Is the 'ES Lite' a) a stroke of genius b) a moment of madness, or c) a desperate last gamble?

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a) Genius! The Evening Standard's new free paper will protect its lucrative advertising

b) Madness! Lord Rothermere has been lured into a trap by arch-rival Richard Desmond.

c) Desperate! Veronica Wadley's Standard has lost 50,000 copies in a year.

Or d) None of the above.

An estimated 600,000 Londoners who work within the area bounded by the Circle Line will leave their offices on Tuesday for a lunch break or a spot of fresh air. Nothing unusual about that. Except that for the first time, many of them will pick up a copy of the new slimmed-down - and free - version of the Evening Standard.

The Standard's owner, Associated Newspapers, has already changed the London newspaper landscape with Metro, the free paper that commuters can pick up until 9am. The launch of a free Evening Standard is something else again. So parlous are the Standard's fortunes that the move might be described, uncharitably, as an act of desperation.

Then there is the Desmond factor. Richard Desmond, owner of the Express titles and permanent thorn in the side of his Associated counterpart Lord Rothermere, has long been talking up the launch of a London paper. Associated is on its guard against any intrusions - by Desmond, Murdoch or anyone else - into what it regards as its patch. Those with longer memories recall how in 1987 it relaunched the then defunct Evening News in order to see off Robert Maxwell's London Daily News. Could it be, though, that Desmond has been bluffing all along, and that Associated has - at considerable expense - fallen for it?

Meanwhile, Associated hopes that the free paper will boost advertising revenues and help stem the paper's losses. In November, the newspaper sold 370,000 copies, down more than 10 per cent on the previous year. While sales of other newspapers, including the Mirror, are falling at a similar rate, the Standard is starting from a far lower base. Associated had to do something and fast. But the speed at which things have moved has shocked even experienced journalists at the Standard.

Uncertainty seems to reign even with the launch only 48 hours away. Mail on Sunday executive Martin Clarke has been appointed to handle the launch, and he has a team of 10 sub-editors and one chief reporter to produce the paper. But on Friday night, Standard journalists did not know who else - if anyone - would be involved and whether Standard content would make it into the newspaper. No staff meeting had been held, with only individual briefings taking place at its Kensington offices. One senior Standard journalist said that "star columnists" had started to complain about the prospect of their names appearing in what they disparagingly called a "free sheet".

That there is a perceived threat from Desmond is not in doubt. He challenged Associated's exclusive distribution deal with London Underground for the Metro, and is waiting for the Office of Fair Trading (OFT) to rule on whether his new paper can also be distributed at Tube stations. Speculation has been mounting that the OFT is close to a decision, and that it will not be favourable to Associated. Desmond is expected to launch soon afterwards, whatever the OFT's decision, and already has an editorial team and dummy lay-outs. A spokeswoman for the Express said the "Standard Lite" launch would not have an impact: "Richard Desmond is determined to launch his newspaper. The Express always works best when faced with tough competition." She rejects some executives' belief that Desmond's plans for the newspaper are an elaborate double bluff to force Associated into launching its own spoiler, that he has never had any intention of going ahead with the launch. But even without Desmond stirring up things from the sidelines, sooner or later, Associated would have done something to stop the Standard's decline. It might seem a curious way of cutting the Standard's losses - giving a new newspaper away. But it is not as crazy as it seems. Most newspaper executives talk about "managing circulation decline" and not how to reverse it. Potential newspaper buyers already get plenty of information from free sources, such as the internet, and are less willing to pay for newspapers. Since advertisers pay according to "eyeballs" - the number of people who read a newspaper. Boosting circulation by giving away newspapers is one way forward.

Paul Woolfenden, managing director of weekly financial newspaper The Business, most copies of which are free, says: "Radio is free. Terrestrial television, you could argue, is also free. Why shouldn't newspapers be free? You couldn't say that a Sky viewer is worth more than a Channel 4 viewer to advertisers. The opposite is possibly the case. As long as you can prove your readership, advertisers are interested, whether your paper is paid for or not."

Graham Lovelace of Lovelacemedia says that if the free Standard is successful, Associated could develop the model further, perhaps charging for some parts of the evening editions, such asES Magazine, and giving away the main section. "This is not the end of the Evening Standard," he says. "But it could be the beginning of a new newspaper model, one that's part paid-for, part free."

There are risks, he says. The free paper is aimed at a younger, more female audience, with more showbusiness news. Yet Associated sources also say that it wants its readers to migrate to the paid-for editions, which have a different target audience. "Readers of the 'Standard Lite' might decide that they can do without the 'full fat' version of the Standard," Lovelace adds. "It could also damage the Evening Standard brand."

Newspaper executives, and not just from Associated, will be watching the lunch-time brigade very closely over the coming weeks. If it is a success, national newspapers - most of which are also suffering declining sales - could follow suit. If it is a failure, and the Standard's downward spiral continues, then as one senior journalist on the paper remarked, "It's a case of, 'What do we do now?'"

'STANDARD' HOT SEAT JUST GOT HOTTER

The launch this week of a free edition of the 'Evening Standard' presents editor Veronica Wadley (above) with her toughest challenge since she took over from Max Hastings nearly three years ago. Sales of paid-for copies of the paper are down 50,000 in the past year, and the pressure is on to lure Londoners back into the newspaper-buying habit. It has not been an easy ride for the 52-year-old former deputy editor of both the Daily Telegraph and Daily Mail. She presided over 14 redundancies at the paper earlier this year, and fell foul of legendary art critic and columnist Brian Sewell. Critics say her mistake has been to turn the Standard into a mini version of the Daily Mail, aiming more at a 'Middle England' audience than a metropolitan one. None the less, 'ES Lite' is expected to place heavy emphasis on lifestyle and celebrity. Brought in to help launch it is the Mail on Sunday executive Martin Clarke, and there are said to be tensions between the two. However, one senior Associated journalist said last week that he thought Wadley was safe because she still had the backing of Associated's editor-in-chief Paul Dacre, who appointed her.

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