I was saddened to hear about the recent financial trauma of Ebony and Jet Magazines. These two magazines formed powerful prototypes for success in black media, and may now find themselves to be casualties of the general decline of the magazine industry. They were black-owned and profitable economic institutions who set the standard for black business in America. What is saddest is that I saw this coming 3 years ago.

Warren Buffett, the billionaire investor, saw the same thing, but he saw a more general demise for both newspapers and magazines. When asked if he would ever buy into the print media industry, Buffett had this to say:

"For most newspapers in the United States, we would not buy them at any price," he said. "They have the possibility of going to just unending losses."

Ebony and Jet were no exception. The problem is that they didn't seem prepared for the changing world around them.

The newspaper industry is shot and so are many magazines. Media has changed and these outlets are no longer the only game in town. Advertisers have more effective and cost efficient ways to get their message to the target audience and the extraordinarily high advertising costs of Ebony and Jet Magazine are no longer necessary.

The thing about Ebony and Jet (both owned by the Johnson family) is that much of their financial demise could possibly have been averted. If management had taken stronger steps to adjust to the advent of the Internet, perhaps they could have remained profitable. Essence magazine took note of the trend long ago, as they invested heavily in revamping their online business model. They now have one of the strongest black news websites in America (with traffic roughly 1/4 - 1/3 of AOL Black Voices, according to Alexa.com). Ebony and Jet didn't seem to follow the lead of Essence, still holding onto the same old way of doing business that has worked for the past 40 years. That is what may cause them to go down with the rest of the industry.

It must be noted, however, that Essence Magazine was acquired by Time Warner, which may have given them a competitive advantage. Ebony Magazine did have the option of raising additional funds from the public to finance their multimedia expansion, but they did not seize this opportunity. Consistent tracking of their online growth implied that they were not transitioning as quickly as other media outlets.

There is an added challenge that perhaps the Johnson family was a little too anxious to "keep it in the family." Sharron Hunter-Rainey, an Assistant Professor of Management at North Carolina Central University states that "Throughout the history of Ebony/Jet, Johnson Publishing seems to have been more insular. Mr. (John) Johnson positioned his (adoptive) daughter to run the firm after she completed her Kellogg MBA. Clearly she knew the most important person in this decision process, but the nepotism involved in the succession planning process obviously restricted the range of candidates in the applicant pool."

During my recent trip to Nigeria, a business consultant explained that the strength of Ebony Magazine may have been it's greatest weakness. Mr. Johnson, the founder of Ebony Magazine, was a tireless visionary. He was very hands-on and never took "no" for an answer. His models for the publishing industry were tried and true and he almost single-handedly turned his publishing empire into one of the great business models of the 20th century.

The problem is that some entrepreneurs have a difficult time letting go or adapting their management style to fit new operating environments. This argument may not apply completely to Johnson and his family, but the truth is this: The magazine subscription ship was sinking, and your online presence became your life raft. Those publishers who were not able to make the adjustment in enough time found themselves charging 1980s prices in a new millenium advertising market. Such an outcome is simply unsustainable.

Dr. Carlos Thomas, a professor of Management and E-Commerce at Southern University, argues that there is a general struggle that some family owned businesses have when it comes to securing the rational mindset necessary to expand and grow as the environment changes.

"There is extensive literature which cites that entrepreneurs who are used to micromanaging the company can sometimes have trouble adjusting their business model," says Dr. Thomas.

Alliant International University Professor Alfred Lewis agrees with Dr. Thomas.

"Ebony and Jet failed to respond to the 'Paradigm Shift' in the industry-at-large by sticking to that which is familiar," says Dr. Lewis. "There is also the socio-economic shift in that African Americans have been moving away from 'traditional' black/African American publications and Ebony & Jet may have missed this shift or decided to stay the course."

Ebony and Jet Magazine are two publications that should receive black support. But this financial support should not come in the form of donations or fund-raising campaigns. It should come in the form of public financing in exchange for equity ownership in the company. The black community should not just give money to support the Johnson family, the Johnson family should give something in exchange.