end up being spent on discreet, small acquisitions, Condé Nast has essentially re-geeked Wired. Much of the allure of the acquired sites is harvesting the bright young things who thought them up. But apart from all that the brain-collecting, executives at Condé Nast said that with the new properties at Wired Digital, the company will now have a male-skewing audience of about 19 million unique visitors, which will put them in the neighborhood of Forbes.com and the various Dow Jones Web sites.

Of course, every big media company is buying digital properties — in a landgrab either for audience or bragging rights. Condé Nast’s tack is different. It has a long history of financing impresarios and remaining patient, going back to Alexander Liberman, a Russian immigrant who arrived at the company in 1941 as a designer and became its protean editorial director. Tina Brown crossed an ocean to bring Vanity Fair back from the brink and then picked up The New Yorker and gave it a good tug. Anna Wintour, left to her own devices, turned Vogue into a behemoth, large enough to spin off Teen Vogue and Men’s Vogue, as well.

True to form, the captains of the Condé Nast Death Star have not meddled with kids from Reddit — it was founded by a couple of students at the University of Virginia — any more than they have told Ms. Wintour what cover models to put on Vogue.

“We did not buy these sites to dictate what they should be doing,” said Mr. Newhouse, sitting in a borrowed office in the huge headquarters built by his father, Donald Newhouse, and his uncle, S. I. Newhouse. “There is a debate among big media companies about whether you achieve scale in digital businesses through big acquisitions, and all the cost and overhead that goes with it, or whether you do what we are doing, which is to lay the groundwork for a strategy that allows for real growth over time.” (He didn’t mention CNet, but he didn’t have to.)

David Carey, the group president with oversight over Portfolio, Wired, the company’s golf magazines and the ad sales at Wired Digital, would like to see a digital division that helps the company, which has always leaned on fashion-oriented print publications, make money off of a business audience as well.

“We have a great editor in Chris at Wired and a great team at Wired.com that has created a nicely profitable franchise in print and digital,” he said last Thursday. “We think we can scale that on the digital side through acquisition and growth into something meaningful.”

Ken Fisher, one of the co-founders of Ars Technica, may be just a pen-protector expression of the Condé Nast way. After we discussed our common interest in fourth-century Coptic texts — O.K., he talked, I listened — he said that he had been approached by a number of parties interested in buying the site. After talking to people at Wired.com and Reddit, he and his partners decided that the Condé Nast way left them the best chance of developing what had been a hobby on steroids into a business.

“We didn’t have to take them on faith,” he said. “They have a track record of understanding what they acquire, which was alarmingly not the case with the other parties we talked to.”

E-mail: carr@nytimes.com.