How Many Magazines About the Net Is Too Many?

Tech insiders are already inundated with industry-related mail flooding their desks and e-mail inboxes. But that's not stopping yet another technology-related magazine from hitting the market.

L.A.-based Line56.com media group boasts that its brand-new magazine and Web site are the only publications focused exclusively on business-to-business e-commerce. But B-to-B trends and transactions already adorn the pages of dozens of technology and business publications, leading some observers to raise a cautious eyebrow.

Some believe that founders of new tech magazines have fallen victim to the same hype that caused the launch of hundreds of now-irrelevant dot-coins last year.

"Somehow or another, they all think -- wrongly, by the way -- that there's enough room for all this stuff," said Jon Goodman, executive director of the EC2 Annenberg Incubator Project. "There just plain isn't."

Mike Jefferies, chairman and chief executive of Line56.com, is under no illusions about the competition: "The Darwinian theory prevails," he said.

He believes his venture will survive because no one else is addressing the growing number of new online B-to-B companies, as well as all the brick-and-mortar companies moving their B-to-B operations online.

"(Other magazines) give us a yardstick to measure ourselves by, but they're very broadly focused," Jefferies said. "The Internet is now becoming such a common denominator, having an Internet-related magazine isn't enough. People want some focus, some visible mandate of what you want to deliver to them."

A three-pronged strategy

Jefferies founded Line56.com in January after selling his former venture, a Web site, print magazine and conference business for the office-products industry. The new company would use the same three-pronged model (online, offline and conferences) but focus on B-to-B e-commerce.

"There is such complexity in this area, such a huge thirst for guidance, commentary and information," Jefferies said.

With $3 million in funding secured from Palo Alto's Enter Ventures earlier this year, Line 56 hired 60 people at its L.A. headquarters and offices in San Francisco, Palo Alto, New York and London. The company plans to hire 40 more people by year end.

As for its name, it's taken from Shakespeare's "Hamlet." In Act Three, Scene One, Line 56, the Danish prince utters the immortal line, "To be or not to be?" (B-to-B, get it?)

Jefferies and his colleagues last week began meeting with potential investors for a second round of funding of at least $8 million. Much of that money would be used to grow the Line56.com Web site. Line56 executives are also meeting with entertainment companies and major Internet properties to discuss possible partnerships.

In addition to venture capital investments, Jefferies hopes to raise $7.5 million through Line56-sponsored networking conferences planned for New York and London in December.

Line56 recently shipped 100,000 copies of its magazine's premier issue and the second issue is on its way. Some of the articles include: how B-2-B exchanges are battling for survival, a profile on niche-industry e-business developer VerticalNet, and an Australian telecom provider's entrance into the U.S. market.

"The magazine is just one part of our business," Jefferies said. "We're using the magazine for building traffic for our Web site, building a brand and bringing in cash."

Yet there are plenty of bigger competitors with established tech magazines. Red Herring, founded in 1993, and the Industry Standard, founded in 1998, have established themselves as bibles for the tech community, filling out coverage by traditional business publications like The Wall Street Journal, Business Week and Forbes.

There's also Fast Company and Business 2.0, and Time Warner Inc.'s recently launched eCompany Now.

"We are being inundated, and the truth of the matter is, there's a broad skepticism that people can give us any more insight than we already have," said Rohit Shukla, president and chief executive of the Los Angeles Regional Technology Alliance. "There's nothing that a publication that establishes a niche can tell us that we don't already know."

Everybody in the act

Tech news has become an even more-crowded marketplace due to the proliferation of Web sites and e-mail services, such as those from Venture Wire and SoCalTech. Red Herring and. high-tech magazine Wired, among others, also offer free e-mail newsletters on a variety of topics.

"(E-mail publications are) far better and faster and more complete than any attempt at a new print publication in this kind of business," said Victor Hwang, chief operating officer for LARTA. "In this new-media digital entertainment realm, it just doesn't make sense to be creating new print magazines."

Line56 isn't the only company with a multi-pronged strategy. Red Herring and The Zone, launched less than a year ago to cover the tech industry in Southern California, also conduct or co-sponsor conferences and networking events, such as the Herring on Hollywood forum held here last week.

Not everyone is skeptical about new entrants in the market, though.

"I read voraciously," said Kelly Lefkowitz, who handles strategy and planning for the Venice Interactive Community. "Each (publication) has a different type of value; they're each pitched at different areas. I think there are enough segments in this market, they're just trying to cover it all."

The boom in tech publications is just a reflection of the industry, he said.

"There's been a proliferation, but you're looking at an industry that has proliferated too," Lefkowitz said.

Meanwhile, the many skeptics don't faze Jefferies one bit.

"We're looking forward to rising to the challenge," he said. "Initial progress suggests we're well on course."