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Forbes Inc.

Forbes Inc.

60 5th Avenue
New York, New York 10011
U.S.A.
Telephone: (212) 620-2200
Toll Free: (800) 242-8786
Fax: (212) 620-2245
Web site: http://www.forbesinc.com

Private Company
Incorporated:
1917
Employees: 750
Sales: $370 million (2004 est.)
NAIC: 511120 Periodical Publishers

Forbes Inc. has enjoyed a long history as one of the most successful and recognized publishers of financial news and information and ranks as one of the top 15 highest-grossing magazine publishers. Forbes magazine and international editions are read by more than five million people. In addition to the flagship magazine, the company produces Forbes.com, which claims to be the Web's leading business site. Other publications are ForbesLife (formerly Forbes FYI ) and American Heritage, as well as local language editions produced by affiliates in several foreign countries. Forbes Conference Group and Forbes Custom Media are newer parts of the business.

The architect behind much of Forbes's growth was Malcolm S. Forbes, who oversaw the company from the 1960s until his death in 1990. Since that time, Malcolm's son Steve and Caspar Weinberger have chaired the company. Privately owned, Forbes Inc. continues to be family-run, with Steve Forbes serving as CEO of Forbes Inc. and editor-in-chief of Forbes magazine. His brothers also are involved in Forbes Inc.: Timothy Forbes as COO, Christopher Forbes as vice-chairman, and Robert L. Forbes as vice-president, as well as head of ForbesLife.

ORIGINS

Bertie Charles or "B.C." Forbes was born in Buchan, Scotland, in 1880, the son of a tailor and later beer shop owner. Persuaded by a teacher that he had a knack for words, young B.C. landed a job as a type compositor with the Peterhead Sentinel, mistakenly assuming that compositors "composed" the news stories that would launch his journalistic career. Eventually, B.C. did get a chance to prove his reporting skills and won a cub reporter's job with the Dundee Courier and Weekly News, where he covered everything from murder trials to swimming contests. Forbes's taste for work was insatiable, and he quickly rose to senior reporter, only to leave Scotland for South Africa in 1902 to assume a senior reporter's position with the Johannesburg Standard and Diggers' News. Two years later, B.C. was back in Scotland with a nest egg, a growing interest in business stories, and the ability to engage the people who wrote and made the news. Because New York City was, in B.C.'s words, the "greatest newspaper town in the world," it seemed only logical that an ambitious business reporter would establish his career there, and in August 1904 Forbes left Scotland for good.

"DEVOTED TO DOERS AND DOINGS": 190429

By promising to "work for nothing," Forbes convinced New York's Journal of Commerce and Commercial Bulletin to hire him as a reporter on the dry goods industry, where he showed an unusual ability to report not just on business news but the personalities behind it. His reputation was growing, and when a London paper offered him a job he turned it down on the condition that the Journal of Commerce make him a financial editor. In addition to these new duties, he also was offered the chance to write a regular editorial column for the Journal, which soon led to an opportunity to write another column for a rival New York paper (a practice not unheard of in the period). Thus when newspaper mogul William Randolph Hearst sought to give his New York American paper a better financial page it was natural that the prolific Forbes seemed the most likely candidate. As a Hearst writer, Forbes enjoyed even greater readership, more venues in which to print his stories, and real power as the most prominent business journalist of his time.

Though increasingly well paid by Hearst (more than $185,000 a year in today's terms), in September 1917 Forbes decided to leave the position behind to pursue the only journalistic rung he had not yet seizedrunning his own publication. By relying on his continued income from a column for Hearst's paper as well as loans from the many businessmen he had met as a reporter, Forbes established Forbes magazine to profile the "doers and doings" of the growing American business scene. Published every two weeks for 15 cents an issue, the early Forbes was written in large part by B.C. himself and offered an unusual combination of assertive, biting prose; unabashed cheerleading for business success stories; and a moralistic streak that excoriated companies when they demonstrated corruption or exploitative labor practices.

In the boom years of the 1920s, Forbes had the business magazine front to itself, which it served well by popularizing the world of business through revealing glimpses at the personalities behind the numbers and products. To his credit, B.C. Forbes seemed to sense that the great bull market of the late 1920s was getting out of hand, and in the months before the crash of October 1929 he warned his readers that "this is the ideal time to get out of debt," that is, close out their highly leveraged stock portfolios and abandon speculative investing. Forbes thus escaped the terrifying free-fall in stock prices in the fall of 1929, but he mistakenly assumed the worst was over and prematurely bought stocks at their new bargain-basement prices. When stocks continued their descent in the months that followed Forbes magazine joined the rest of the country in hard times. Because B.C. himself continued to write for Hearst's paper, however, he could use his still sizable writing income to keep the magazine afloat.

THE GREAT CRASH AND NEW COMPETITION: 192945

The crash, however, was not the only source of trouble B.C. faced as the 1930s began. In 1929 and 1930, respectively, two new competitors, Business Week and Fortune, joined the business magazine market. Each took a different approach to business news. By publishing twice as often as Forbes, Business Week embraced a news-oriented approach, and the monthly Fortune built a reputation for long, in-depth analyses of corporations. Forbes 's highly subjective style and businessman-as-hero slant suddenly seemed less than cutting edge. By 1939, Forbes 's advertising had fallen from 1,216 pages in 1929 to 269, and its paid circulation of 102,000 ran a distant third to Fortune 's 248,000 and Business Week 's 192,000.

To keep Forbes afloat, B.C. tried to innovate and diversify. He published books with titles such as The Salesman's Diary for 1938 and Daily Pep Pellets, hired and fired a series of managing editors, and shifted the magazine's focus from financial and stock market stories to a more nuts-and-bolts industrial beat. Although by 1943 B.C. could still claim an income of $50,000 and holdings of half a million dollars, his longtime safety valve, his column for the New York American, disappeared when Hearst canceled it.

COMPANY PERSPECTIVES

Forbes is a privately held publishing and new media company. Its flagship publication is Forbes, oldest of the nation's major business magazines, which will celebrate its 90th Anniversary in 2007. In an industry increasingly dominated by public conglomerates, Forbes remains one of the largest and most successful family businesses of its kind. In recent years the company has expanded to include Forbes.com, Forbes Conference Group, Forbes Custom Media, and American Heritage.

POSTWAR "REBIRTH": 194564

Like the U.S. economy after World War II, things started to look better for Forbes magazine as the postwar boom began to take hold. After winning the Bronze Star and Purple Heart in World War II, B.C.'s second oldest son, Malcolm, began to shake things up at the magazine, insisting that it hire its own staff and stop relying on commissioned pieces and scrapping B.C.'s insider's stock tip service in favor of the much more lucrative Forbes Investors Advisory Institute, which by 1950 would be generating $51,000 a year in net profit. In 1946, Advertising Age reported that Forbes 's circulation had leaped by 26,000 in the space of four months, and by 1948 Malcolm had launched the magazine's annual January 1st ranking of U.S. corporations, which eventually became a profitable source of advertising revenue (and anticipated the Fortune 500 list by five years).

Malcolm also made mistakes, however. His attempt at a coffee-table celebration of American history, Nation's Heritage magazine, may have been, as it was billed, "the most beautiful magazine in history," but its expensive inks, deluxe coated paper, and hefty newsstand price taxed Forbes Inc.'s coffers and it quickly folded in 1949. While Malcolm's older brother Bruce ran Forbes magazine's business operations, in the 1950s Malcolm pursued another quixotic and doomed pursuit that distracted him from his duties at the magazine: running for election to Congress. When B.C. died in May 1954, Forbes's postwar bloom had begun to fade, and with the magazine's ownership divided between Malcolm, Bruce, and two other brothers (who shared one-third of the company's equity) it was unclear who would lead Forbes back to battle against Business Week and Fortune. When a new managing editor, Byron "Dave" Mack, began hiring researchers to verify writers' facts, however, Forbes began to become a more reliable source of information, and this seemed to free its writers to write more confidently. Forbes 's circulation once again began to climb. By the late 1950s, with Dave Mack shifted to editor and James W. Michaels hired as managing editor, Forbes was winning a larger and larger readership among business executives and investors. Between 1954 and 1958 alone, circulation grew by more than 100 percent to 265,000, and in 1957 Forbes Inc.'s revenues stood at an estimated $3.5 million annually.

MALCOLM TAKING OVER: 196490

In June 1964, Bruce Forbes, whose advertising and business savvy had helped strengthen Forbes's bottom line, died of cancer at 48. Malcolm stepped into the breach, buying out the 30 percent stake of Bruce's widow to become the majority owner of Forbes's stock. He then pressured his brothers Gordon and Wallace to sell their shares and eventually gained total control of Forbes Inc. His ultimate goal was to make Forbes the highest circulation business magazine on the market, and his aggressive, award-winning "Forbes: Capitalist Tool" ad campaign paid immediate dividends. Positioning Forbes as the bold and adventurous interpreter of the story behind the news, the message of the new ads was mirrored by Malcolm's own personal promotions: local publicity visits to major advertising markets in which potential Forbes advertisers were wined and dined on the family yacht, Highlander.

KEY DATES

1917:
Forbes is launched in New York by business reporter B.C. Forbes.
1945:
Malcolm Forbes, son of the company founder, begins to revitalize the namesake magazine.
1964:
Malcolm Forbes becomes majority owner following the death of his brother Bruce.
1982:
Forbes launches its annual ranking of the world's wealthiest individuals.
1984:
Forbes is the second most profitable magazine in the United States.
1986:
Forbes Inc. buys American Heritage.
1990:
Steve Forbes inherits control of the company following the death of his father, Malcolm.
1995:
Steve Forbes makes the first of two consecutive bids for the U.S. presidency.
1996:
Former Reagan defense secretary Caspar Weinberger is named chairman of Forbes Inc.
1998:
Forbes Global is launched.
1999:
Jim Michaels retires as Forbes executive editor after 37 years.
2002:
Forbes.com introduces a money-back guarantee for larger advertising customers.
2003:
Local languages editions are being established in China and other countries.
2005:
Forbes Asia replaces Forbes Global.

By the third quarter of 1966, Forbes 's circulation had passed Fortune, and by the end of 1967 it stood at 500,000, ahead of Fortune by 25,000 but still trailing Business Week by 30,000 readers. There were still false steps, however. An Arabic-language version of the magazine folded in 1979, and a weekly Forbes Restaurant Guide folded after two years. Moreover, Malcolm had begun buying expensive mansions, ranches, and even a Pacific island to offer getaways for businessmen seeking to live the Forbes life. These projects lost money, however, until Forbes decided to break up his Denver-area ranch into five-acre parcels to be sold to the public through Forbes magazine and its newsstand competitors. The stratagem worked, and the Sangre de Cristo ranch eventually returned $34 million for the company on a $3.5 million initial investment. Meanwhile, by the end of 1972 Forbes 's circulation had climbed to 625,000 (75,000 higher than Fortune ), and subscriptions alone were generating $4.5 million a year. Advertising was bringing in $20 million a year by 1976, and the income from the Forbes Stock Market Course and from renting its Manhattan office building further padded the bottom line.

Forbes's competition was only growing fiercer, however. In 1978 Fortune switched to a twice-monthly format, which would triple its revenues over the next six years, and a year later a new magazine, Inc., materialized to seize the small business market. By 1984, Forbes 's circulation of 770,000 trailed Business Week by 120,000 and led Fortune by only 22,000 readers. Worse, in gross advertising revenue Business Week and Fortune led with $156 million and $101 million, respectively, with Forbes trailing at $84 million. Still, Forbes had made enormous progress since 1964: It could boast that "one in five of our readers is a millionaire," and it remained the second most profitable magazine after Playboy because it produced no international or regional U.S. editions and maintained only a slim global network of journalists and a comparatively smaller U.S. editorial staff.

In 1982 Malcolm undertook the first of several international "Friendship Tours," in which an army of "Capitalist Tool" motorcyclists and hot-air balloonists descended on countries such as China, Pakistan, Japan, Germany, Turkey, and Spain spreading goodwill and the Forbes name. The same year, Forbes launched its notorious "Forbes Richest 400" list, which helped to raise the magazine's net worth to about $250 million (with another $150 million coming from real estate and other property). By 1983, Forbes ranked eighth among AdWeek 's "ten hottest" magazines (ranked by ad revenue). Since 1970, Forbes had expanded from an 18 percent share of the total ad revenues of Big Three business magazines to 33 percent, and it was Business Week that bore the brunt. In 1984, therefore, it hired a new editor to stave off the Forbes threat, but new magazines including Manhattan Inc., Financial World, and Crain's were making the business newsstand an increasingly crowded, cutthroat place. In 1986, the gloves came off in the business magazine ad wars when Forbes ran a confrontational ad under the words "Business Weak."

STEVE FORBES AND THE TECHNOLOGY CHALLENGE: 199099

By the late 1980s Malcolm's son Malcolm S. "Steve" Forbes, Jr., who had started at the magazine in 1971, had risen to president and deputy editor-in-chief. He had been giving Forbes 's editorial point of view a marked rightward tilt, which was underscored when Caspar Weinberger, Ronald Reagan's secretary of defense, was named the magazine's publisher in 1989. In February 1990, Malcolm died in his sleep at age 70, leaving 51 percent of Forbes Inc. to Steve and the rest to his three younger brothers. As his celebrated father was eulogized, Steve reassured the press that the Forbes style would not change. For the most part, it seemed to be doing things right. Circulation stood at 735,000, and only Business Week sold more ad pages. American Heritage magazine, which it had purchased in 1986, had been given a new look under Steve's brother Timothy, and its ad pages grew 20 percent in 1989 alone. A German edition, Forbes von Burda, had been co-launched with Germany's Burda Publications the month Malcolm died, and plans continued to launch a four-issue-per-year "lifestyle" magazine, Forbes FYI, in the fall of 1990. Only Egg, a self-styled "hip, urban" lifestyle magazine launched just before Malcolm's death failed to pan out and was shut down in early 1991.

Forbes Inc. worked hard to keep pace with the increasingly global and technology driven business climate of the 1990s. A Japanese edition was unveiled in March 1992; a Chinese edition was announced in 1993; and in 1998 Forbes Global Business and Finance, an English-language international edition, was launched under the leadership of former Canadian prime minister Brian Mulroney. Forbes Inc.'s American Heritage operations also expanded, entering the custom publishing market in 1993 and starting a quarterly African-American history magazine named American Legacy in 1996. In the same year, Caspar Weinberger was named chairman of Forbes Inc., and in both 1995 and 1999 Steve Forbes launched presidential campaigns that were reminiscent of his father's political crusades of the 1950s.

The challenge of the Internet was the real story, however. Forbes launched a new technology quarterly supplement, Forbes ASAP, in 1992, and in the mid-1990s Forbes moved rapidly to establish an online presence, christened "Forbes Digital Tool." As hip, new magazines, including Wired, Fast Company, Business 2.0, Industry Standard, and Red Herring, vied to become the business magazine for the Internet generation, Forbes opened a news office in Silicon Valley in 1997 and began to run more high technology cover stories (it was reporters from Forbes Digital Tool who exposed the Stephen Glass media scandal at the New Republic ). When in January 1999 Jim Michaels stepped down as executive editor after 37 years at the helm, it was no surprise that his replacement, William Baldwin, had built a reputation as a committed technophile.

MORE WIRED, MORE GLOBAL IN THE NEW MILLENNIUM

Because of its emphasis on high technology, some observers believed the company was more exposed than its rivals to the tech slowdown. Forbes revenues fell 26 percent in 2001 to $363 million, according to Advertising Age, as the recession cut into ad sales. Forbes ASAP was shuttered in October 2002; it was one of several notable tech publications to close during the tech bust.

Nevertheless, the Internet remained a central part of the media empire. Jim Spanfeller was named CEO of Forbes.com in January 2001. He set out to exploit the advantages of the online product, such as the ability to target ads toward specific audiences. In September 2002, Forbes.com introduced its Brand Increase Guarantee for its larger advertising customers. Those spending six figures a month on online ads could claim a refund if their ad metrics did not rise after 60 days. Forbes.com experimented with linking ads to keywords in its editorial content in the summer of 2004. It dropped the practice due to a lack of acceptance from staffers.

Forbes was getting into media other than print and the Internet. It launched a show with cable television's Fox News Channel in 2001. In 2005 it began developing a syndicated weekly radio program in collaboration with TRN Enterprises.

The group was expanding its frontiers in the real world as well as in cyberspace. Forbes magazine introduced its Forbes 2000 survey of the world's largest companies in 2003. The next year, it dropped its list of the 500 largest U.S. companies to reflect the increasing importance of international business. Its rival's Fortune 500 list of domestic companies was outmoded, an executive said in Campaign. The larger, international listing also demonstrated a broader worldview to Forbes Global readers in Europe.

Forbes Global was closed in July 2005 as the company restructured its international offerings through more local titles. Forbes China had debuted in March 2003 in collaboration with Morningside Business Publishing of Hong Kong. Local language editions also were brought out in Korea (2002) and Russia (2004). Forbes Asia was launched in September 2005 to provide expanded coverage of the booming Asia/Pacific region. Editions based in Dubai, Israel, and Poland began publishing in 2004, followed by the launch of Forbes Turkey in 2005.

The lifestyle publication Forbes FYI was restyled as ForbesLife in April 2006. It had increased its publication frequency from quarterly to bimonthly the previous year.

Whereas Forbes was famous for its rankings of the world's largest corporations and wealthiest individuals, the privately owned company was less forthcoming about its own finances. Sales estimates in other media sources varied widely. Advertising Age 's 2004 listing of 100 leading media companies pegged Forbes Inc.'s sales at $370 million a year. Publishers Information Bureau ranked Forbes magazine number 14 among leading magazines. Its advertising revenues were down slightly in 2005 to $323 million, placing it between rivals Business Week (13) and Fortune (15) on the list.

At the same time, Forbes.com was logging more than nine million unique visitors every month. Its president, Jim Spanfeller, said at a media conference that the site would pass the print product's revenues by the end of 2006, reported B to B.

The New York Times suggested that the Forbes publishing empire may have been worth more than $1 billion. It remained 51 percent owned by Steve Forbes, with the rest held by others in the family.

                                             Paul S. Bodine

                              Updated, Frederick C. Ingram

PRINCIPAL DIVISIONS

American Heritage; The Forbes Collections; Forbes Conference Group; Forbes Custom Media; Forbes Investors Advisory Institute; Forbes Magazine Group; Forbes Newsletter Group; Forbes Radio; Forbes Television.

PRINCIPAL COMPETITORS

Dow Jones & Company, Inc.; The Economist Group Limited; McGraw-Hill Cos.; Time Inc.

FURTHER READING

Aitken, Lucy, "International Business Magazines Bite the Dust," Campaign, January 13, 2006, p. 23.

Arnold, Matthew, "Incessancy Overcomes Intimidation in Winning Forbes' Respect," PR Week (U.S.), August 12, 2002, p. 14.

Callahan, Sean, "Jim Spanfeller, CEO, Forbes.com," B to B, July 19, 2004, p. 24.

Carr, David, "Now Steve Is Running to Revive Forbes," New York Times, August 26, 2002, p. C1.

Donaton, Scott, "Malcolm S. Forbes Jr.," Advertising Age, March 1990.

Fine, Jon, "Ad Pages Decline: Forbes Parent Feels Sting of Recession," Advertising Age, October 21, 2002, p. 1.

Forbes, Malcolm, "Cap Weinberger to Become Fourth Forbes Publisher," Forbes, October 3, 1998, p. 17.

Foroohar, Kambiz, "Tracking Lies," Forbes.com , May 11, 1998.

"Greater Expectations," Forbes, September 15, 1977, pp. 121+.

Griffin, Marie, and Ellis Booker, "As Digital Dollars Grow, B-to-B Publishers Debate Impact of Blogs," B to B, May 3, 2005.

Heller, Robert, "The Battle for U.S. Business," Management Today, August 1984, pp. 62+.

"In 2005, All Top 12 Magazine Ad Categories Exceeded $1 Billion," MIN Media Industry Newsletter, January 23, 2006.

Jones, Arthur, and Malcolm Forbes, Peripatetic Millionaire, New York: Harper & Row, 1977.

Kuczynski, Alex, "Changing of the Guard and Coverage, at Forbes Magazine," New York Times, October 12, 1998.

Lehmann-Haupt, Rachel, "Egg (19901991)," Folio: The Magazine for Magazine Management, March 1, 2004.

Levere, Jane L., "Advertising: Forbes Hustles to Build Its Web Brand," New York Times, June 9, 1999, p. C8.

Mack, Ann M., "Forbes.com. Nixes Ad Links in Editorial," AdWeek Online, December 2, 2004.

Maddox, Kate, "Forbes.com Offers Brand Guarantee; Advertisers Get Money Back If Campaigns Don't Produce Significant Increase in Brand Metrics," B to B, October 14, 2002, p. 14.

"A Magazine of His Own," Forbes, September 15, 1967, p. 13.

Motavalli, John, "Clash of the Titans," AdWeek, May 22, 1989, pp. 20+.

"The Rise of Consumerism," Hub Magazine, Spring 2006.

Rothenberg, Randall, "Forbes Clan Masters the Art of Keeping in Touch with Targets," Advertising Age, October 11, 2004, p. 26.

Sorkin, Andrew Ross, "Forbes May Seek Investment from Outside," New York Times, May 8, 2006, p. C2.

"Top Media Companies, 2004," Advertising Age, 100 Leading Media Companies (annual), August 22, 2005, p. s-4, Business Rankings Annual, online edition, Thomson Gale, 2006.

Tungate, Mark, "Forbes Broadens Its Scope with Top 2000 Survey," Campaign, April 2, 2004, p. 21.

Winans, Christopher, Malcolm Forbes: The Man Who Had Everything, New York: St. Martin's Press, 1990.

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Forbes Inc.

Forbes Inc.

60 Fifth Ave.
New York, New York 10011
U.S.A.
(212) 620-2200
Fax: (212) 206-5534
Web site: http://www.forbes.com

Private Company
Incorporated:
1917
Employees: 600
Sales: $315.8 million (1998)
NAIC: 51112 Periodical Publishers

Through its namesake magazine, Forbes Inc. has enjoyed a long history as one of the most successful and recognized publishers of financial news and information and ranks as one of the top 15 highest-grossing magazine publishers. The architect behind much of Forbess growth was Malcolm S. Forbes, who oversaw the company from the 1960s until his death in 1990. Since that time, both Malcolms son Steve and Casper Weinberger have chaired the company, which in addition to publishing the biweekly Forbes, also produces Forbes FYI, Forbes ASAP, and American Heritage. Privately owned, Forbes Inc. continues to be family-run, with Steve Forbes serving as president and editor-in-chief, Timothy Forbes as COO, Christopher Forbes as vice-chairman, and Robert L. Forbes as president of Forbes Global and Forbes FYI.

Bertie Charles or B.C. Forbes was born in Buchan, Scotland, in 1880, the son of a tailor and later beer shop owner. Persuaded by a teacher that he had a knack for words, young B.C. landed a job as a type compositor with the Peterhead Sentinel, mistakenly assuming that compositors composed the news stories that would launch his journalistic career. Eventually, B.C. did get a chance to prove his reporting skills and won a cub reporters job with the Dundee Courier and Weekly News, where he covered everything from murder trials to swimming contests. Forbess taste for work was insatiable, and he quickly rose to senior reporter, only to leave Scotland for South Africa in 1902 to assume a senior reporters position with the Johannesburg Standard and Diggers News. Two years later, B.C. was back in Scotland with a nest egg, a growing interest in business news, and the ability to engage the people who wrote and made the news. Because New York City was, in B.C.s words, the greatest newspaper town in the world, it seemed only logical that an ambitious business reporter establish his career there, and in August 1904 Forbes left Scotland for good.

Devoted to Doers and Doings: 190429

By promising to work for nothing, Forbes convinced New Yorks Journal of Commerce and Commercial Bulletin to hire him as a reporter on the dry goods industry, where he showed an unusual ability to report not just on business news but the personalities behind it. His reputation was growing, and when a London paper offered him a job he turned it down on the condition that the Journal of Commerce make him a financial editor. In addition to these new reporting duties, he was also offered the chance to write a regular editorial column for the Journal, which soon led to an opportunity to write another column for a rival New York paper (a practice not unheard of in the period). Thus, when newspaper mogul William Randolph Hearst sought to give his New York American paper a better financial page it was natural that the prolific Forbes seemed the most likely candidate. As a Hearst writer, Forbes enjoyed even greater readership, more venues in which to print his stories, and real power as the most prominent business journalist of his time.

Though increasingly well paid by Hearst (more than $185,000 a year in todays terms), in September 1917 Forbes decided to leave the position behind to pursue the only journalistic rung he had not yet seizedrunning his own publication. By relying on his continued income from a column for Hearsts paper as well as loans from the many businessmen he had met as a reporter, Forbes established Forbes magazine to profile the doers and doings of the growing American business scene. Published every two weeks for 15 cents an issue, the early Forbes was largely written by B.C. himself and offered an unusual combination of assertive, biting prose; unabashed cheerleading for business success stories; and a moralistic streak that excoriated companies when they demonstrated corruption or exploitative labor practices.

In the boom years of the 1920s, Forbes had the business magazine front to itself, which it served well by popularizing the world of business through revealing glimpses at the personalities behind the numbers and products. To his credit, B.C. Forbes seemed to sense that the great bull market of the late 1920s was getting out of hand, and in the months before the crash of October 1929 he warned his readers that this is the ideal time to get out of debt, that is, close out their highly leveraged stock portfolios and abandon speculative investing. Forbes thus escaped the terrifying free fall in stock prices in the fall of 1929, but he mistakenly assumed the worst was over and prematurely bought up stocks at their new bargain-basement prices. When stocks continued their descent in the months that followed Forbes magazine joined the rest of the country in hard times. Because B.C. himself continued to write for Hearsts paper, however, he could use his still sizable writing income to keep the magazine afloat.

The Great Crash and New Competition: 192945

However, the crash was not the only source of trouble B.C. faced as the 1930s began. In 1929 and 1930, respectively, two new competitors, Business Week and Fortune, joined the business magazine market. Both took a different approach to business news. By publishing twice as often as Forbes, Business Week embraced a news-oriented approach, and the monthly Fortune built a reputation for long, in-depth analyses of corporations. Forbes s highly subjective style and businessman-as-hero slant suddenly seemed less than cutting edge. By 1939, Forbes$ advertising had fallen from 1,216 pages in 1929 to 269, and its paid circulation of 102,000 ran a distant third to Fortunes 248,000 and Business Weeks 192,000.

To keep Forbes afloat, B.C. tried to innovate and diversify. He published books with such titles as The Salesmans Diary for 1938 and Daily Pep Pellets, hired and fired a series of managing editors, and shifted the magazines focus from financial and stock market stories to a more nuts-and-bolts industrial beat. Though by 1943 B.C. could still claim an income of $50,000 and holdings of half a million dollars, his longtime safety valve, his column for the New York American, disappeared when Hearst canceled it.

Postwar Rebirth?: 194564

Like the U.S. economy after World War II, things began to look better for Forbes magazine as the postwar boom began to take hold. After winning the Bronze Star and Purple Heart in World War II, B.C.s second oldest son, Malcolm, began to shake things up at the magazine, insisting that it hire its own staff and stop relying on commissioned pieces and scrapping B.C.s insiders stock tip service in favor of the much more lucrative Forbes Investors Advisory Institute, which by 1950 was generating $51,000 a year in net profit. In 1946, Advertising Age reported that Forbess circulation had leaped by 26,000 in the space of four months, and by 1948 Malcolm had launched the magazines annual January 1st ranking of U.S. corporations, which eventually became a profitable source of advertising revenue (and anticipated the Fortune 500 list by five years).

Malcolm also made mistakes, however. His attempt at a coffeetable celebration of American history, Nations Heritage magazine, may have been, as it was billed, the most beautiful magazine in history, but its expensive inks, deluxe coated paper, and hefty newsstand price taxed Forbes Inc.s coffers and it quickly folded in 1949. While Malcolms older brother Bruce ran Forbes magazines business operations, in the 1950s Malcolm pursued another quixotic and doomed pursuit that distracted him from his duties at the magazine: running for election to Congress. When B.C. died in May 1954, Forbess postwar bloom had begun to fade, and with the magazines ownership now divided between Malcolm, Bruce, and two other brothers (who shared a third of the companys equity) it was unclear who would lead Forbes back to battle against Business Week and Fortune. When a new managing editor, Byron Dave Mack, began hiring researchers to verify writers facts, however, Forbes began to become a more reliable source of information, and this seemed to free its writers to write more confidently. Forbess circulation once again began to climb. By the late 1950s, with Dave Mack shifted to editor and James W. Michaels hired as managing editor, Forbes was winning a larger and larger readership among business executives and investors. Between 1954 and 1958 alone, circulation grew by more than 100 percent to 265,000, and in 1957 Forbes Inc.s revenues stood at an estimated $3.5 million annually.

Malcolm Takes Over: 196490

In June 1964, Bruce Forbes, whose advertising and business savvy had helped strengthen Forbess bottom line, died of cancer at 48. Malcolm stepped into the breach, buying out the 30 percent stake of Bruces widow to become the majority owner of Forbess stock. He then pressured his brothers Gordon and Wallace to sell their shares and eventually gained total control of Forbes Inc. His ultimate goal was to make Forbes the highest circulation business magazine on the market, and his aggressive, award-winning Forbes: Capitalist Tool ad campaign paid immediate dividends. Positioning Forbes as the bold and adventurous interpreter of the story behind the news, the message of the new ads was mirrored by Malcolms own personal promotions: local publicity visits to major advertising markets in which potential Forbes advertisers were wined and dined on the family yacht Highlander.

By the third quarter of 1966, Forbess circulation had passed Fortune, and by the end of 1967 it stood at 500,000, ahead of Fortune by 25,000 but still trailing Business Week by 30,000 readers. There were still false steps, however. An Arabic-language version of the magazine folded in 1979, and a weekly Forbes Restaurant Guide folded after two years. Moreover, Malcolm had begun buying expensive mansions, ranches, and even a Pacific island to offer getaways for businessmen seeking to live the Forbes life. These projects lost money, however, until Forbes decided to break up his Denver-area ranch into five-acre parcels to be sold to the public through Forbes magazine and its newsstand competitors. The stratagem worked, and the Sangre de Cristo ranch eventually returned $34 million for the company on a $3.5 million initial investment. Meanwhile, by the end of 1972 Forbess circulation had climbed to 625,000 (75,000 higher than Fortune), and subscriptions alone were generating $4.5 million a year. Advertising was bringing in $20 million a year by 1976, and the income from the Forbes Stock Market Course and from renting its Manhattan office building further padded the bottom line.

Forbess s competition was only growing fiercer, however. In 1978 Fortune switched to a twice-monthly format, which tripled its revenues over the next six years, and a year later a new magazine, Inc., appeared to seize the small business market. By 1984, Forbess 770,000 circulation trailed Business Week by 120,000 and led Fortune by only 22,000 readers. Worse, in gross advertising revenue Business Week and Fortune led with $156 million and $101 million, respectively, with Forbes trailing at $84 million. Still, Forbes had made enormous progress since 1964: it could boast that one in five of our readers is a millionaire, and it remained the second most profitable magazine after Playboy because it produced no international or regional U.S. editions and maintained only a slim global network of journalists and a comparatively smaller U.S. editorial staff.

In 1982 Malcolm undertook the first of several international Friendship Tours, in which an army of Capitalist Tool motorcyclists and hot-air balloonists descended on such countries as China, Pakistan, Japan, Germany, Turkey, and Spain spreading goodwill and the Forbes name. The same year, Forbes launched its notorious Forbes Richest 400 list, which helped to raise the magazines net worth to about $250 million (with another $150 million coming from real estate and other property). By 1983, Forbes ranked eighth among AdWeeks ten hottest magazines (ranked by ad revenue). Since 1970, Forbes had expanded from an 18 percent share of the total ad revenues of Big Three business magazines to 33 percent, and it was Business Week that bore the brunt. In 1984, it therefore hired a new editor to stave off the Forbes threat, but new magazines including Manhattan Inc., Financial World, and Crams were making the business newsstand an increasingly crowded, cutthroat place. In 1986, the gloves came off in the business magazine ad wars when Forbes ran a confrontational ad under the words Business Weak.

Steve Forbes and the Technology Challenge: 199099

By the late 1980s Malcolms son Malcolm S. Steve Forbes, Jr., who had started at the magazine in 1971, had risen to president and deputy editor-in-chief. He had been giving Forbes s editorial point of view a marked rightward tilt, which was underscored when Casper Weinberger, Ronald Reagans secretary of defense, was named the magazines publisher in 1989. In February 1990, Malcolm died in his sleep at age 70, leaving 51 percent of Forbes Inc. to Steve and the rest to his three younger brothers. As his celebrated father was eulogized, Steve reassured the press that the Forbes style would not change. For the most part, it seemed to be doing things right. Circulation stood at 735,000, and only Business Week sold more ad pages. American Heritage magazine, which it had purchased in 1986, had been given a new look under Steves brother Timothy, and its ad pages grew 20 percent alone in 1989. A German edition, Forbes von Burda, had been co-launched with Germanys Burda Publications the month Malcolm died, and plans continued to launch a four-issue-per-year lifestyle magazine, Forbes FYI, in the fall of 1990. Only Egg, a self-styled hip, urban lifestyle magazine launched just before Malcolms death failed to pan out and was shut down in early 1991.

Forbes Inc. worked hard to keep pace with the increasingly global and technology driven business climate of the 1990s. A Japanese edition was unveiled in March 1992; a Chinese edition was announced in 1993; and in 1998 Forbes Global Business and Finance, an English-language international edition, was launched under the leadership of former Canadian prime minister Brian Mulroney. Forbes Inc.s American Heritage operations also expanded, entering the custom publishing market in 1993 and starting a quarterly African American history magazine named American Legacy in 1996. In the same year, Casper Weinberger was named chairman of Forbes Inc., and in both 1995 and 1999 Steve Forbes launched presidential campaigns that were reminiscent of his fathers political crusades of the 1950s.

The challenge of the Internet was the real story, however. Forbes launched a new technology quarterly supplement, Forbes ASAP, in 1992, and in the mid-1990s Forbes moved rapidly to establish an online presence, christened Forbes Digital Tool. As hip, new magazines, including Wired, Fast Company, Business 2.0, Industry Standard, and Red Herring, vied to become the business magazine for the Internet generation, Forbes opened a news office in Silicon Valley in 1997 and began to run more high technology cover stories. When in January 1999 Jim Michaels stepped down as executive editor after 37 years at the helm, it was no surprise that his replacement, William Baldwin, had built a reputation as a committed technophile.

Principal Divisions

American Heritage; Forbes ASAP; Forbes FYI; Forbes Global.

Further Reading

Forbes, Malcolm, Cap Weinberger to Become Fourth Forbes Publisher, Forbes, October 3, 1998, p. 17.

Donaton, Scott, Malcolm S. Forbes Jr., Advertising Age, March 1990.

Greater Expectations, Forbes, September 15, 1977, pp. 121+.

Heller, Robert, The Battle for U.S. Business, Management Today, August 1984, pp. 62 +.

Jones, Arthur, and Malcolm Forbes, Peripatetic Millionaire, New York: Harper & Row, 1977.

Kuczynski, Alex, Changing of the Guard, and Coverage, at Forbes Magazine, New York Times, October 12, 1998.

Levere, Jane L., Advertising: Forbes Hustles to Build Its Web Brand, New York Times, June 9, 1999, p. C8.

A Magazine of His Own, Forbes, September 15, 1967, p. 13.

Motavalli, John, Clash of the Titans, AdWeek, May 22, 1989, pp. 20 +.

Winans, Christopher, Malcolm Forbes: The Man Who Had Everything, New York: St. Martins Press, 1990.

Paul S. Bodine

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