Time Inc Goes it alone

Time Inc. is now the only publicly traded company in the U.S. focused just on magazines, putting even more pressure on the publisher to adapt quickly to the Internet.

The company, which began trading last week under the ticker symbol TIME, expects another drop in sales this year by as much as 5 percent, excluding the magazines it acquired from American Express Co. in September. TIME will also have to make payments on $1.4 billion in debt it raised for the purposes of the spinoff. About $590 million of that amount will be used to fund a one-time dividend payment to Time Warner shareholders.

Unlike other media companies that own other business lines, it doesn抰 have the help of assets such as a TV station or a book unit that might shore up its still-falling advertising and circulation revenue. Instead, Time Inc. must rely solely on the popularity of its titles, such as Sports Illustrated or People. The company will therefore have to innovate faster than its competitors, a tough prospect for an almost century-old publisher with about 7,700 employees. Chief Executive Officer Joe Ripp, known more for his acumen than his Internet savvy, has cut staff and is investing in digital talent to build online businesses around Time Inc.抯 well-known magazine brands.

Going solo does have some advantages. New York-based Time Inc. will be able to invest profits in its own business rather than kicking them up to Time Warner. The publisher had free cash flow of $384 million last year, and could use similar funds this year for possible acquisitions or other investments.