Last week, Meredith Corp. announced it was selling Fortune media brand to Thai billionaire Chatchaval Jiaravanon for $150 million, making him the magazine’s second owner in the past one year following the November 2017 acquisition of its parent company Time Inc. by Meredith in a $1.8-billion deal. For Jiaravanon, the magazine seems to represent a personal interest, something he would like to turn around as a challenge. Which is why the investment was in his own capacity rather than through his family business, Charoen Pokphand Group (C.P. Group), the Bangkok-based conglomerate with interests in telecommunications, food, retail, automotive, finance and pharmaceuticals.
Among those who didn’t buy the magazine after evincing some initial interest was reportedly a Wall Street CEO.
It is a telling comment on the product: as a business, it has no future.
The past though was another story. Founded by Henry Robinson Luce, whose media empire also went on to include Time, Life and Sports Illustrated, among others, it was a direct reaction to the stock market crash of 1929 with the first issue out in February 1930. According to the magazine’s history documented on its site, in a 1929 prospectus for advertisers, Luce wrote that Fortune should be “the ideal super-class magazine" for “wealthy and influential people". It should be, he added, “surpassingly beautiful" and “so richly illustrated and so distinguished in appearance that it will be instinctive to turn the pages".
Its mission statement laid out in the first issue of the magazine was poetic in its aspirations: “FORTUNE’s purpose is to reflect industrial life in ink and paper and word and picture as the finest skyscraper reflects it in stone and steel and architecture."
The magazine was an instant success, too, with 30,000 subscribers when it started and over 10 times the number within the first five years. From the outset, it stood out for its paper quality, design and the use of great pictures from photographers such as Margaret Bourke-White and Ansel Adams.
Some of its annual listings, such as the Fortune 500, Fortune Global 500, Most Powerful Women, Best Companies to Work For and World’s Most Admired Companies, went on to become a badge of honour, sought after for their prestige as much as the validation they conferred.
At its peak, it captured a go-go era of business with businessmen (and only occasionally women) depicted as superheroes wowing employees, shareholders and customers with their masterly strategies.
Starting off as a monthly magazine, it went fortnightly in 1978; but in October 2009, following years of declining advertising and circulation numbers, it began publishing every three weeks.
As the print media went into terminal slump in the western world, the magazine that was set up to write about the rise and fall of businesses could do little to arrest its own decline once the rot set in.
At a time when companies such as Apple Inc. and Microsoft Corp., which the magazine first profiled when they were mere startups, have hit close to a trillion dollars in valuation, brand Fortune’s sale for $150 million is both ironic and tragic.
The inescapable conclusion is that some legacy businesses may have no future and no amount of tweaking in their operating models can change that. Their customer expectations are so dramatically different from anything they have created that all the retooling and re-engineering in the world can only get them so far. They just have to be burnt to the ground and started all over again.
As media products go, Fortune did little wrong, anticipating readers’ needs rather than reacting to them. Over the past few years, it has turned to revenues from digital products, as well as events, to counter the decline in print earnings. Yet, the immutable laws of business caught up with the publication that often chronicled these very rules.
An extract from an October 2000 introduction to its World’s Most Admired Companies ranking reads: “Even companies that successfully juggle the competing demands of customers, employees and shareholders can suddenly find themselves on the brink of obsolescence, their products and services supplanted by the Next Big Thing." That seems like a fitting epitaph.
Sundeep Khanna is a consulting editor at Mint and oversees the newsroom’s corporate coverage.The Corporate Outsider will look at current issues and trends in the corporate sector every week.