UPDATE 3-McGraw-Hill trying to sell BusinessWeek-source

* McGraw-Hill hires Evercore to sell BusinessWeek

* Magazine's value uncertain because it loses money (Adds McGraw-Hill statement)

By Jui Chakravorty Das and Robert MacMillan

NEW YORK, July 13 (Reuters) - McGraw-Hill Cos Inc (MHP.N) is trying to sell BusinessWeek magazine, a source told Reuters on Monday, at a time when media advertising sales are slumping and would-be buyers for newspapers and magazines are scarce.

McGraw hired boutique investment bank Evercore Partners Inc (EVR.N) to manage the sale, said the source, who was familiar with the situation but not authorized to discuss it publicly.

McGraw said on Monday afternoon that it was "exploring strategic options" for BusinessWeek, a common euphemism used by companies exploring asset sales. The company offered no other details. Evercore declined to comment.

BusinessWeek, founded in 1929, has around 4.8 million readers each week in 140 countries, according to the magazine's website. It built its name on articles about business and finance for the investment community, as well as general audiences interested in stocks, bonds and other investments.

BusinessWeek occupies a niche that includes titles such as Forbes, and Fortune and Money, which is owned by Time Warner Inc's (TWX.N) Time Inc.

These magazines and many others have suffered a precipitous drop in ad revenue, in part because of the recession. On a more fundamental level, subscriptions at many are falling as more people turn to the Internet for free news and information.

BusinessWeek is a money-loser for McGraw-Hill, said Piper Jaffray analyst Peter Appert, who estimates that it loses about $10 million to $20 million a year on about $130 million in revenue.

"The sale of BusinessWeek would be a positive for McGraw Hill," he added. "It eliminates a money-losing business, it removes a management distraction and it demonstrates to investors that the company is taking a more proactive stance in trying to optimize its portfolio."

The difficulty facing McGraw, and other print publication owners, is finding buyers. Print media deals are scarcer than ever.

One business magazine, Conde Nast Portfolio, shut down this year after its formula of blending hard-charging business news with Vanity Fair-style features failed to keep readers engaged.

"My estimate is somebody's going to pay zero for it," Appert said.

He suggested possible buyers as News Corp (NWSA.O), which owns The Wall Street Journal and Barron's; Time Inc; Forbes; and Bloomberg, which competes with Thomson Reuters Corp (TRI.TO)(TRI.N) in providing news and data.

Several analysts have said Time Warner might try to sell its Time Inc division, including Time, Sports Illustrated and People magazines.

Reed Phillips, a media banker at DeSilva + Phillips, said conventional metrics for measuring how much BusinessWeek is worth "go out the window" because it loses money.

"The value of BusinessWeek is the value that the buyer thinks they can extract," Phillips said.

(Reporting by Jui Chakravorty and Robert MacMillan in New York; Additional reporting by Ajay Kamalakaran in Bangalore; Editing by Greg Mahlich, Andre Grenon, Steve Orlofsky and Richard Chang)