AOL unit buys Business 2.0

June 8, 2001
Web posted at: 0726 GMT

LONDON (CNN) -- Future Network, a UK magazine publisher, agreed on Friday to sell its new economy magazine Business 2.0 to AOL Time Warner's Fortune Group.

Fortune Group at Time Inc. will initially pay $68 million in cash for Future Network's U.S. magazine title Business 2.0, its global brand and related conference and online activities.

Fortune will combine the magazine with its publication eCompany Now, to create a re-designed magazine under the name Business 2.0 with a monthly circulation of 550,000. 

Business 2.0 was launched in July 1998 as a monthly magazine and became profitable in 2000. The magazine started twice-monthly publications in May 2000 and has a current circulation of 350,000 copies.

"However, profitability and growth of Business 2.0 has been adversely affected by the downturn in its advertising market experienced toward the end of 2000 and in 2001," the company said.

In the year ended December 31, 2000, Business 2.0 in the U.S. posted an operating profit of $15 million on sales of $66.8 million. Of the sales, $63 million came from the magazine and $3.5 million from related Web sites and conference activities.

According to the terms of the agreement, Future Network will receive 25 percent of any revenue over $50 million generated by Business 2.0. Future Network will also get 25 percent of revenue over $10 million from the Web site and conferences.

Future Network, one of the largest magazine publishers in the UK, produces gaming and computing titles such as PC Gamer, The Official PlayStation Magazine, and Nintendo World. Other titles include, MacAddict, Needlecraft and Total Football.

Elisabeth Murdoch, daughter of Rupert Murdoch, the chief executive of News Corp (NWS: Research, Estimates), is non-executive director of Future Network (FNET).

AOL Time Warner (AOL: Research, Estimates) is the parent of CNN.

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