So after Kelly — a former editor at The Washington Post — ascended to the top spot at money-losing weekly news magazine U.S. News & World Report in April 2007, he had one thought:
Not on my watch.
In 2009 Kelly and his publisher, Bill Holiber, went to see their boss, billionaire businessman Mortimer Zuckerman, to discuss a disturbing trend.
The mood in the mogul’s book-lined, 18th-floor offices on the east side of Manhattan hardly reflected the sunny view of Manhattan and the nearby CitiCorp Center, one of the jewels in Zuckerman’s real estate crown. Zuckerman in 1984 bought the magazine, founded in Washington in 1933, and had many years of robust profits. The publication earned more than $20 million some years.
But by the time of the fateful Manhattan meeting, U.S. News, known for its right-of-center, meat-and-potatoes style, was losing money — drip, drip, drip. 2006. 2007. 2008.
Print circulation had dropped to 1 million from 2.5 million a decade earlier, and advertising pages were down by half. Bureaus had been closed. Layoffs followed layoffs.
Kelly recognized an abyss he had seen before.
“I never had faith that things were coming back,” he said. “I’ve witnessed advertising declines for the last 30 years. The Chicago Daily News was a great newspaper. The same with Regardie’s. Great readership. People love the magazine. We are winning awards. But that ad market dried up and boom . . . it was over. When the market turns, you’ve got to do something else.”
The “something else” was to wind down the print edition and invent a new business with a proven source of revenue: lists.
Starting in 1983 with its ranking of best colleges, U.S. News was mining a data trove that Zuckerman marketed as “news you can use.”
First came the lists of colleges. Then law schools. Business schools. Hospitals. By the time Kelly was sitting in Zuckerman’s office trying to map a salvage operation, U.S. News had made a name for itself with its rankings.
And those rankings did well on the Web. The magazine’s online audience at the time was 3 million and climbing — fast.
“I thought it had a real chance, but nobody had ever done this before,” said Zuckerman, a modern-day press baron who sold the Atlantic magazine to Washington businessman David Bradley in the 1990s and who still owns the New York Daily News.
Thanks to the rankings, “we were . . . better positioned to take advantage of a Web platform than most other magazines.”
Kelly and Holiber had been salivating over the rankings’ online opportunities for years, recognizing that the bite-size information is similar to the journalism U.S. News had in its DNA. The lists were easily digestible, orderly and full of facts. Readers ate it up.