• by Erik Sass  @eriksass1, November 12, 2008

Digital media, it seems, is just as vulnerable as print in the current economic downturn. After years of swearing by digital media, magazine publishers have cut their digital staffs over the last few weeks. The reason is the bottom line: Digital operations weren't making enough money.

On Monday, Conde Nast took the axe to CondeNet--its digital network of magazine Web sites and online-only properties, like Concierge.com and Style.com--as part of an overall 5% workforce reduction across Conde Nast. Although Conde Nast did not reveal how many employees were being laid off, the cuts were said to include positions in editorial, sales and I.T. In a statement, Conde Nast explained: "Visibility for 2009 is very limited, and therefore, we are adjusting all costs to prepare for slower revenue growth."

The print side has already taken some sizeable hits.

The staff cuts follow the company's announcement two weeks ago that it would be reducing the frequency of Portfolio, its new business title, to 10 times a year, and Men's Vogue to twice a year. At the time, the company also said it would be merging some of Portfolio's online functions with Wired's, resulting in job losses in the business title's digital operations.

In recent weeks, Meredith Corp. cut a number of jobs across the company--including that of Chief Innovation Officer Jack Bamberger, who directed its "Meredith 360" division, an integrated sales service for helping publishers execute cross-platform campaigns.

Mansueto Ventures, the publisher of Fast Company and Inc., took even more drastic action in early October, shutting down its digital division entirely and laying off 20 employees. Mansueto CEO John Koten said the publisher's Web sites have been turned over to the print magazines, explaining that digital revenues didn't grow fast enough to justify Mansueto's large investment in uncertain times.

Bamberger had held the role for just seven months, taking up the integrated responsibilities in April. There is clearly a sense, in magazine publishing, that April might as well be five years.

Online revenue figures are hard to come by for magazines, but if the occasional hints from publicly traded companies are accurate proxies, it seems likely that online still represents just a fraction of the overall business. In 2007, online advertising accounted for just 3.7% of Meredith Corp.'s total revenues, while in the second quarter of 2008, Martha Stewart Living Omnimedia's Internet revenues of $3.2 million represented about 4% of the total $77 million. At industry leader Time Inc., online provided 9% of total ad revenues in the first half of 2008.