• BusinessWeek, Friday, June 12, 2009 9:30 AM

Some industry observers believe that Time Inc., America's largest magazine group, will soon be spun off or sold by parent Time Warner. Ad revenues at the unit shrank 30% in this year's first quarter, compared to lat year, after falling 20% in the last three months of '08.

But the current environment for selling Time Inc. is terrible. "Before you sell, you'd want to know how much of the current bad news comes from a temporary ad downturn and how much from permanent structural change in the media world," writes Jon Fine. Also, good luck finding buyers. The debt markets still rule against private equity firms making big bets on media, especially print media, right now.

Nonetheless, a partial sale has some supporters. Time Inc. split its U.S. properties into three operating units last October: news, lifestyle, and style and entertainment. Each is operated separately enough to have its own profit-and-loss statement, so any unit could be hacked off neatly. The obvious sale candidate is the lifestyle unit, which includes Real Simple and This Old House. Unlike the other Time Inc. units, it's less likely to be seen as a content feeder to sister properties, and could be attractive, as a purchase or a joint venture, for Hearst Magazines or Meredith.

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