Forbes: Facelift Or Foundational Change?

I was (briefly) a contributor at True/Slant, prior to my mother’s illness and death in the first half of the year. I never really posted much, and by the time I was back at work, True/Slant was in process of being acquired by Forbes.

The reality at Forbes is stark. Advertising falling like a rock, growing competition from AOL and Yahoo, and the rising expenses of a paper magazine.

So can Lewis D’Vorkin turn around the collapsing Forbes beofre it hits bottom? Does a Huffington Post-like community of ardent bloggers represent the future?

Matthew Flamm, Inside the radical reinvention of Forbes

Mr. D’Vorkin, a former AOL executive who has also been an editor at Forbes and The Wall Street Journal, will field an army of bloggers from existing staff and new contributors. They will publish and promote themselves using tools developed at web journalism startup True/Slant, which he founded and ran until Forbes bought it in May. He certainly has experience creating winning web businesses. At AOL, he helped to launch TMZ, the wildly popular gossip site.

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According to insiders, the bloggers will include all Forbes staffers and some former True/Slant contributors and others, who will be paid based on what kind of traffic and web interaction they attract. There will also be a multitude of writers who won’t be paid—a model similar to that of the Huffington Post, whose thousands of bloggers write for free.

At core, this is a community move: but is there a community of bloggers who want to contribute to Forbes for free? When there are so many places to contribute, what is the purpose or meaning of being affiliated with Forbes, which has been associated with the gargantuan lifestyles of the obscenely wealthy? That could be a stumbling block, to say the least.

Marketers to add content

In addition, marketers will be able to join the conversation. As Mr. D’Vorkin explained in a post last week that introduced the test launch of the blog platform, the aim will be to open up the website and magazine to “creators, consumers and marketers alike.”

The advertising content will be integrated, “yet with clearly identified distinctions,” according to the presentation.

Some observers believe the new emphasis on blogs represents an improvement over the old focus on building web traffic through lists and slide shows, like “America’s Drunkest Cities,” that had little to do with business.

“The problem I’ve always had with Forbes is that the website doesn’t come across as something that reflects the ideals and objectives of the publication,” says Chris Roush, director of the Carolina Business News Initiative at the University of North Carolina. “I think there’s been a disconnect between the web operation and the print operation, and hopefully what Lewis is doing will resolve that.”

No choice but to change

The blogs may end up attracting a more engaged upscale audience, but the “re-architecture” of the company, as the presentation calls it, came about because Forbes Media didn’t have a choice. Between 2007 and 2009, ad pages at Forbes plunged 40%.

The bottom also fell out of Forbes.com, which had long been the rare example of an online extension that overshadowed the magazine. Over the past 18 months, its traffic has fallen 40%, to 8.6 million unique visitors in June from a high of 14.3 million in December 2008, according to research firm Compete.

Insiders blame the steady erosion on a change in strategy at large web portals like Yahoo and AOL, which used to feature those cheesy Forbes.com lifestyle stories on their home pages. As the portals focused more on their own content, they fed less traffic to Forbes.com.

Others blame the decision at the end of 2008 to combine Forbes’ print and online operations, which left two different cultures fighting it out.

In addition, ad rates fell as online ad networks drove down pricing. Private equity firm Elevation Partners, which paid $300 million for a 40% stake in Forbes Media in 2006, shuffled its board members last year to focus on cost cutting. Forbes went through several rounds of layoffs, culminating in 100 staffers losing their jobs last October.

Insiders say that following the departure of Forbes.com Chief Executive Jim Spanfeller a year ago, the company has lurched in different directions with no clear strategy. That changed with the arrival of Mr. D’Vorkin in May.

Critics of the proposed changes wonder whether Forbes’ target audience of C-suite executives will want to wade through hundreds of blogs. Fans of Mr. D’Vorkin, however, say he has a sense of how media is changing.

The redesigned magazine will debut with The Forbes 400 issue in late September. The website rollout will continue until the end of the year.

Not only does Forbes face a large potential mismatch between C-level execs and bloggers, they may be heading for the problems that SEED Media stumbled into with the PepsiCo Nutrition blog.

For now, I guess it’s a matter of wait and see, but my sense would be that Forbes will fall a lot more before finding a new normal: a level at which advertising supports core operations, bloggers are getting the regard they seek, and the greater Forbes community visits regularly. The biggest question mark is who will form the core of that community?