Time New Media, a subsidiary of Time Warner, declined to release terms of the transaction other than to say it negotiated the deal with the site's content provider, Dr. Andrew Weil. Wired officials were not available for comment.
HotWired's divesture of Dr. Weil will mean the online site will lose a "big generator of traffic," said Steven Petrow, the newly named executive producer of Ask Dr. Weil, who is taking on the role of assistant managing editor at Time. He noted that Dr. Weil generated 2 million page turns last month.
Wired, in its securities filing for its failed initial public offering, stated it generated 137,000 to 206,000 visitors to its Web sites per weekday in September 1996. Based on those figures, Wired's Web sites during that month generated roughly 4 million visitors.
"Once they lose traffic, they will lose a certain amount of page views, and that will affect their advertising [revenue]," said Steve Mitra, senior analyst at Jupiter Communications. "It would seem that they are losing a big asset." The advertising for HotWired is very site-specific, Mitra explained, so when Dr. Weil leaves, the advertising will follow.
In the long run, he added, HotWired is focusing on certain areas that will allow it to produce a better product. "They will do news better, and it is a good strategy...HotWired is concentrating on core competencies and they are divesting themselves of all things that aren't core."
Meanwhile, analysts question Pathfinder's ability to harness the power of the Web to be a leader of online content the way its parent company, Time Warner, has been with its print publications. Analysts estimate that Pathfinder continues to be a money sink. But the woes of the online world for companies rooted in traditional publishing is not unique to Time.
"For a major media company, the Web is a huge wild card, and everyone is very concerned in traditional media what the Web is going to do to the core business," said Bill Bass, an analyst with Forrester Research. He added that no company likes to see money wasted, but with a $20 billion company behind it, Pathfinder isn't in any immediate danger of being shut down.
Dan Okrent, editor of Time New Media, said that the online business has been unfairly criticized for not being profitable right off the bat.
"How can you start on day one and be profitable in two years?" Okrent asked. "You have to invest for several years before it becomes profitable...The Web as a business is still developing."
The online division plans to capitalize on traffic through cross-promotion and advertising. Okrent added that eventually they will promote the Web sites in the print magazine. For now, "we don't want to spend a lot of money until that market is there...How many of our readers are on the Web?" he asked. Syndication is also being pursued as another option for generating revenue.
Last month, Time announced a reorganization of its new media operations and named Linda McCutcheon Conneally, an eight-year company marketing executive, as president. The reorganization came after long criticism of the media giant's execution of its online strategy.
Mitra suspects that this move is part Time's effort to spruce up its dusty empire. "Time is adding a hipness to give it a certain amount of appeal. They are definitely going beyond the mainstream that has defined Time for years."
Bass added that it is impossible to "cover everything best-of-breed in-house. It is nice to see them going outside to fill in the gaps. What you are seeing is a new course for Time, and Dr. Weil is an example of that."
Dr. Weil, also the best-selling author of Spontaneous Healing and 8 Weeks to Optimum Health, said in a statement that he is "thrilled to take this step" because it will allow him to "reach an even larger audience than before." Dr. Andrew Weil and Time have been in discussions since January.
But while Pathfinder was the ultimate choice for Weil, he had been in talks with other "major-player" media companies, according to Petrow. He added that over 50 percent of Weil's audience is female, and that is very attractive to advertisers. The site will relaunch on Pathfinder on June 2.