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
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!