On the Dotcom Beat

By Chris Taylor

Want to launch a successful magazine via the Internet? Easy. Choose your topic, pick a dotcom domain name, get Web hosting and start scribbling. Cost: less than $400 a year. Want to launch a successful magazine printed on dead trees about the Internet? Not so easy. Consider not only the minimum $15 million you'll sink into paper, printing, distribution and advertising before you see a single issue; consider the intense competition for your target market's eyeballs: Wired, Red Herring, Business 2.0, Internet Week, Yahoo Internet Life (plus TIME's sister publications, TIME Digital and FORTUNE's eCompany Now, set to appear in April and May, respectively). And all you've got is that tiny little space on the newsstand.

The plains are littered with the bodies of pioneering publications like Internet Business, the Web, the Net and Virtual City. So it's all the more remarkable that a 22-month-old weekly called the Industry Standard is already living up to its moniker. Based in San Francisco and owned by Boston computer trade publisher IDG, the Standard set out in April 1998 to grab Internet business readers by appropriating the authority of a newsweekly--right down to the red banner and text-heavy layout. Says former design director Daniel Carter: "We wanted to come out and sound like we knew what we were talking about."

It worked. What emerged over the next two years was a hypersmart and sassy voice that does for Silicon Valley and Alley what CNBC did for Wall Street. Knowing what you're talking about counts for a lot in a world of shrieking dotcom hype, and the Standard cut through the noise with speed, exuberance, minimal jargon and a dash of self-deprecating humor. Advertisers ate it up, and the Standard got very fat very quickly. Issue No. 1 had an anemic 25 pages of ads; now they frequently top 200. Ad revenues rose from less than $2 million in '98 to more than $26 million in '99. "Our plan was to be profitable by 2001," says founder John Battelle. "We're ahead of schedule."

They got there largely by giving the store away. Nearly 60% of the Standard's 150,000 circulation goes to subscribers who don't pay a cent. Still, the subscribers do dish out the kind of personal financial details that make marketers salivate--especially when the readers' average net worth is $1.4 million. Whether they can be persuaded to part with a bit of that cash for a subscription remains to be seen.

Like many of the start-ups it covers, the Standard is living at warp speed. Its offices are crowded with foosball tables and video-game machines. It recently got $30 million in venture capital to expand its empire (new magazines, new websites, new conferences) in return for a 15% stake in the company. It's contemplating an IPO. And on Friday night the line for its weekly rooftop party--already a San Francisco institution--stretches round the corner.

Such sudden success gives editor in chief Jonathan Weber the kind of headaches other magazine bosses would kill for, such as how to fill all the editorial pages you've suddenly been handed by the ad department (Weber usually refuses to do more than 70 pages a week) or how to squeeze your staff--200 and counting--into your cramped office space. "I literally spent an hour yesterday looking at seating plans," says Weber, a former technology reporter for the Los Angeles Times. "It's pretty much a madhouse in here."

The Standard is not alone in benefiting from our e-crazy times. The $16 billion business-publishing market is set to reach $25 billion by 2003. The more established monthly Red Herring will break even for the first time this year. Its editor, Tony Perkins, doubts his younger rival can stay afloat if the money dries up. "We shouldn't assume dotcom advertising is going to be around forever," he says. "It'll be hard to sustain a weekly deadwood publication."

That's why the Standard is hedging its bets, existing as much online as it does on paper. Its website, thestandard.com gets 450,000 unique visitors a month. Media Grok, the most popular of the magazine's 17 e-mail newsletters, critiques technology coverage in major news outlets. Grok's regular roastings of clueless tech reporters has attracted 150,000 readers.

The Standard is probably a sounder candidate for an IPO than some of the dotcoms it covers, even though editorial Web ventures have a tendency to slump on Wall Street in the long run. Battelle, a Wired veteran who saw that magazine's stock-offer bid crash and burn, is cautious. "I don't want to go public till I'm sure I have a company that will be here in 10 years," he says. That's a lifetime in Internet time. Still, a magazine that took only 22 months to become an institution has a good head start.