Publisher Springer on Expansion Course at Home and Abroad

On Thursday, a new magazine hit Russian newsstands, Forbes Russia, a Russian-language edition of the number two U.S. financial magazine by subscribers, Forbes. But the company behind the launch isn't American, rather it is the company behind Bild, Germany's leading tabloid --Axel Springer AG.

Despite very rough seas in the world of newspaper and magazine publishing right now, Springer has charted a ambitious course that it hopes will take it to calmer and very profitable waters.

"Springer is healthy, Springer is aggressive and Springer is on the right track," Mathias Döpfner, the company's chief executive, told reporters at a press conference in Berlin.

That track leads toward Russia, is already well-trod in Poland, and has made new in-roads in the Asian market. The company is following the trend of several of Germany's publishers who are moving abroad to make up for declining revenue from advertising at home.

Russian launch

Forbes Russia is the first title of Axel Springer Russia and according to the company, is the first Western publisher in Russia to launch of business magazine of its own. The title will have an initial circulation of 40,000 and will produced by an independent editorial team. Content will be based on the American edition with additional Russian business news and commentary.

The Russian experiment comes after the publisher's successful entry into other foreign markets, especially Eastern Europe, where Springer has titles in Poland, the Czech Republic and Hungary. In Poland, the daily tabloid Fakt has become the largest newspaper in the country, with a print run of 600,000. The company has also entered Indonesia with the car magazine Auto Bild, its first foray into Asia.

At the press conference in Berlin, Döpfner announced the a second publication in Russia later this year was "likely."

Foothold in the U.K.?

Last week, Germany's Handelsblatt newspaper reported that Döpfner flew to London to meet with executive from the Daily Telegraph about a possible acquisition.

Handelsblatt said, quoting company sources, that Springer was prepared to pay up to €1.05 billion ($1.26 billion) for the broadsheet, although the company refused to comment on the number.

London's Daily Telegraph has a circulation of 900,000 and is owned by U.S. publisher Hollinger International, which is up for sale.

Hollinger's other titles include the Jerusalem Post, the Chicago Sun-Times and the weekly magazine Spectator. Handelsblatt said Springer is only interested in the Daily Telegraph, however, and its sister publication, the Sunday Telegraph.

The company is not ignoring its home turf, where it earns 86 percent of its total revenue. Last week, Springer agreed to take a 14.5 percent stake in the publisher of the Westfalen-Blatt a regional daily. The move allows the company to expand in the state of North Rhine-Westphalia, Germany's most populous. That deal, however, is contingent upon approval by Germany's Federal Cartel Office.

Bouncing back

Although overall, the German newspaper sector is experiencing its worst days since the end of World War Two, Springer has been able to depend on the strong sales of its popular crown jewel, Bild, to ride out the storm.

The years ago, however, Springer experienced the worst losses in its history, €198 million. But by 2002 it enjoyed profits of €61 million and 2003 saw profits rise to €130 million. The bounce back was not without a price, however. The company shed close to three thousand jobs in the process.

Döpfner said he was taking advantage of Springer's rising share price to finance acquisitions and expand abroad. He said the company was enjoying its good fortune thanks to its highly successful tabloid Bild, which he said was in "top journalistic form." The paper, never far away from controversy, remains a prime fixture in the German media landscape.

"Bild is being cursed and envied," said Döpfner. "That's a good sign."