April 26, 1999 9:50 AM PDT

Time Warner to shutter Pathfinder

Time Warner is planning to shut down Pathfinder, the media company's giant, long-beleaguered pre-portal site, CNET News.com has confirmed.

"Over the next six months we will phase out the Pathfinder name, and we will continue with our promotional strategy to promote individual brands like Time, Entertainment Weekly, and Fortune," said Jeffrey Coomes, vice president of marketing at Time Incorporated New Media. "We have decided to go to the next step in the brand strategy and pull out Pathfinder and all the URLs. Pathfinder's demise became an ultimate consequence in that strategy."

The decision to take it down was "based on the fact that 98 percent of the traffic doesn't go to Pathfinder's home page, but to the individual sites," said a spokesman for Time Incorporated New Media.

Said Coomes, "There was more power in the individual brands than the Pathfinder brand. Why bury them under the Pathfinder name? Basically that's what the market told us."

Pathfinder, which was founded in 1994 and at the time was thought to be the potential future of big media Web sites, has been dealt tremendous criticism because of its size and layout, which attempts to show all the company's popular magazine titles on one page. In addition, Pathfinder was at the center of early debates over whether publishers should offer their content free online and risk cannibalizing their subscription and ad dollars, as well as how and whether it made sense to repurpose print material for the Web.

The Pathfinder brand in particular drew a great deal of criticism, because not only was it a new brand for the company to establish and build, but the name itself didn't illustrate the site's purpose in any way to users.

In spite of all the barbs, abysmal revenues, and lost executives, Time Warner stood by Pathfinder.

And the company remained stubbornly focused on Pathfinder even as new portals with then-unknown names such as Yahoo, Excite, and Lycos came on the scene and began drawing huge Web audiences with aggregated content from an array of sources and services such as free home pages and email. The media giant stood by and watched as those sites flew to the top of Web reach charts and became the darlings of Wall Street.

In 1997, the firm underwent a number of changes in management and direction when it named Linda McCutcheon president of its centralized new media ventures, which it named Time Incorporated New Media. As head of the division, McCutcheon set out to shepherd Pathfinder into profitability by instituting a multipronged plan aimed at growing its traffic, syndicating Time Incorporated content online, and selling magazine subscriptions as well as other merchandise.

Earlier this year Time Warner was rumored to be in talks to buy a portal, but following USA Networks' bid to buy Lycos, Time Warner executives said the company would not follow. Soon after, executives said plans were under way for Time Warner to launch five vertical hub sites aimed at more specific audiences.

The Time Incorporated New Media spokesman said the process of taking down Pathfinder has been in the works for some time because of the daunting technical task of stripping each content property away from the umbrella site. The way it is set up now, a user who types in "www.time.com," for example, is sent to "cgi.pathfinder.com/time."

"Technically it's a challenge when you have that URL embedded into every name and every page," Coomes said.

To spearhead the company's vertical hub initiative, Time Warner in January appointed Time Incorporated veteran Michael Pepe as president of e-commerce. Pepe is devising a strategy to integrate the hubs with a common e-commerce platform.

Sources within Time Incorporated New Media said Pepe held a "town meeting"-type conference April 16 to discuss the hub initiative with employees.

McCutcheon announced her resignation earlier this month for personal reasons and "to pursue new opportunities in online business." The company said Pepe's appointment and McCutcheon's resignation were not related.

For now, sources within Time Warner said the company is considering taking the magazines from under Pathfinder and placing them into the appropriate hubs. Although still in the planning stage, the source said Time will share the news hub with CNN; Fortune and Money will go into a financial hub with CNNfn; People and Entertainment Weekly will go into the entertainment hub (called Entertaindom); and Sports Illustrated will live in a sports hub.

Although the vertical hub strategy is viable and other media giants such as Viacom are making similar moves, some say Time Warner's decision is late.

"Content is heading into vertical segments, like magazines or the cable television world," said Patrick Keane, an analyst at Jupiter Communications. "Going vertical makes sense, but it's something they could've done a lot sooner."

 

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