Reader’s Digest and friends are in serious pain. Will their prescription work?

And why stop there? The company has teamed with Saddleback Church megapastor Rick Warren in a print-and-social-networking hybrid called the Purpose Driven Connection, which dropped its first glossy magazine issue in January. The Web component has been billed as a pay-to-play "Christian Facebook" for those who prefer prayers to pokes. If the company seemed overextended a few months ago, how does one describe it now?

Still, the rollout may not be as nutty as it seems. RDA spokesman William Adler says Best You and Fresh Home are a way to test markets on the cheap, with both magazines taking broad advantage of what's euphemistically called "repurposed content," which is material RDA borrows from its own foreign titles. In fact, the move so effectively slashes costs that a group of U.S.-based freelance writers—an otherwise docile tribe that normally takes its humiliations in stride—is organizing a boycott of the publications. The company will pay a premium for the Warren vehicle, but the payoff potential there is far greater. And complications from the recession might be overstated, as magazines still require months or years to build a meaningful following, anyway. After all, Fortune launched four months after the stock market crash of 1929.

RDA may have no choice but to reach for new markets, considering its old models—and its old audiences—are going the way of the analog television. Founders DeWitt and Lila Wallace built their publishing empire around the flagship magazine, which they launched in 1922. The pocket-size pub—with its condensed and softhearted articles—gradually became the highest-circulation magazine in the world, topping out at about 17 million in the United States in the mid-'80s. As its operations grew, the company's greatest asset wasn't ad space so much as addresses: Its subscriber lists served as a massive marketing portal into wealthy homes throughout America and beyond into which they flushed books, movies, and sweepstakes.

Eventually, Aunt Mildred and Uncle Harry grew tired of the solicitations. The strategy began to falter in the '90s after RDA went public, and the company hasn't quite regained its footing since. The Wallaces' legacy was literally eroding well before the Ripplewood acquisition, as the company began selling off much of the couple's antique furniture and fine art, including Renoirs and Monets, about a decade ago. As for the Wallaces' Digest itself, which, along with the overseas versions, accounts for about 15 percent of the company's business, its readers haven't been heading to the Web so much as to the grave, with its U.S. base circulation rate having dropped to about 8 million these days. (To squeeze more pennies out of the magazine, Berner has taken its back page, which was traditionally reserved for artwork, and sold it to advertisers.) Fortunately, RDA's magazines generally aren't advertising-dependent, but as circulations fall, presumably the company's direct-marketing powers fall with them.

The post-buyout fat-trimming has brought some expected turmoil. According to three former RDA employees, Berner had to pay hefty severances to free up high-level positions from previous management; those slots were filled with well-compensated new hires, some of whom promptly bolted, anyway. Those former employees all point out that current Digest Editor Peggy Northrop and some other new hands were being driven to and from the suburban offices in Town Cars each day, even as the company started looking into restructuring—perhaps the sign of a disconnect between the new, Manhattan-bred executives and the old-fashioned, hidebound ways of Pleasantville. As one of them the former employees says, "Most people who get Reader's Digest don't get rides to work every day." In January, the company announced it was canning 300 employees, or about 8 percent of its work force, most of whom probably found little comfort in the Digest's March pick-me-up story on "how to make a layoff pay off." And along with General Motors, Coca-Cola, and others, RDA's weakening outlook has forced it to suspend contributions to employees' 401(k) programs.

Hence the gamble on Warren, which one sacked editor describes as "really shrewd and scary." The RDA executive spearheading the Warren project, Alyce Alston, had launched the hugely successful O magazine while at Hearst. As with Oprah, RDA is hoping that Warren's wide-reaching brand of evangelism can turn Purpose Driven Connection into not just a magazine but a "community," crossing media platforms, much like they've done in building a foodie society through their Allrecipes.com site and the Rachael Ray brand. "We have shot high on that one," Adler, the spokesman, says of the Warren product. "And we didn't skimp because of the recession." To better align with the new ventures, RDA plans on renaming the company, allowing the company's other ventures to escape from the shadow of the flagship Reader's Digest brand. The title and its international editions will have their "own world," Adler says.