NEW YORK -- Newsweek, a 77-year-old magazine that once helped set the national news agenda, is linking its future with a startup website just two years in the making.
Three months after agreeing to buy the money-losing weekly for just $1, audio equipment magnate Sidney Harman has completed on-again, off-again negotiations to merge it with The Daily Beast.
It is not just a marriage between old and new media. Harman will also be getting as an editor for Newsweek Tina Brown, who led both Vanity Fair and The New Yorker before deciding to give Web publishing a try.
Brown said in a posting Thursday on The Daily Beast that the deal was settled Tuesday evening "with a coffee-mug toast between all parties."
It will create a joint venture called The Newsweek Daily Beast Company. Brown, who was a co-founder of The Daily Beast, will be editor-in-chief.
Harman and Barry Diller, who backs The Daily Beast through his media conglomerate, IAC/InterActiveCorp., will serve as directors on the venture's board.
Neither side disclosed how they will split up revenue that the company generates.
Although Newsweek has faced a steady decline in both readership and advertising revenue, print magazines still generally take in far more money than their Web-only counterparts.
Even so, the latest tie-up is just one of several instances lately in which Web and print publications have decided they can do better teaming up than remaining apart.
Another struggling but still prominent magazine, Forbes, bought out a Web operation called True/Slant over the summer. Like The Daily Beast, the site was also run by a print veteran, Lewis Dvorkin, who is now remaking Forbes as a more Web-centric company.
Even the staid New York Times is beginning to partner with local startups to expand its coverage at a time of shrinking resources, most recently striking a deal with the nonprofit Texas Tribune.
In the case of The Daily Beast and Newsweek, Brown wrote that it will give her site "the versatility of being able to develop ideas and investigations that require a different narrative pace suited to the medium of print."
She added that "for Newsweek, The Daily Beast is a thriving front line of breaking news and commentary that will raise the profile of the magazine's bylines and quicken the pace of a great magazine's revival."
Newsweek is certainly in need of a turnaround. The Washington Post Co., which had owned the weekly since 1961, put it up for sale back in May, conceding that it did not see a way to make the magazine profitable. It racked up $30 million in losses in 2009 and is on track to lose more money this year.
Brown pointed out some of The Daily Beast's own brand-name contributors, who may be able to help shore up the magazine's ranks. They include Howard Kurtz, The Washington Post's former media columnist, and Peter Beinart, who came from The New Republic.
Harman, the 92-year-old founder of audio equipment company Harman International Industries Inc., said in a statement, "In an admittedly challenging time, this merger provides the ideal combination of established journalism authority and bright, bristling website savvy."