• by Erik Sass  @eriksass1, September 5, 2007

Business 2.0, a magazine launched in 1998 to cover the "new economy" has become a casualty of some old economics: declining ad pages and stagnant circulation figures. The magazine, currently published by Time Inc., will cease publication after its October issue, Editor Josh Quittner announced in a blog post on the New York Times Web site late Tuesday.

The closing of Business 2.0 is fraught with irony: A print publication founded by digital media gurus to cover the notoriously volatile Internet economy, it bore witness to the many business failures of the first dot-com boom and bust before finally going bust itself.

Rumors began circulating last year that Time Inc. might close Business 2.0, but demonstrations of support from loyal readers, including the creation of a Facebook group, earned the publication a reprieve, Quittner wrote. However reader support couldn't make up for the steep decline in ad pages, which tumbled 34% in the first half of 2007 compared to the first of 2006, ending at 242, according to the Publisher's Information Bureau.

According to figures from the Audit Bureau of Circulations, in the first half of 2007 the magazine's total circulation fell 7.1% compared to the first half of 2006, to about 608,000. Business 2.0 was founded in 1998 by James Daly and Chris Anderson, editor of Wired magazine and author of "The Long Tail." Time Inc. bought the magazine from publisher Imagine Media in 2001.

Quittner added that Time Inc. execs decided against selling the title to other business publishers, including Mansueto Ventures, publisher of Fast Company. He speculated that Time Inc. didn't want to create more competition for its current stable of beleaguered business titles, including Fortune, Money, and Fortune Small Business.

Indeed, Business 2.0 isn't the only member of Time Inc.'s Finance and Business network to see hard times. Fortune's ad pages are down 17.5% in the first half of 2007, Fortune Small Business is down 18.2%, and Money is down 25.2%. Meanwhile ABC figures have Fortune's newsstand sales down 11.4%, while Money is down 3.4% in total circulation.

Faced with this crisis, in July Time Inc. opted for new management at the division, promoting Vivek Shah, formerly head of digital publishing for the Finance and Business Network, to president of the division. The decision to close Business 2.0 was likely taken by Shah, who has been charged with turning the division around -- and, most likely, axing publications that can't be saved.

Shah's online credentials are impressive. He led CNNMoney.com to a triumphant 2006, when Nielsen//NetRatings declared it the top business Web site in terms of unique visitors, page views and time spent. (It also received the award for best business and financial Web site from OMMA, published by MediaPost.) But it remains to be seen whether Shah's magic will translate from online to print.