Ever since news began leaking last month that Carol Wallace was looking to end her five-year tenure at the helm of the weekly magazine, speculation has swirled as to who would be named her successor. Would it be Wallace's number two, Susan Toepfer, or perhaps Christina Ferrari, the editor who launched Teen People?

Apparently neither made John Huey's cut. Time Inc.'s editorial director stayed within the company, but went outside the magazine by choosing Nelson, In Style's managing editor, for the prestigious position.

Founded in 1974, People is now the most profitable magazine in the United States. Selling more than 3 million copies a week, it is touted as a "cash cow" or "golden goose" by many media insiders.

According to the Audit Bureau of Circulations, People's circulation rose 5 percent in the second half of 2001, compared with same period last year. Newsstand sales were also up 5 percent, at a time when many titles saw their newsstand sales numbers plummet.

Although Nelson has stellar magazine credentials - under her direction, In Style's circulation has risen from 500,000 at its 1994 launch to 1.6 million last month - she doesn't have the news background of Wallace, a former New York Daily News reporter. In Style has built its reputation on keeping readers versed in the season's must-have lipsticks and how to get runway looks for less.

Not that People is all hard-hitting news. Although Wallace once described the weekly as a magazine "about how people cope," it is perhaps best known for its "Sexiest Men Alive" installments and Best and Worst Dressed rundowns. People's combination of celebrity coverage, real-people profiles and kooky kitsch (a story on a spaghetti-eating horse is said to be one of Wallace's favorites) is, however, a consistently winning formula.

There is talk, though, that Nelson may tinker with the magazine's magic when she takes the reins on April 1. The first order of business will likely be to change People's brightly hued, dated design.

In Style's executive editor, Charla Lawhorn, will step into Nelson's old shoes. Wallace, 52, will be spending more time in Scotland, where she owns a cottage and recently opened a small spa.

This isn't the first major staff change at Time Inc. since John Huey was named editorial director last July. (Some staffers have even begun grudgingly comparing their offices to Four Times Square, where personnel moves at Conde Nast fuel media gossip on an almost daily basis.) Earlier this month, Sports Illustrated's managing editor stepped down and was replaced by US Weekly's Terry McDonnell.

The stakes are even higher in this latest Time Inc. reshuffling though. In Style and People together account for 23 percent of AOL Time Warner's advertising revenue, and up to half of the profits of its entire publishing division.