Forbes Inc. History

Company History:

Through its namesake magazine, Forbes Inc. has enjoyed a long history as one of the most successful and recognized publishers of financial news and information and ranks as one of the top 15 highest-grossing magazine publishers. The architect behind much of Forbes's growth was Malcolm S. Forbes, who oversaw the company from the 1960s until his death in 1990. Since that time, both Malcolm's son Steve and Casper Weinberger have chaired the company, which in addition to publishing the biweekly Forbes, also produces Forbes FYI, Forbes ASAP, and American Heritage. Privately owned, Forbes Inc. continues to be family-run, with Steve Forbes serving as president and editor-in-chief, Timothy Forbes as COO, Christopher Forbes as vice-chairman, and Robert L. Forbes as president of Forbes Global and Forbes FYI.

Bertie Charles or "B.C." Forbes was born in Buchan, Scotland, in 1880, the son of a tailor and later beer shop owner. Persuaded by a teacher that he had a knack for words, young B.C. landed a job as a type compositor with the Peterhead Sentinel, mistakenly assuming that compositors "composed" the news stories that would launch his journalistic career. Eventually, B.C. did get a chance to prove his reporting skills and won a cub reporter's job with the Dundee Courier and Weekly News, where he covered everything from murder trials to swimming contests. Forbes's taste for work was insatiable, and he quickly rose to senior reporter, only to leave Scotland for South Africa in 1902 to assume a senior reporter's position with the Johannesburg Standard and Diggers' News. Two years later, B.C. was back in Scotland with a nest egg, a growing interest in business news, and the ability to engage the people who wrote and made the news. Because New York City was, in B.C.'s words, the "greatest newspaper town in the world," it seemed only logical that an ambitious business reporter establish his career there, and in August 1904 Forbes left Scotland for good.

"Devoted to Doers and Doings": 1904--29

By promising to "work for nothing," Forbes convinced New York's Journal of Commerce and Commercial Bulletin to hire him as a reporter on the dry goods industry, where he showed an unusual ability to report not just on business news but the personalities behind it. His reputation was growing, and when a London paper offered him a job he turned it down on the condition that the Journal of Commerce make him a financial editor. In addition to these new reporting duties, he was also offered the chance to write a regular editorial column for the Journal, which soon led to an opportunity to write another column for a rival New York paper (a practice not unheard of in the period). Thus, when newspaper mogul William Randolph Hearst sought to give his New York American paper a better financial page it was natural that the prolific Forbes seemed the most likely candidate. As a Hearst writer, Forbes enjoyed even greater readership, more venues in which to print his stories, and real power as the most prominent business journalist of his time.

Though increasingly well paid by Hearst (more than $185,000 a year in today's terms), in September 1917 Forbes decided to leave the position behind to pursue the only journalistic rung he had not yet seized--running his own publication. By relying on his continued income from a column for Hearst's paper as well as loans from the many businessmen he had met as a reporter, Forbes established Forbes magazine to profile the "doers and doings" of the growing American business scene. Published every two weeks for 15 cents an issue, the early Forbes was largely written by B.C. himself and offered an unusual combination of assertive, biting prose; unabashed cheerleading for business success stories; and a moralistic streak that excoriated companies when they demonstrated corruption or exploitative labor practices.

In the boom years of the 1920s, Forbes had the business magazine front to itself, which it served well by popularizing the world of business through revealing glimpses at the personalities behind the numbers and products. To his credit, B.C. Forbes seemed to sense that the great bull market of the late 1920s was getting out of hand, and in the months before the crash of October 1929 he warned his readers that "this is the ideal time to get out of debt," that is, close out their highly leveraged stock portfolios and abandon speculative investing. Forbes thus escaped the terrifying free fall in stock prices in the fall of 1929, but he mistakenly assumed the worst was over and prematurely bought up stocks at their new bargain-basement prices. When stocks continued their descent in the months that followed Forbes magazine joined the rest of the country in hard times. Because B.C. himself continued to write for Hearst's paper, however, he could use his still sizable writing income to keep the magazine afloat.

The Great Crash and New Competition: 1929--45

However, the crash was not the only source of trouble B.C. faced as the 1930s began. In 1929 and 1930, respectively, two new competitors, Business Week and Fortune, joined the business magazine market. Both took a different approach to business news. By publishing twice as often as Forbes, Business Week embraced a news-oriented approach, and the monthly Fortune built a reputation for long, in-depth analyses of corporations. Forbes's highly subjective style and businessman-as-hero slant suddenly seemed less than cutting edge. By 1939, Forbes's advertising had fallen from 1,216 pages in 1929 to 269, and its paid circulation of 102,000 ran a distant third to Fortune's 248,000 and Business Week's 192,000.

To keep Forbes afloat, B.C. tried to innovate and diversify. He published books with such titles as The Salesman's Diary for 1938 and Daily Pep Pellets, hired and fired a series of managing editors, and shifted the magazine's focus from financial and stock market stories to a more nuts-and-bolts industrial beat. Though by 1943 B.C. could still claim an income of $50,000 and holdings of half a million dollars, his longtime safety valve, his column for the New York American, disappeared when Hearst canceled it.

Postwar Rebirth?: 1945--64

Like the U.S. economy after World War II, things began to look better for Forbes magazine as the postwar boom began to take hold. After winning the Bronze Star and Purple Heart in World War II, B.C.'s second oldest son, Malcolm, began to shake things up at the magazine, insisting that it hire its own staff and stop relying on commissioned pieces and scrapping B.C.'s insider's stock tip service in favor of the much more lucrative Forbes Investors Advisory Institute, which by 1950 was generating $51,000 a year in net profit. In 1946, Advertising Age reported that Forbes's circulation had leaped by 26,000 in the space of four months, and by 1948 Malcolm had launched the magazine's annual January 1st ranking of U.S. corporations, which eventually became a profitable source of advertising revenue (and anticipated the Fortune 500 list by five years).

Malcolm also made mistakes, however. His attempt at a coffeetable celebration of American history, Nation's Heritage magazine, may have been, as it was billed, "the most beautiful magazine in history," but its expensive inks, deluxe coated paper, and hefty newsstand price taxed Forbes Inc.'s coffers and it quickly folded in 1949. While Malcolm's older brother Bruce ran Forbes magazine's business operations, in the 1950s Malcolm pursued another quixotic and doomed pursuit that distracted him from his duties at the magazine: running for election to Congress. When B.C. died in May 1954, Forbes's postwar bloom had begun to fade, and with the magazine's ownership now divided between Malcolm, Bruce, and two other brothers (who shared a third of the company's equity) it was unclear who would lead Forbes back to battle against Business Week and Fortune. When a new managing editor, Byron "Dave" Mack, began hiring researchers to verify writers' facts, however, Forbes began to become a more reliable source of information, and this seemed to free its writers to write more confidently. Forbes's circulation once again began to climb. By the late 1950s, with Dave Mack shifted to editor and James W. Michaels hired as managing editor, Forbes was winning a larger and larger readership among business executives and investors. Between 1954 and 1958 alone, circulation grew by more than 100 percent to 265,000, and in 1957 Forbes Inc.'s revenues stood at an estimated $3.5 million annually.

Malcolm Takes Over: 1964--90

In June 1964, Bruce Forbes, whose advertising and business savvy had helped strengthen Forbes's bottom line, died of cancer at 48. Malcolm stepped into the breach, buying out the 30 percent stake of Bruce's widow to become the majority owner of Forbes's stock. He then pressured his brothers Gordon and Wallace to sell their shares and eventually gained total control of Forbes Inc. His ultimate goal was to make Forbes the highest circulation business magazine on the market, and his aggressive, award-winning "Forbes: Capitalist Tool" ad campaign paid immediate dividends. Positioning Forbes as the bold and adventurous interpreter of the story behind the news, the message of the new ads was mirrored by Malcolm's own personal promotions: local publicity visits to major advertising markets in which potential Forbes advertisers were wined and dined on the family yacht Highlander.

By the third quarter of 1966, Forbes's circulation had passed Fortune, and by the end of 1967 it stood at 500,000, ahead of Fortune by 25,000 but still trailing Business Week by 30,000 readers. There were still false steps, however. An Arabic-language version of the magazine folded in 1979, and a weekly Forbes Restaurant Guide folded after two years. Moreover, Malcolm had begun buying expensive mansions, ranches, and even a Pacific island to offer getaways for businessmen seeking to live the Forbes life. These projects lost money, however, until Forbes decided to break up his Denver-area ranch into five-acre parcels to be sold to the public through Forbes magazine and its newsstand competitors. The stratagem worked, and the Sangre de Cristo ranch eventually returned $34 million for the company on a $3.5 million initial investment. Meanwhile, by the end of 1972 Forbes's circulation had climbed to 625,000 (75,000 higher than Fortune), and subscriptions alone were generating $4.5 million a year. Advertising was bringing in $20 million a year by 1976, and the income from the Forbes Stock Market Course and from renting its Manhattan office building further padded the bottom line.

Forbes's competition was only growing fiercer, however. In 1978 Fortune switched to a twice-monthly format, which tripled its revenues over the next six years, and a year later a new magazine, Inc., appeared to seize the small business market. By 1984, Forbes's 770,000 circulation trailed Business Week by 120,000 and led Fortune by only 22,000 readers. Worse, in gross advertising revenue Business Week and Fortune led with $156 million and $101 million, respectively, with Forbes trailing at $84 million. Still, Forbes had made enormous progress since 1964: it could boast that "one in five of our readers is a millionaire," and it remained the second most profitable magazine after Playboy because it produced no international or regional U.S. editions and maintained only a slim global network of journalists and a comparatively smaller U.S. editorial staff.

In 1982 Malcolm undertook the first of several international "Friendship Tours," in which an army of "Capitalist Tool" motorcyclists and hot-air balloonists descended on such countries as China, Pakistan, Japan, Germany, Turkey, and Spain spreading goodwill and the Forbes name. The same year, Forbes launched its notorious "Forbes Richest 400" list, which helped to raise the magazine's net worth to about $250 million (with another $150 million coming from real estate and other property). By 1983, Forbes ranked eighth among AdWeek's "ten hottest" magazines (ranked by ad revenue). Since 1970, Forbes had expanded from an 18 percent share of the total ad revenues of Big Three business magazines to 33 percent, and it was Business Week that bore the brunt. In 1984, it therefore hired a new editor to stave off the Forbes threat, but new magazines including Manhattan Inc., Financial World, and Crain's were making the business newsstand an increasingly crowded, cutthroat place. In 1986, the gloves came off in the business magazine ad wars when Forbes ran a confrontational ad under the words "Business Weak."

Steve Forbes and the Technology Challenge: 1990--99

By the late 1980s Malcolm's son Malcolm S. "Steve" Forbes, Jr., who had started at the magazine in 1971, had risen to president and deputy editor-in-chief. He had been giving Forbes's editorial point of view a marked rightward tilt, which was underscored when Casper Weinberger, Ronald Reagan's secretary of defense, was named the magazine's publisher in 1989. In February 1990, Malcolm died in his sleep at age 70, leaving 51 percent of Forbes Inc. to Steve and the rest to his three younger brothers. As his celebrated father was eulogized, Steve reassured the press that the Forbes style would not change. For the most part, it seemed to be doing things right. Circulation stood at 735,000, and only Business Week sold more ad pages. American Heritage magazine, which it had purchased in 1986, had been given a new look under Steve's brother Timothy, and its ad pages grew 20 percent alone in 1989. A German edition, Forbes von Burda, had been co-launched with Germany's Burda Publications the month Malcolm died, and plans continued to launch a four-issue-per-year "lifestyle" magazine, Forbes FYI, in the fall of 1990. Only Egg, a self-styled "hip, urban" lifestyle magazine launched just before Malcolm's death failed to pan out and was shut down in early 1991.

Forbes Inc. worked hard to keep pace with the increasingly global and technology driven business climate of the 1990s. A Japanese edition was unveiled in March 1992; a Chinese edition was announced in 1993; and in 1998 Forbes Global Business and Finance, an English-language international edition, was launched under the leadership of former Canadian prime minister Brian Mulroney. Forbes Inc.'s American Heritage operations also expanded, entering the custom publishing market in 1993 and starting a quarterly African American history magazine named American Legacy in 1996. In the same year, Casper Weinberger was named chairman of Forbes Inc., and in both 1995 and 1999 Steve Forbes launched presidential campaigns that were reminiscent of his father's political crusades of the 1950s.

The challenge of the Internet was the real story, however. Forbes launched a new technology quarterly supplement, Forbes ASAP, in 1992, and in the mid-1990s Forbes moved rapidly to establish an online presence, christened "Forbes Digital Tool." As hip, new magazines, including Wired, Fast Company, Business 2.0, Industry Standard, and Red Herring, vied to become the business magazine for the Internet generation, Forbes opened a news office in Silicon Valley in 1997 and began to run more high technology cover stories. When in January 1999 Jim Michaels stepped down as executive editor after 37 years at the helm, it was no surprise that his replacement, William Baldwin, had built a reputation as a committed technophile.

Principal Divisions: American Heritage; Forbes ASAP; Forbes FYI; Forbes Global.

Further Reading:

• Forbes, Malcolm, "Cap Weinberger to Become Fourth Forbes Publisher," Forbes, October 3, 1998, p. 17.
• Donaton, Scott, "Malcolm S. Forbes Jr.," Advertising Age, March 1990.
• "Greater Expectations," Forbes, September 15, 1977, pp. 121+.
• Heller, Robert, "The Battle for U.S. Business," Management Today, August 1984, pp. 62+.
• Jones, Arthur, and Malcolm Forbes, Peripatetic Millionaire, New York: Harper & Row, 1977.
• Kuczynski, Alex, "Changing of the Guard, and Coverage, at Forbes Magazine," New York Times, October 12, 1998.
• Levere, Jane L., "Advertising: Forbes Hustles to Build Its Web Brand," New York Times, June 9, 1999, p. C8.
• "A Magazine of His Own," Forbes, September 15, 1967, p. 13.
• Motavalli, John, "Clash of the Titans," AdWeek, May 22, 1989, pp. 20+.
• Winans, Christopher, Malcolm Forbes: The Man Who Had Everything, New York: St. Martin's Press, 1990.

Source: International Directory of Company Histories, Vol. 30. St. James Press, 2000.

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