Reinventing An Empire

In the annals of American wealth, the number 400 has special meaning. Caroline Astor, queen of the Gilded Age, created a list of “The 400” persons she deemed worthy of gracing her Fifth Avenue ballroom for the winter social season. When Mrs. Astor discreetly leaked her list—consisting chiefly of old New York names like Cooper, Fish, Goelet, Van Rensselaer and Whitney—to the New York Times, she engraved on the national consciousness a firm idea of an American aristocracy.

Ninety years later, in 1982, a more democratic list debuted in the pages of Forbes magazine. The “Forbes 400” borrowed its magic number from Mrs. Astor but eschewed the select bloodlines: This list was a no-nonsense ranking of the 400 wealthiest Americans. The Forbes 400 did, however, possess its own sort of romance. The accompanying thumbnail biographies celebrated the drive and ingenuity—and sharp elbows—of the millionaires and billionaires who built their fortunes from scratch, and praised the shrewdness and vision of those who reinvigorated old family money.

By this time, of course, the Forbes family fortune itself was maturing quite nicely. Bertie C. Forbes founded his magazine in 1917 on the creed “Business was originated to produce happiness,” and his third son and chief business heir, Malcolm S. Forbes, made such a success of the venture that he could live the creed with almost indecent gusto. Balloonist, motorcyclist and collector of Old Master paintings, Fabergé eggs, and prize real estate (a French chateau, a Moroccan palace, an island in Fiji, a ranch in Colorado), Malcolm Forbes was the epitome of the happy millionaire. He hosted lavish parties aboard the company’s 117-foot yacht, Highlander, and traveled the world in a private jet called Capitalist Tool. He also had big, bold ideas. It was Malcolm who dreamed up the Forbes 400, a difficult project requiring deep reportorial sleuthing. He was the P. T. Barnum for the glories of capitalism, and no rival business magazine—not Fortune or Businessweek—could boast a similar catalyst.

After Malcolm’s death, in 1990, his eldest son, Steve Forbes, the “flat tax” presidential candidate, carried on ably (along with brothers Tim, Kip and Bob), if less effervescently than his father. But Forbes, Inc., sailed into rough waters anyway. In 1999, Jim Michaels retired after nearly four decades as editor, decades that saw Forbes surpass both Fortune and Businessweek in every important category, including reputation. Michaels pioneered the tough, lean, brutally blunt business story, focusing on the drama of personality. (It was Forbes that made Warren Buffett known to the masses.) After Michaels’ departure, Forbes went intermittently soft-headed. One lapse was the 2010 Dinesh D’Souza cover story “How Obama Thinks,” a flimsy smear piece implying that the president—whatever you think of him—holds deeply un-American views. “A singularly disgusting work,” the Columbia Journalism Review observed.

But real trouble came from the outside. Print journalism’s ecosystem was shrinking under a vast digital attack, and then the 2008 recession hit, killing off publications by the score. Metropolitan Home, Gourmet, Vibe, Teen, Country Home, PC Magazine, Jane, Cosmo Girl, Travel & Leisure Golf and Portfolio (Condé Nast’s worthy entrant into the business world) were but a handful of the casualties.

Though the decade was a terrible one for Forbes—whose tidy empire included the magazines American Heritage, ForbesLife and Forbes Woman and the website—its flagship magazine never faced a real danger of extinction. This owed partly to a fortuitous 2006 deal in which the Forbeses sold a 45 percent stake in their company to Elevation Partners, a Silicon Valley–based private equity firm fronted by none other than U2’s Bono. The Forbes clan also sold off the jet, the real estate, the Fabergé eggs and assorted artworks, and dry-docked the yacht. But none of this could prevent waves of layoffs, flagging morale and the demise of Forbes Woman and American Heritage (the former revived online, the latter now published under different ownership).

So, toward the end of 2010, the Forbeses did something nobody thought they would ever do. They hired an outsider to run the company.

Beyond the Comfort Zone

“Come in, come in!” says Michael Perlis of Riverside, president and chief executive of Forbes Media. He’s tall and trim and boyishly exuberant, with a longish sweep of silvery hair. His ruddy-brown complexion tells of his life away from the office, where one might find him in his lobster boat on the Sound or up in Maine, or climbing Mount Rainier with some Outward Bound buddies.

He fetches a bottle of water for his guest and settles in at a coffee table—on which rests a four-pack of Guinness beer and a bottle of champagne, together with a little note that he would explain later. He’s dressed in a sweater and lace-up suede shoes, not a business suit. This provides a tiny clue to his personality. He does not like to be straitjacketed by convention. He likes a certain level of informality. He is utterly devoid of executive hubris. “He exudes warmth—he’s always smiling,” says Nina LaFrance, Forbes Media’s senior vice president for consumer marketing and business development. “The big takeaway is that he’s just a nice person. A really good guy.”

Perlis exerted a calming influence on a skittish Forbes workforce. Also, according to one source, his sunny presence counterbalances that of Lewis D’Vorkin, the talented but dour editorial boss with the curious title of “chief product officer.”

But Perlis was hired chiefly for his unique media skill set. Back in the Print Age, he was publisher of Runner’s World and the other Rodale Press magazines; publisher of Playboy and president of Playboy Enterprises; publisher of GQ; and president and chief executive of Ziff Davis, whose stable of niche magazines included Car & Driver, Popular Photography and PC Magazine. “At Ziff Davis,” he says, “we’d been very successful in taking a principally print organization and creating a digital complement to it.” In 2000, Perlis went further down the new media road. He left Ziff Davis and joined SoftBank Capital, whose track record of funding digital media start-ups would soon boast winners like The Huffington Post, BuzzFeed and Associated Content.

All of a sudden, Perlis stood on a hinge of media history. National magazines, if they wanted to survive, would have to embrace the quickness and abundance of the digital world. They’d have to have an element of Huffington Post in them. Forbes had been an early entrant into digital space—largely because of Tim Forbes’s enthusiasm—but the model was still very much in flux. So when the Forbes family approached him, Perlis knew he would get a chance to combine everything he had ever learned in a single job. “I’m a firm believer that you really start to live, to learn, if you go to the edge of your comfort zone,” he says. “Forbes was that on steroids.”

The question was, could he make it all work?


Optimism Wins

Mike Perlis grew up in Westport, the son of an esteemed classical music historian, Vivian, and a psychiatrist, Sanford. After graduating from Syracuse University in 1976 with a degree in communications, Perlis drifted up to Maine. “I’d watched all the commuters and thought, That’s ridiculous.” So, based in Camden, he skied, tended bar and opened a fine little outfit called New England Publications, which put out Canoe & Kayak among other titles. But smitten with magazines, he necessarily abandoned the call of the wild for the call of New York.

Perlis is a relentless optimist. When his guest mentions a recent Forbes story he liked—about the fall of the Stroh’s beer dynasty—Perlis nods a little grimly and says, “We do those stories and they’re good ones, but people really feed their dreams and aspirations and fantasies through the success stories in Forbes. That’s what Forbes has always been about.” He cites a 2013 cover story about David Karp, the 28-year-old founder of the blogging platform Tumblr; not long after the story ran, Karp sold Tumblr to Yahoo for a cool billion. That’s Perlis’s kind of story. “But the cautionary stories are important, too,” he adds. “They contextualize the success.”

Forbes itself was looking pretty cautionary during that dark decade, the aughts. Among the many things sold off was the very building Perlis is sitting in, a neoclassical gem at 60 Fifth Avenue, just above Washington Square. (The gold letters spelling out “Forbes Magazine” had just been removed from the façade.) The buyer, New York University, leased it back to Forbes Media for five years, but now the lease was about to expire, and a month hence Forbes would move across the Hudson River to a marble-and-glass high rise in Jersey City. Jersey City? It, too, is grounds for optimism. “This building,” Perlis says, looking around, “has a lot of good ghosts, but it’s not very efficient. We’re on eight floors. In the new building, we’ll be on two gigantic floors, very open, very modern. And we’ll have these majestic views out of every window looking back at the Manhattan skyline.”

To some observers, Forbes’s shedding of the glorious old symbols was brutally ironic. The narrative, as they saw it, had America’s great chronicler of success and chief cheerleader of capitalism… failing. By 2010, Elevation Partners, which had paid $264 million for its minority stake in Forbes, was said to be growing impatient. Media experts were valuing the whole company at $200 million; ad revenues were down precipitously, reflecting the industry-wide crisis, with no guarantee of recovery. And in 2011 a former managing editor of Forbes, Stewart Pinkerton, published a tell-all with a Poe-inspired title, The Fall of the House of Forbes. Pinkerton cast his story as that of a dead Scottish king (meaning Malcolm, whose father was Scottish) and four princes who dithered “when great trouble smote the land.” As it happened, though, news of Forbes’s fall was greatly exaggerated.

Perlis arrived in December 2010. “On getting here, I began to share my feeling that the brand was much, much bigger than the business. The Forbes brand is known everywhere on the globe, and people have a very positive view of it. Being on the cover of Forbes is the iconic demonstration of success. In the movies, when Iron Man becomes a success, Tony Stark naturally appears on the cover of Forbes. So my first rallying cry around the building was to ‘build the business to be as big as the brand.’” That’s one way of saying, “Things aren’t what they used to be. Let’s get cracking.”

No sooner did Perlis join Forbes than the magazine published a cover story about WikiLeaks founder Julian Assange and “the coming age of leaks.” This was just the sort of piece that Forbes excelled at—hard to get (Assange rarely grants interviews), timely and predictive of a new wrinkle in modern life. It blew away the lingering odor of the Obama story and served as a good tiding.

The chief challenge for Perlis, though, was to figure out how an “old media” company could transition to a “new media” one—and do so without losing the qualities that made Forbes great in the first place. “We’re a media start-up founded in 1917,” Perlis liked to say as a way of steeping the staff in Forbes’s new mindset. In practical terms, that meant keeping print—“the front door to our brand”—bristling with life, unlike say, TIME, whose print version withered before our eyes, or Newsweek, whose print version disappeared entirely for a time. After all, nobody in the movies waves around a laptop saying, “Look, we made the cover of Forbes.”

“The lead is with the magazine,” Perlis says. “That’s the icon, even in a world where print is having the business model problems that it’s having.” The new mindset also meant building into the best website of its kind. Lewis D’Vorkin, who also arrived in 2010, deserves the major share of the credit for doing precisely that, Perlis says. D’Vorkin’s “contributor-based platform” has 1,400 writers uploading some 500 articles a day to, with subjects ranging from investing to food to sports to health to technology, all available for free.

“Over this period [2010 to 2014] we’ve grown our traffic from 10 to 15 million unique visitors a month to over 31 million unique visitors a month,” Perlis says. “We’ve built this enormous juggernaut. It’s huge. We’ve employed all the expertise and innovation you’d expect to see at BuzzFeed or The Huffington Post. And we do it with the benefit, the enormous benefit, of having a 100-year-old brand.”

The contributor platform has not escaped criticism. With so much content flowing online, there’s no way to scrupulously edit and fact-check it all. As a result, the articles carry the imprimatur of the Forbes name without necessarily rising to the magazine’s quality. The media critic Michael Wolff called the platform and its epigones “the Forbes vanity model, letting ‘contributors’ write whatever they want under your brand.” Perlis counters that contributorship at (unlike at The Huffington Post) is “rarefied air”: The writers are “passionate specialists” whom editors select carefully. Indeed, some are such talented writers with such deep knowledge of their fields that they end up writing Forbes cover stories.

There’s no evidence that the platform—which mixes staff and contributor stories, and, controversially, a few stories by advertisers (these are labeled as such)—has degraded the Forbes brand. If anything, the reverse is true. In October 2014, LinkedIn ranked Forbes the most shared publisher on social media, ahead of the New York Times, Business Insider and The Huffington Post. This translated into more buzz (the so-called “watercooler effect”) and more advertising dollars.

“In 2013 there was more revenue coming from than from Forbes magazine,” Perlis reports. “That was a first. And that trend continued in 2014. More than 60 percent of our advertising comes from digital now.” That is a striking figure—proof of the Forbes model’s efficacy. While Forbes’s digital revenues grew, Perlis expanded other revenue streams—doubling the number of Forbes theme “summits” (on subjects such as health care, philanthropy and women in business), and licensing Forbes’s contributor platform software to other media businesses.


Finding the Mojo

Mark Howard, Forbes Media’s chief revenue officer, says Perlis’s clear, straight-shooting style made him an instant favorite within the company. “You just can’t help but be impressed,” he remarks. “A lot of media legacy companies—by that I mean companies that originated in print media—are struggling with how they’re going to make their way in a digitally led world. Under Mike’s leadership, we made the transformation.”

The digital success has redounded to the magazine. “It’s rewarding to see our print magazine numbers surging in lockstep with our online growth,” Forbes editor Randall Lane said recently. “Too many people see print versus digital as a binary choice. The right answer is both—when each is clicking, they make the other stronger.” The magazine’s U.S. readership reached 6.7 million in 2014, making it the most-read business magazine in the country, well ahead of a crowded field that includes, along with Fortune and Bloomberg Businessweek (Bloomberg bought and retitled the magazine in 2010), Fast Company, Money, Inc., Success, Entrepreneur and Worth. In 2013 Adweek named Forbes the “Hottest Business Publication.” Also during Perlis’s tenure, Forbes won a trio of Morton Frank Awards from the Overseas Press Club for best business reporting abroad in magazines, and a prestigious Gerald Loeb Award for best international business reporting.

Clearly, the magazine has its mojo back. Part of the appeal is the lists. Forbes has gone a bit list crazy. But who can resist reading “The World’s Billionaires” (Bill Gates is back on top), “America’s Richest Families” (the Waltons still reign), or even the nutty “Forbes Fictional 15” (Scrooge McDuck is judged wealthier than Bruce Wayne, Tywin Lannister and C. Montgomery Burns)? The features, meanwhile, seem as fresh and vital as in Forbes’s heyday. Recent issues carried articles on Patrick Soon-Shiong, the world’s richest doctor, and his effort to invent the future of health care; Harold Hamm, “the most disruptive oilman since Rockefeller”; Michael Steinhardt, “the greatest trader in Wall Street history”; and Meg Whitman, who is reinvigorating Hewlett-Packard, “Silicon Valley’s original startup.” Also popular are Steve Forbes’s reliably cranky “Fact & Comment” and the many financial advice columns.

But what differentiates Forbes from the competitors? “Fortune and Forbes compete in print pretty powerfully,” Perlis says. “But we’re the market share leader.” This is partly so, he believes, because of Forbes’s emphasis on personalities and entrepreneurship, where Fortune focuses on large corporations—as its own signature list, the Fortune 500, suggests. Businessweek, being a weekly (Fortune and Forbes publish biweekly), is more beholden to up-to-the-minute news coverage. “But none of the classic competitors have had any kind of a meaningful digital presence,” Perlis claims. “Fortune’s trying to establish that now, but just now. Bloomberg bought Businessweek for a buck, and they’re publishing it vigorously, but their web presence is pretty minimal. So we see a lot of competition in the broader marketplace of websites and branded content—but we’re killing it.”

Perhaps this is the reason why, last July, the Forbes family sold a majority stake in their company to a consortium of Asian investors called Integrated Whale Media Investments. Perlis, D’Vorkin, et al had done such a good job of pumping up Forbes’s value that conditions had become ripe to sell. The deal was rumored to be worth a robust $475 million. (Forbes, as a privately held company, does not disclose its numbers.) Perlis describes the family’s decision to sell as “estate planning,” and it does seem they were looking ahead to the day when family participation in the business would be nil. Of the fourth generation of media Forbeses, only Steve’s daughter Moira is vigorously involved. (Of the third generation, Steve Forbes remains chairman and keeps the title of editor-in-chief, and both he and Tim are on the board of the new company.)

The sale, so far, seems to be a win-win-win proposition. With a new infusion of capital and potential for even faster growth abroad, the House of Forbes, far from falling, could find itself in the pink of health for decades. Elevation recouped its investment and then some: When the details of the deal got worked out in the fall, Bono sent the Guinness and the champagne that now sits before Perlis on the coffee table. “Congratulations from your less visible but very appreciative Irish partner,” the singer’s note read.

And readers? They’re riding a wave that Integrated Whale smartly shows no sign of wanting to disturb. Still, some found the Forbes sale upsetting—a great all-American brand suddenly in foreign hands, even if the family did retain a sizeable chunk. Others say the sale is part of a natural progression—the gospel of capitalism gone truly global. (In the last four years, foreign editions have increased from 12 to 35.) That being the optimistic view, it’s the one that Perlis favors—a success story, to be sure, and one that he lives every day.



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