Layoffs, Losses, and New CEO: How Is Salon Still In Business?

There used to be  a bit of a parlor game back in the days just after the dot-com bust predicting just when Salon.com would finally breathe its last. The company, from a financial perspective, seemed in a constant state of chaos, always living just on the edge, getting some additional money at the last possible moment to keep it alive.

Like some folks, I still read Salon from time to time. I followed some of the efforts by CEO David Talbot to create Open Salon and reinvent the Web magazine. If there was ever an opportunity missed, it was that Salon should have been the Huffington Post, but moved too slowly in that direction.

But I had long since stopped paying attention to the financial dramas and death watch.

So apparently, has just about everyone else.

I tuned back in today after seeing MediaBistro post a story about Talbot leaving. The company appointed its CTO Cindy Jeffers to be CEO:

Cindy Jeffers has been named the new CEO and CTO of Salon. Jeffers comes to Salon from The Huffington Post, where she had worked since 2010; most recently as its technical director. Jeffers will succeed David Talbot, the site’s founder.

‘Over the past year, David helped lead Salon through a period of strong growth and reinvigorated Salon’s reputation as a leading destination for political and cultural news,’ writes Salon’s communications director, Liam O’Donoghue. ‘Now, with Cindy’s experience building the Huffington Post from a scrappy start-up to a media juggernaut, we’re excited to continue expanding our reach and social engagement with innovative new features, functions and strategies.’

Wonderful, wonderful. So, uh, by the way…how’s business? Curious, I decided to take a peak. And guess what?

It’s still on the brink of death! Amazingly, as an indicator of how little attention Salon now gets, the company also recently paid a sizable severance to its CFO and has some layoffs planned but I couldn’t find any coverage of these. If you find some, send me the link and I’ll post it.

I love Salon. I’ll always root for just about any journalism startup. But still, I must ask the same question many of used to ask, lo those many years ago: How is this company still in business?

Let’s take a look.

The most recent quarterly earnings numbers were posted in February. And they paint a bleak picture. For the three months ending in December 2011, the company lost $997,000 on $1.03 million in revenues. So, they’re making about half the money need to just to cover expenses.

So, how bad is it? Bad:

“The Company’s operating forecast for the remainder of the fiscal year ending March 31, 2012 anticipates continued but reduced operating losses.  Salon estimates it will require approximately  [$ 1 million]  in additional funding to meet its operating needs for the balance of its fiscal year.  If planned revenues are less than expected, or if planned expenses are more than expected, the cash shortfall may be higher, which will result in a commensurate increase in required financing.”

No word yet on what happened at the end of March. But still, how did they get even this far? Answer, from the SEC filing:

“During the current and previous fiscal years, Salon has relied on funding from related parties, whom thus far this fiscal year, through December 31, 2011 provided [$2.125 million]  in cash advances, which includes $800,000 in the most recent  quarter.  The Company remains dependent upon its two largest stockholders for continued financial support while it seeks external financing from potential investors in the form of additional indebtedness or through the sale of equity securities in a private placement.

The Company is working with outside advisors in its efforts to obtain such funding, and explore strategic alternatives.  However, Salon does not currently have an agreement in place to provide any financing, and there is no certainty that Salon will be able to enter into definitive agreements for additional financings, and other strategic alternatives, both internal and external, on commercially reasonable terms, if at all.”

I’m not officially sure who those two major shareholders are today. But the last time Salon disclosed its ownership back in 2007, it was:

  • William R. Hambrecht, the banker
  • John Warnock, the co-founder of Adobe

At the time, Gawker identified these two as the source of money keeping Salon alive.

One year ago, Salon had 41 employees. But in the latest filing, it appears the company has decided to let 13 of its employees go. Among those leaving was CFO Norman Blashka who received a nice $181,000 severance payment.

According to another filing, the current Salon board consists of: “John Warnock, Deepak Desai, George Hirsch, James Rosenfield, David Talbot and William Hambrecht.”

How long will Salon survive? It apparently has some nice sugar daddies, and  I suppose it’s anyone’s guess how long they’ll keep pouring money in.

But that’s just as it always was. Tune back in later for another edition of…As Salon.com turns!

 

 

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  • http://- kim gamble

    Thanks for this.

    As a regular contributor to Open Salon I often wonder what goes on upstairs.

    I wonder too, whether Open itself costs much to run ie. how much of a burden it might be to the group.

    No answers here, but a fascinating background. Appreciated.

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  • cabdriver

    I read and comment on Salon regularly- or perhaps the term “obsessively” would be more appropriate.

    But I throw up my hands when I see how the potential of the site is squandered.

    Salon.com had- and perhaps still has- a chance to innovate as an Internet version of the original definition of a “salon” gathering (per the Wiki definition, which is servicable enough: “a gathering of people under the roof of an inspiring host, held partly to amuse one another and partly to refine taste and increase their knowledge of the participants through conversation.”)

    But for that to happen, several things need to be emphasized:

    The articles need to bring some individual contribution to the table, rather than merely amounting to comments on other media reports- or, worse, a simple abridged rehash of another story.

    The site can’t run scared of depth. I needs to feature expanded story length that shows evidence of research and investigation.

    The site needs to contain an element of novelty and unpredictability in its ability to entertain ideas- in contrast to relying on contrivance and sensationalism.

    The role of active comments needs to be emphasized, to cultivate a nexus of information and commentary that makes for worthwhile reading. This, I think, also necessarily entails the active engagement of Salon writers with those who post in the Comment section.

    Above all, Salon needs to be in the position to exalt textual content over image. It needs to exploit its potential to act as a legitimate clearinghouse for vital and valuable information.

    I and other Salon regular comment writers have repeatedly made suggestions on how the site can improve itself. Almost none of them have been taken. And in point of fact, several of the format changes have worked to denigrate the notion that comment writers could fulfill any useful role on the site. The foregone conclusion appears to be that Internet commentary will forever remain the province of immature halfwits, on every site, forever.

    Beyond that, the format changes continue to shunt aside the role of textual content, making the site steadily more unreadable. It’s certainly nearly unreferencable. Consider what’s happened to Comments: the Permalink feature for individual comments no longer works; the page archive for comment is no longer presented in its totality; in fact, there’s no longer any overt acknowledgement to casual readers that comments are archived. The presence of a comment archive was the feature that drew me to Salon in the first place.

    My own archive: http://www.salon.com/user/cabdriver

    Hopefully, that brings up something, although the sequencing format now makes it virtually impossible for me to specifically reference my previous comments…(is there a dedicated keyword Search function for that? Of course not! Although it’s been requested, among a host of other recommendations that have been ignored…)

    The format deficiencies are even more glaring as far as the archives of the articles themselves- there’s no semblance of library science in any of the indexing. For instance, there’s no easily accessible comprehensive archive for any Salon writer that’s indexed by story/review/article title in text- even though a title chronology should by all rights fit on one scrollable page. Instead, readers clicking on Salon contributor names find the previous 3-6 stories by an author, attached to picture graphics and “jump” paragraphs…how did this catch on? It’s utterly superfluous!

    I could go on and on about the multiple occasions for ridicule and derision found in Salon’s use of stock photo imagery (example: a recent article on the possible discovery of Amelia Earhart’s fate on a remote Pacific atoll featured a pic of the Iao Needle on Maui, Hawaii- ??? !!!!) ; their dreadful, sensationalist subhead writing; and their increasing resort to first person “human interest” accounts that seem to be intended as the middle-class liberal Internet version of the Jerry Springer Show- all woven into the fabric of what was once described as an investigative journalism site featuring hard-hitting political news and commentary by the writers.

    Is this a system? No.

    It is not a mystery to me why the site is a target of derision in the comments, and it is not a mystery why it’s failing. Salon persists in copycat thinking. It could be something at the level of the New Yorker of the Internet, with a more freewheeling feel than the Atlantic or Slate- a site that could cultivate on-line discussion at an unprecedented level. Ironic that many of Salon’s contributors have been quite illustrious over the years- and now, that presence is virtually absent.

    Instead, today’s Salon can’t make up its mind whether it wants to be Wonkette or Nerve. But Nerve and Wonkette already exist, and it seems that very few people are seriously interested in Nervkette Lite 3.0.

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  • I’m 1st

    they got some good stuff

 
 
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