The news that Newsweek had been sold to IBT Media was received by most of the media world over the weekend as the final, clinching evidence of the magazine's abasement. To be handed off to a publisher that even most people in the news business had never heard of was the most ignoble of ends for an iconic magazine that had been around for more than 80 years.
But while IBT may fly under the radar -- and the generic name and look of its flagship website, International BusinessTimes, surely has something to do with that -- it's not exactly a flyspeck. The seven-year-old company has about 200 employees worldwide. By way of comparison, that's more people than worked for the Huffington Post when
While its monthly audience is small for a publication with global ambitions -- 7 million visitors domestically and 13 million worldwide, according to Quantcast -- IBT has been profitable since 2010 and was able to make the purchase without taking on outside investors, something Uzac and Davis have assiduously avoided to this point.
"People asking us, 'How did you fund the acquisition of Newsweek? You must have outside backers, right?'" Uzac told me when we spoke this morning. "Well, as we told you in the previous interviews, we are indeed a bootstrapped company."
Doubt that IBT could be paying for all of its hiring and real estate with nothing more than the ads it serves to 13 million readers has been fueled by reports of the founders' close ties to Korean religious leader David Jang, Olivet University and the World Evangelical Alliance. The fact that neither Uzac nor Etienne had any background in news, media or publishing before starting the site also seemed odd. While they've acknowledged some business connections, Uzac and Davis have repeatedly denied, to me and to other reporters, that anyone but them has an ownership stake in IBT Media.
"We've had to focus on being an efficient company, very concentrated on the revenue side as well as on expenses," says Uzac, explaining what the conspiracy theorists are missing. "And right now, Johnathan and I are still the only two co-owners of the company. That's a choice. It has its advantages and its disadvantages."
Etienne and Uzac say there were several things that appealed to them about Newsweek. While a certain degree of stealth has served their purposes in the U.S., having a brand with widespread name recognition is more important in other markets they're trying to establish themselves in, particularly in east Asia, they say. Newsweek's mixture of subscription and advertising revenues is also something they're hoping to be able to replicate with other products; currently, IBT's only income stream is advertising.
Then, of course, there was the price. Last time Newsweek changed hands, it was for the sum of $1 plus the assumption of subscription liabilities. Those liabilities are less now, Newsweek having shed many of its readers, so there's no reason to think Davis and Uzac weren't able to get it for even less.
"We won't comment on the specific terms of the deal, but as a fast-growing, bootstrapped company, we were able to purchase it," says Uzac.
