Magazine of the US digerati fails to hack it here US bible of the digerati fails to hack it over here

It Began in an optimistic, upbeat mood with a late-night deal in a sushi bar in Beak Street in London's Soho in 1992, and ended last week with a group of journalists sharing consolatory drinks in some pubs near London Bridge.

The occasion for commiseration: the UK edition of Wired magazine, the would-be style guide for Britain's "digerati" - the literati of the computer world - will close after its March issue. That will be in the shops in a fortnight, after which the magazine's 32 staff will be redundant.

"We knew it had been coming for about a week," said Wired UK's editor, Oliver Morton, after Wednesday's announcement by the US head office. Last-ditch efforts to bring in bigger European publishing partners failed.

A small blip in the continuing heartbeat of the magazine world? Or a subtle pointer that the British way of life is more resistant to the building of the information superhighway than our American cousins would like to believe?

There have been other signals that the world of bits and bytes is not altogether healthy in Britain. On Thursday, Virtuality - one of the few British companies dealing in virtual reality - asked for the suspension of its shares on the stock market. Rumours buzzed of a takeover, in view of its latest quarterly financial results: a loss of pounds 3.8m.

Several book-publishing companies have lately closed their "multimedia" divisions and cut short projects to make CD-ROM versions of their bestsellers. Penguin, Dorling Kindersley, Marshall Cavendish, HarperCollins, even News International, have all stepped back from the new media. Others have simply lost their shirts: First Information Group joined the UK stock market last March at a share price of 165p - valuing it at pounds 33m. By October the price was down to 15p and it had axed most of its staff.

So what went wrong at Wired? Are the digerati an endangered species in Britain?

In the US, Wired is the nearest thing to a printed form of the Silicon Valley Zeitgeist. Based in San Francisco, it started up in January 1993 and has seen sales rise steadily to 340,000.

It thrives in its locality - that warm stretch of the California coast where hi-tech companies pop up almost daily, fed by venture capitalists who do deals in the daytime and leave the products to the programmers, who arrive at 10pm and work through the night, sustained by all-night pizza delivery companies. To a Briton, just visiting them is like taking an intravenous dose of optimism: the effect is heady.

Yet Wired Ventures, the magazine's parent company, has always been stretched for cash, despite the efforts of Ian Stewart, the British entrepreneur who tied up that first deal in Beak Street. Early last year it tried to float on the US stock market, aiming to sell about a quarter of the company for $100m (pounds 62.5m). But analysts decided there were big holes in the company's finances. The flotation was delayed.

Wired returned to the flotation fray in October, but asking only for $55m. Still the market demurred. The sell-off was postponed again. Instead, the stakeholding was sold at the start of this year for $21.5m to a group of US financial institutions.

That put Wired UK under immense pressure. It had got off to a false start in March 1995, as an equal partnership with the Guardian group. After just three issues, sales had fallen to 25,000 - far too low to be sustainable - and it shut down for a brief period of bloodletting in which the Guardian pulled out and the magazine was relaunched.

The latest monthly sales figures are 40,000 - respectable, but still too low to be sustainable. The survival level for most monthlies begins at 50,000; Wired UK, with its expensive paper and intricate, migraine- inducing design, would probably need to sell double its present number just to break even. (Wired Ventures declined to comment on its profitability or required sales.)

Where did it go wrong? Actually, people now reckon that it didn't. Alun Anderson, editor of New Scientist, loves the US version, hated the first incarnation of the UK one but liked the revived version: "The last few issues were really good. If they had been able to keep going for another year, I think they would have made it." So the digerati are out there in sufficient numbers? "Yes - the magazine just needed to build them up."

Mr Morton agrees: "This term 'digerati' is useful, but the idea that it's a movement of elites is mistaken. This is about people finding technology that transforms their lives."

Nico MacDonald, 30, design manager for an Internet company, comments: "I don't think the UK would have produced that magazine on its own." From his base in Clerkenwell - which is rapidly turning into Silicon Alley - he remarks: "The US is a consumer society, a service society. It's pizza at 2am if you want it. That's not about technology, it's an aspect of life. People don't take that seriously here. The other day I wanted a computer delivered by 10am: it arrived at 5pm, with no apologies."

Ian Stewart has not been involved in the management of Wired ventures for two years. But he said yesterday: "It's a sad accident of market timing. The UK needs a magazine of this sort." He also said: "English is the lingua- franca of the Internet. There's a vibrant community of people here in Britain, far more so than in the rest of Europe."

The UK also doesn't support the techno lifestyle of the US West Coast. Venture capital is hard to come by. (Virtuality was one beneficiary in its early days.) But, notes Mr MacDonald, we do have one source the US doesn't. "The UK's club culture has combined with technology companies to produce something new. I think it's pretty groovy."