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Microsoft in Talks to Sell Highly Rated Online Magazine, Slate

By Howard Kurtz
Washington Post Staff Writer
Saturday, July 24, 2004; Page E01

Eight years after Microsoft Corp. launched an online magazine in a groundbreaking attempt at cyber-hipness, Slate may be sold.

More than half a dozen media companies have expressed interest in buying the Internet publication, and the leading contenders are the New York Times and The Washington Post, a source familiar with the discussions said yesterday. The source declined to be named because of the delicate nature of the talks.

The Redmond, Wash., software giant would like to keep distributing Slate online in partnership with a new owner, said Scott Moore, general manager of the MSN Network Experience, which includes Slate and MSNBC.com.

"There's a large amount of pride over what we've accomplished with Slate," Moore said, adding that Microsoft Chairman Bill Gates is "a huge fan and supporter of Slate" and is following the negotiations. But, he said, "Slate, in the grand scheme of Microsoft, is not a big investment."

"We're flattered by this interest from other media companies, and I and everyone else on the staff are excited about the possibility," said editor Jacob Weisberg. "Microsoft has been a wonderful owner for us. The question is really whether to get to the next stage in our development we need to be in a conventional media environment."

Slate drew 4.6 million unique visitors last month, making it the top-rated magazine online, according to Nielsen Net Ratings. Slate gets a boost from being part of the Microsoft Network, and Moore said the company would like to keep it there, even under a new owner, as a draw. Another Web ratings service, ComScore Media Metrix, says Slate had 2.8 million visitors, behind sites run by Forbes and Sports Illustrated.

But Slate has never been profitable for a full year, despite having been modestly in the black for part of last year. Microsoft has not seen fit to beef up the 30-person staff, which is divided between Redmond, New York and Washington. And Slate has always been an "odd duck" within a company more concerned about Windows software than scoops, said the source familiar with the situation.

Slate "could benefit from being owned by a company primarily focused on media," which would provide "a synergy we just don't have," Moore said.

A deal could be reached in a few weeks or months, he said, and Microsoft would keep publishing the magazine if no sale can be worked out.

The Washington Post Co. could be a logical buyer because MSNBC already hosts the company's Newsweek magazine online and has a news alliance with The Post, which includes sharing stories and video with the Microsoft site and on occasion collaborating with NBC programs. But MSNBC also has relationships with such media outlets as Fox Sports and National Public Radio, and The Post Co. traditionally has been cautious about acquisitions.

Caroline Little, chief executive and publisher of Washingtonpost.Newsweek Interactive, did not respond to a telephone message. Martin Nisenholtz, chief executive of New York Times Digital, also did not return a call seeking comment. Spokesmen for the two companies said they would have no comment.

The situation was sufficiently sensitive yesterday that Weisberg asked his staffers not to talk to reporters.

The liberal magazine made a huge splash in 1996 when former New Republic editor and CNN host Michael Kinsley moved to Seattle to launch it. At the time, no one knew whether a daily online magazine could attract a steady audience, and the concept of an Internet-only publication seemed sufficiently strange that Slate for years produced a weekly paper version.

Slate was launched about eight months after Salon, a San Francisco liberal magazine that has struggled financially and now charges for some of its content.

Kinsley -- who declared his independence upfront with a discussion called "Is Microsoft Evil?" -- said he wanted to prove that an online magazine could be self-supporting. But after adopting and then abandoning a subscription fee, Slate remains subsidized by its corporate parent.

The magazine quickly abandoned its long, print-style features for quicker-to-read content such as digests of what's in other newspapers and magazines, first-person diaries and breakfast-table debates, and regular columns called "Press Box," "Chatterbox," "Moneybox" and "Kausfiles." Weisberg, who became editor two years ago, also compiled a list of "Bushisms," or dumb-sounding remarks by the president, into a book, and the magazine now publishes convoluted comments called "Kerryisms."

Slate's contributors include Christopher Hitchens, Michael Lewis, Robert Wright, Ann Hulbert and fallen Wall Street analyst Henry Blodget.

Asked if he felt at all spurned by Microsoft, Weisberg said: "This is very much about how successful we've been to date."


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