It’s not a huge shock to see some of those titles go: Cookie, for instance, wasn’t a prestige title for Condé–like Domino, which the publisher closed down earlier this year, it was founded in 2005.

But Gourmet is one of Condé Nast’s most famous titles, and editor Ruth Reichl is one of Condé’s best-known editors. Most observers would have figured that Bon Appétit would go instead. CEO Chuck Townsend says the Gourmet brand will live on, zombie-style, via TV and publishing deals.

Condé has long cultivated a reputation as the magazine world’s most glamorous outpost, impervious to the petty concerns that bedeviled lesser folk. But the double-punch of the ad industry’s move away from print titles and a recession that pole-axed the luxury brands Condé depends on, has staggered the publisher. (Disclosure: I do some free-lance work for Condé title Vanity Fair).

Signs of trouble showed up late last year when the publisher made uncharacteristic staffing cuts. And in 2009, it began shuttering magazines: In addition to Domino, it closed Portfolio in April, just two years after a high-profile launch.

By July, Townsend had brought on consultants from McKinsey and Company to help figure out where else it could trim; the news that September ad pages would be down anywhere from 17 percent to 47 percent made it clear that other titles would be going.

I wouldn’t expect this to be the last big set of magazine cuts, by the way: Time Warner (TWX), for instance, has made it clear that it wants to hang on to Time Inc. but that it thinks the publisher employs too many people who produce too many titles.

Here are the details on the Condé cuts, via an internal memo (intended for public consumption) from Chuck Townsend:

From: “Townsend, Chuck”
Date: Mon, 5 Oct 2009 10:16:52 -0400
To: Conde Nast Publications-All <_273fee@condenast.com>
Conversation: Announcing Changes within Condé Nast
Subject: Announcing Changes within Condé Nast

We have now completed an extensive review of our business–an important undertaking given the dramatic changes in the U.S. economy. The review has led us to a number of decisions designed to navigate the company through the economic downturn and to position us to take advantage of coming opportunities.

Condé Nast’s success comes from the ability of our publications to attract readers with a wide range of interests, as well as advertisers who value them. But in this economic climate it is important to narrow our focus to titles with the greatest prospects for long-term growth.

As a result of our review, Brides will increase its frequency to monthly to solidify its position as the most important brand in the bridal category, and Modern Bride and Elegant Bride will close.

Gourmet magazine will cease monthly publication, but we will remain committed to the brand, retaining Gourmet’s book publishing and television programming, and Gourmet recipes on Epicurious.com. We will concentrate our publishing activities in the epicurean category on Bon Appétit.

Finally, Cookie magazine will be discontinued, and resources that had been dedicated to its publishing will be invested elsewhere.

The editorial and business staffs of Modern Bride, Elegant Bride, Gourmet, and Cookie all have earned their magazines large and devoted followings. We have been proud to publish these titles, and we are grateful to the staffs for their hard work and dedication.

These changes, combined with cost and workforce reductions now underway throughout the company, will speed the recovery of our current businesses and enable us to pursue new ventures. In the coming weeks, we hope to announce initiatives to develop digital versions of our brands that will make use of new devices and distribution channels.

Condé Nast is now in its 100th year of creating the most respected and iconic brands in the publishing world. These changes will ensure that our unique publishing company will continue in its preeminent position for many years to come.

But first the company needs to figure out who the culprits are.

Microsoft (MSFT) has filed five so-called “John Doe” civil suits against the hackers, whom it can’t identify yet. Redmond accuses the unknown attackers of a variety of crimes, from fraud to copyright infringement; it says it hopes the filings will “deter malvertising in the future.” (See full text of the complaint below.)

There’s a decent chance that the Microsoft bad guys are, in fact, the same guys who hijacked the Times last weekend. The methodology they used to get the ads onto Redmond’s MSN publishing network seems similar, and so does the fake “virus detected” warning the ads use to confuse surfers.

And, intriguingly, online ad monitor Click Forensics says it thinks it has identified a link between the malware that the Times served up and the stuff that the Microsoft attackers were trying to distribute. The company also thinks the two attacks are connected to a click fraud ring it has dubbed the “Bahama Botnet.”

Even if Microsoft does end up getting its hands on these guys, I think we’ll be seeing more of this stuff. Since the Times story broke last weekend, I’ve been talking to a variety of ad tech experts about the incident. And it sounds as if the technique the hackers used to compromise the paper–essentially, passing themselves off as legitimate advertisers–will be very difficult to stop if someone is determined to use it.

The best solution I’ve heard so far: Monitoring systems that can quickly detect an attack and warn publishers that they’re running malvertisements. It’s unclear how long the bogus Times ad stayed up, but the fact that it got switched on over the weekend indicates that the attackers assumed the paper would be slow to react.

Microsoft Malware complaint –

The search giant will reportedly open up its AdX service, which is supposed to bring together ad buyers and sellers the same way a stock market does, within the next two weeks. ClickZ says the exchange is supposed to open in conjunction with next week’s AdWeek festivities in New York.

That timeline sounds right to me. Google (GOOG) has already been inviting selected clients to try out the system, which is based on the one DoubleClick ran before Google acquired the firm last year. Google told potential buyers via email that it will begin integrating their ads into the exchange this week.

None of this will have any impact on Google’s search users, but it’s potentially important for online advertisers and publishers.

Until now, the online exchange market has been dominated by Yahoo’s (YHOO) Right Media, but Google will become an instant rival as soon as it opens its doors. Meanwhile, Microsoft’s (MSFT) offering, AdECN, seems stuck in the starting gate.

Google’s exchange will open shortly after the departure of its manager, Michael Rubenstein, who is now president of ad tech start-up AppNexus.

Yesterday, the publisher said that overall ad revenue had dropped 30 percent in the last quarter, which wasn’t surprising. But Internet ad revenue dropped 15.5 percent, which was a surprise, since it’s an acceleration from the previous quarter’s loss. What gives?

Times officials have multiple explanations:

1. A lot of the loss comes from our classified ads, which have been vaporized.
2. This year’s numbers don’t look good because last year’s numbers were so great.
3. At least we’re not Yahoo (YHOO)!

Check out this exchange from yesterday’s earnings call between analyst John Janedis, New York Times (NYT) digital boss Martin Nisenholtz and ad boss Denise Warren. Seeking Alpha:

John Janedis–Wells Fargo Securities: Martin, can you just talk a bit more about where you’re seeing on the display side with the news media, did any major customers pull out? And do you think you’re losing share relative to the total industry?

Martin A. Nisenholtz: No, I mean I’ll ask Denise to comment on this specific to The New York Times, but I don’t think we can point to any major losses. I think that her comments about overall volume on the side, on the businesses, is true of the digital side as well. I would point out that, to point to Janet’s [Robinson, NYT CEO] comment about most of the hit, a disproportion of the hit coming in the classifieds area.

Denise Warren: Can I just jump in and remind you again that we had a really, really, really robust quarter overall for nytimes.com last year, but really in the display area? So we are up against really significant comps. That’s just some context that I think is important that you have.

And just based upon what we’ve been seeing in the marketplace comparing to other sites there, we do believe we are taking share in the display marketplace, and we do believe we are performing better than most of our competitors in the display marketplace.

Martin A. Nisenholtz: I mean Yahoo just announced a 14% decline in display. I think, while we’re not breaking out the numbers, I think our display performance overall at nytimes.com and across the News Media Groups was better than that.

All of this sounds right to me (for the record, last year the Times’s Web ads grew 18.3 percent in Q2). But if the Times wants to keep investors optimistic about the company’s prospects, it’s going to need a better pitch than “we’re doing better than Yahoo.”

UPDATE: For a pretty good roadmap of where the Times is headed–more dollars from customers, fewer from advertisers–check out this smart piece from the Columbia Journalism Review. It notes, for instance, that the Times is now making nearly as much from subscribers as from advertisers.

So says Nielsen, via its newest “Three Screen Report.” The tracking service says more Americans are watching TV than ever before–up 1.2 percent in the last quarter–and they’re spending more time watching TV, too–that’s up 1.9 percent, to a staggering 153-plus hours per month. Of course, the same holds true for Web video, which is growing much faster.

Here’s how the data break down. Total number of viewers (click to enlarge):

Time spent viewing (click to enlarge):

Don’t be fooled: As much as the blogosphere likes to describe the TV guys as clueless dummies, they’re well aware that they’re now competing with the likes of Hulu and Google’s (GOOG) YouTube for their viewers’ time. That’s why Hulu, the JV between GE’s (GE) NBC, News Corp.’s (NWS) Fox, and now, Disney’s (DIS) ABC, remains such a controversial site within the industry–one camp thinks it’s the best way for the networks to position themselves against the eventual move to the Web, and the other thinks they’re hastening their own demise by training viewers to expect free, on-demand access via the Web.

We may get a slightly better sense of what advertisers think about this soon. It’s “upfront” week in New York, which means that all the broadcast networks–CBS (CBS), NBC, Fox and ABC have begun selling their wares to advertisers for next year. Prognosticators are betting that upfront sales could be down by 15 percent or so this year, but they’re assuming that most of that decrease has to do with the miserable economy, not a full-blown move–or “secular shift,” as the smart guys like to say–away from TV and to the Web. If that decrease gets much bigger though, it could mean something else is afoot.

Enough with the serious! Here’s the excellent celebrity singalong from the finale of “30 Rock,” which aired last week. NBC only allows Hulu to keep episodes of the show on the site for a limited time (expect to see more of this restriction, not less), so this may only work for a few weeks. Enjoy:

CBS paid $1.8 billion for CNET last summer, and today it is dealing with the consequences: A re-org and layoffs.

CBS execs won’t release specifics on the firings and won’t say how many people were let go altogether. So news will be coming out in piecemeal fashion for some time.

The best that I can tell, though, the cuts came throughout the company’s interactive group, from its London-based last.fm radio service through CBS (CBS) headquarters in New York to CNET’s homebase in San Francisco.

Based on the fact that CBS Interactive boss Quincy Smith flew to the west coast to quarterback the re-org this morning–and the fact that CNET was much, much bigger than the CBS Interactive group–I’m assuming that more CNET employees were let go than anyone else.

Quincy, if I’m wrong, please let me know. And CBS Interactive/CNET employees can reach me directly at peter@allthingsd.com.

In the meantime, here’s the new structure of Smith’s group, via an internal memo that comes from him and Neil Ashe, his CNET counterpart:

Team,

As we come to the end of 2008, we have a lot to be proud of. CBS Interactive is the best online content network for information and entertainment. Our properties are expanding, advertisers are capitalizing on our properties and their scale, and we are positioned well to continue to grow. As we prepare for 2009 and beyond, we’d like to update you on this progress, announce some organizational changes and comment on the broader market environment and how it impacts CBS Interactive.

Progress

CBS Interactive is the 8th largest Internet network in the world. Our combined traffic is up nearly 30% since we closed the merger this summer. CNET, CBSSports.com, BNET, GameSpot, TV.com, CBS.com, last.fm, and CHOW have each had record traffic within the past three months. Our commitment to our users is paying off.

Advertisers have noticed. We have recently signed and announced deals across several of our properties with Microsoft, AT&T, Intel, Bertolli, EA, and GM. In these challenging economic times, marketers are consolidating their efforts with their best partners. Our properties, our audiences, our ideas and our insights will continue to differentiate us in the marketplace.

Finally, we have contributed to and benefited from the TV and Radio divisions of CBS. We’ve done nearly 1,500 purpose-driven promotions to our properties on Broadcast TV, Radio and local TV Stations; CHOW and GameSpot content is running on the CBS Outernet; and CNET ran a major consumer campaign in markets like New York and San Francisco through CBS Outdoor. CBS Interactive is also a key partner to CBS Television Network for major broadcast events. In just the last week, we featured complementary content for events including The Victoria’s Secret Fashion Show, the Grammy Nominations and the SEC Championship.

Moving forward, we have a lot to look forward to. Events like CES, The Grammys, and March Madness on Demand are all just around the corner. Each represent huge cross-platform opportunities where CBS Interactive will again help complete the experience with coverage on air, online, and on mobile for our audiences.

Organizational Promotions and Changes

As we enter 2009, we are making some changes to our organizational structure to capitalize on audience and advertiser overlaps. We are also making some changes to key functions so that we can realize the benefits of our position in the marketplace. These changes mark another significant milestone in our integration, as we fine-tune our organization to best take advantage of the power of our entire network.

Sports, Games and Music

We are combining our Sports, Games and Music properties into a single group led by Steve Snyder. Steve has tremendous product and leadership experience and an enthusiasm for each of these categories. In addition, Tom Jones will be moving over from CNET to head-up the sales efforts for this group. Within the group, our talented senior leaders including Jason Kint, Rich Calacci, Jaci Hays, Kevin Menard, Felix Miller, Doug Schmidt and others will report to Steve and to Tom.

Entertainment & Lifestyle

We are also moving our Lifestyle properties, CHOW and UrbanBaby, to the Entertainment group (TV.com, CBS.com, The CBS Audience Network and TheInsider.com) to capitalize on the similarities in audience and advertisers. This group will continue to be led by Anthony Soohoo with sales led by Ken Lagana. We’re excited to see the innovation that will come from this group in 2009.

Technology & News

Under the continued leadership of Joe Gillespie, our Technology & News division will bring CBSNews.com and CNET News.com into a single CBS Interactive News Group. Each site will maintain its own brand identity, while benefiting from shared resources in design, product and engineering to deliver deeper and more comprehensive coverage of major stories and events. Led by Mark Larkin, with Dan Farber as Editor-in-Chief, CBS News.com and CNET News.com will also have the opportunity to share content and collaborate on stories for the benefit of their unique audiences.

CBS Interactive Marketing

We are bringing together our key marketing functions into a new group called CBS Interactive Marketing led by Mickey Wilson. The group brings together expertise from across the organization so that we can capitalize on our biggest opportunities, and elevate the company to be a strategic marketing partner whose products, consumer insights, and ad innovations are critical to our clients’ long-term success. They will establish the company as the standard for premium content online, and define and evolve brand strategies to capture the biggest opportunities for audience and revenue growth through market planning, insights and execution.

CBS Interactive Business Development

We are also bringing together all of our business development activities. This group will be led by Mike Marquez. Mike and his team will be responsible for the development of all new partnerships, investments, and acquisitions. They will be charged with taking advantage of knowledge sharing across the whole company to ensure that we are the strategic partner of choice for the industry.

Market Conditions

As you know the general economic environment continues to be a challenge. We have always been very aggressive about managing our costs, and that requirement is even more critical now than it has ever been. We believe this new, more efficient organizational structure will produce better results for CBS Interactive, and also result in lower operating costs. It is always very difficult to make these kinds of reductions, but they come after a thorough review of how we are organized and how we operate, and what best serves our many users, advertisers and employees.

CBS Interactive is a special place because of you, and we thank each of you for what you have done, are doing, and will do to exceed the expectations of the tens of millions of people who come to our properties every day.

Today, we sit in a great position. People seek out our brands because we provide them with the information and entertainment they want and need, and marketers seek us out because of the powerful audiences we attract. We are positioned to grow in 2009 and beyond.

Best,
-q, NA

CBS Interactive continues its integration process, which now calls for the further combination of several portions of the division into unified groups oriented around similar content. This important move allows us to better align our premium content for our audiences and our advertisers, and also results in reduction in certain areas that are now duplicated in the new organization structure. We believe these moves are necessary to continue building CBS Interactive into the most creative, most efficient, most profitable and fastest growing Internet company in the media business.”

News of the re-org was first reported by paidContent this morning. No details yet on how the restructuring will play out, though a person familiar with the situation did confirm that the company will push CNET’s News.com news site and CBS’s own CBSNews.com units closer together. Both groups have already been reporting to former CNET exec Joe Gillespie since the merger went through this summer. More details as I get them.

UPDATE: Here’s the complete re-org memo.

A note to CBS employees: Since this is one story you folks are going to have a hard time covering, feel free to pass along your tips to me. You can reach me directly at peter@allthingsd.com. If you want to be completely anonymous, which is understandable but less useful to me (I won’t have any way of reaching you for follow-up) you can use the blind tip box here.