Hat tip to Romenesko, via NY Times and WS Journal for the following story:
As speculation continues about a merger between The Daily Beast, the news and opinion Web site financed by Barry Diller, and Newsweek, The Wall Street Journal reports that the likelihood of a deal is increasing.
The Journal, citing people familiar with the discussions, said as part of the deal currently being discussed by the two companies, Tina Brown, The Daily Beast’s co-founder and co-owner, would become the editor of Newsweek, on top of her existing editorial duties at the Web site.
Speculation about a possible tie-up between the two companies resurfaced last week after Howard Kurtz, a three-decade veteran of The Washington Post, announced he was leaving to join The Daily Beast. Industry watchers suggested that Newsweek would provide a more logical home for Mr. Kurtz’s work given his long tenure as a print reporter.
However, the newspaper said that Sidney Harman, the audio equipment magnate who bought Newsweek in August, may be concerned about issues of control:
People familiar with Mr. Harman’s thinking said he may be wary of handing the reins to a strong-willed editor who also answers to another boss—Barry Diller, chairman and chief executive of Daily Beast owner IAC/InterActive Corp.
Newsweek, which Mr. Harman bought from The Washington Post Company for $1, lost almost $30 million last year amid circulation and advertising declines.
Meanwhile, The Daily Beast, which averages 4.6 million visitors a month, is expected to lose about $10 million this year, The Journal said, citing a person familiar with the matter.
However, The Daily Beast executives say the portal is on its way to becoming profitable in two years, according to the Journal.
Last week, in a piece marking The Daily Beast’s second anniversary, Ms. Brown responded to the buzz about a deal with Newsweek by saying: “Yes, there have been some interesting discussions going on, as we have with potential partners large and small all the time.”