Now, nine months since the merger was finalized, and with its thought-leader strategy long since cast off, Newsweek’s circulation is still lackluster at best. Using Q1 figures as a guide, the magazine would have made $63 million in print circulation for all of 2010, down from $80 million in 2009. It’s unlikely that’s increased this year, since paid subscriptions, which account for 92 percent of Newsweek’s circulation, declined 8 percent in the first half of 2011, to 1.4 million. Newsweek is getting less from those subscriptions, too, having lowered its average subscription price almost a dollar versus a year ago. This spring, Newsweek made an offer of 90 percent off the cover price for a two-year subscription. …

It’s not clear that the digital side of the operation is faring much better. One premise of the merger was that the combined two properties would significantly boost traffic. But despite folding Newsweek.com into TheDailyBeast.com and hiring blogger Andrew Sullivan, with his 1 million-plus unique visitors, traffic to the Beast has fallen. Monthly uniques stood at 2.6 million in September, down from a combined 5.3 million for Newsweek.com and the Beast in November 2010, when the merger was announced. (Figures are from Compete.com.) Part of the decline was because Newsweek.com ended a partnership with MSNBC that had supplied the site with almost half its traffic some months. …

“I don’t think it’s a quick turnaround,” says Reed Phillips, managing partner at media investment bank DeSilva+Phillips. “Advertisers are going to take time to get comfortable that Newsweek is on a solid foundation. And the ad market’s jittery already. I think the biggest challenge is, it has to be redefined in a way that has to be engaging with readers. New York magazine did it. With the talent The Daily Beast has, there’s anticipation that that can be done. And it needs more of an edge compared to what it was in the past, before they bought it.”