British publisher plans to strengthen her web magazine – and challenge rival Arianna Huffington – by a merger with the ailing weekly

This article is more than 9 years old

This article is more than 9 years old

Tina Brown, one of New York's best-established British media figures, has set her sights on Newsweek, the historic but ailing weekly news magazine, in a move that could intensify her rivalry with Arianna Huffington, proprietor of internet magazine the Huffington Post.

Brown's ambition for the project is not in doubt – she has confirmed rumours of discussions between billionaire Barry Diller, the backer for her own online publication, the Daily Beast, and Newsweek's nonagenarian proprietor, Sidney Harman. But the New York media establishment is perplexed: why would Brown – a veteran of print magazines including Tatler, Vanity Fair, The New Yorker and her own ill-fated venture, Talk – or Diller want another money-losing proposition?

Newsweek, which lost $30m (£19m) last year, has suffered an exodus of editors and reporters since it was bought recently by Harman for $1; the Daily Beast, into which Diller's IAC group pumped as much as $20m, has no apparent business plan beyond his deep pockets. For Diller, merging Brown's Daily Beast with Newsweek would get the Beast off his books and, in a stock deal, give Diller a significant stake in Newsweek to add to his disparate media holdings.

"It could end up being a smart deal for Barry and Tina," said media commentator Michael Wolff. "It allows Barry to monetise the Daily Beast and gives Tina a vastly expanded platform."

Literary agent David Kuhn, a former associate of Brown's, told Chris Rovzar's Daily Intel blog on New York magazine's website that he welcomed the idea of a Brown-directed Newsweek. "Even a slimmed down Newsweek – in terms of staff and budget – will give her more to work with than she's working with at the Beast, or at Talk, so I'd say she has a better shot than most anyone at making the magazine work, or work for a while."

Others fail to see the point. "It doesn't seem like a solution," said an editor at another online operation, Slate.com. "It's the acquisition of two problems instead of one."

Within the Manhattan media orbit, Brown's moves are largely viewed in the context of her rivalry with Huffington. Brown, who is known for her competitiveness, is now locked in a battle with Huffington for staff and traffic. And it's personal. "They simply cannot stand each other," said one media executive familiar with both women. "Arianna's rise is deeply wounding to Tina, and the raison d'etre of the Daily Beast is to try to catch Arianna." The feeling is apparently mutual: "Tina, in her heyday, didn't give Arianna the time of day. There's a certain amount of schadenfreude here."

This week, Brown hired the veteran Washington Post media writer Howard Kurtz – "I don't think you're going to be seeing Daily Beast hiring 20 reporters of that calibre," said one senior executive – while Huffington hired Newsweek's chief political reporter Howard Fineman.

Huffington Post executives tend to dismiss the Daily Beast's challenge and describe their rival's traffic as "negligible". They note their site's internal count of traffic, in terms of unique visitors, is almost as high as the New York Times at 45 million.

The Huffington Post is projecting profitability this year on revenues of $30m, with revenue rising to $60m in 2011-2012. "We're growing for three reasons," said the company's chairman, Kenneth Lerer: "Content, technology and community." One measure of "community" – user comments – is up to 3m a month.

For Brown, who has a reputation for showing scant regard for her employers' money, the prospect of a Beast-Newsweek deal comes with an implicit threat – that Diller will not stand for years of losses.

"The most interesting thing about [a Newsweek-Beast deal] is that it suggests Diller is not endlessly patient," British online mogul Nick Denton, founder of Gawker, told Rovzar this week. "I thought he would give Tina more time and money."

Arianna Huffington née Stassinopoulos, 60

Who is she? Greek-American former conservative commentator, turned proprietor and editor of the Huffington Post, the liberal-leaning internet newspaper launched as a blog in 2005.

Power relationship In 1986, she married Republican congressman Michael Huffington (they divorced in 1997).

The old days Moved to England from Athens in 1966. Graduated from Girton College, Cambridge, and later took up with journalist and broadcaster Bernard Levin. Both became disciples of the Indian guru Bhagwan Shree Rajneesh. Began writing for the National Review. In 1981 published a biography of the soprano Maria Callas, followed, in 1989, by one of Pablo Picasso.

Now Owner of the renowned Huffington Post — unique viewing figures are 45 million a month.

Influence Last year she came in at number 12 in the first Forbes list of the most influential women in media.

Ambition Her latest book, published last month, is titled "Third World America: How Our Politicians Are Abandoning the Middle Class and Betraying the American Dream".

Tina Brown, Lady Evans, née Christina Hambley Brown, 57

Who is she? Journalist, magazine editor, columnist, talk-show host and author.

Power relationship Married Sir Harold Evans, former editor of the Sunday Times, in 1981.

The old days Graduated St Anne's College, Oxford. Started journalism as freelance with Punch. At 25, was named editor of Tatler. In 1983, brought to New York by Condé Nast's SI Newhouse to resurrect Vanity Fair. In 1992 moved to the New Yorker where she earned her nickname of "Stalin in high heels".

Now Thwarted after magazine success with Talk when it folded in 2002,

Went on to publish The Diana Chronicles in 2007, and launched the Daily Beast in 2008.

Influence 25th on the list of Forbes most influential women in the media last year

Ambition This year, Brown hosted the first annual Women in the World Summit which was attended by Hillary Clinton, Meryl Streep and Cherie Blair.

• This article was amended on 11 October 2010. In the original, quotes from David Kuhn and Nick Denton failed to carry attributions. This has been corrected. The Guardian's editorial guidelines say: "The source of published material obtained from another organisation should be acknowledged including quotes taken from other newspaper articles."