Salon narrows loss as revenue rises (ONLY TWO WEEKS OF CASH LEFT!)

CBS Marketwatch ^ | Nov. 13, 2002 | August Cole

[Drango]

Salon narrows loss as revenue rises
Online advertising market improving, CEO says

SAN FRANCISCO (CBS.MW) -- Salon Media Group said Wednesday that its subscription-driven second-quarter sales hit $1 million and helped the online media company narrow its losses.

Though working to get more financing, the online media company has $266,000 in cash on its balance sheet and still plans to hit breakeven on a cash-flow basis.

"The company is not that cash intensive," said CEO Michael O'Donnell.

Revenue for the quarter jumped to $1 million from last year's $600,000 level. Net losses came in at $1.5 million, or 11 cents a share -- narrower than the $5.6 million, or 42 cents, reported in the year-ago quarter.

Salon (SALNC: news, chart, profile) said that on a pro forma basis, the company lost $1 million, or 7 cents a share, still narrower than the year-ago loss of $1.9 million, or 14 cents.

Specifically, the company's premium subscription totaled $500,000 for the quarter, up from $300,000 last year. There are now more than 41,000 paid users for its flagship Salon Premium service and 4,300 who subscribe to the Well/Table Talk areas.

O'Donnell said the subscription service's success has reinforced its importance to potential distribution partners.

"Because Salon started putting a price tag on the content, it puts you in a whole different league," he said. That means pursuing a cable-network model for distribution online, which could boost revenue next year.

Shouldering an equally important burden in a notoriously weak corporate spending climate, ad sales came in at $500,000 -- an increase over the $300,000 last year. Looking ahead, O'Donnell said ad spending should pick up after recently bottoming out.

"There's small signs that things are improving," he said, noting that advertisers are showing signs they're starting to plan for 2003.

Shares, which may be delisted from the Nasdaq SmallCap market, ended the day up 1 cent to 6 cents. A reverse stock split is a possibility, the company said in August.

[Timesink]

Salon's in San Francisco. Marketwatch is in San Francisco. Someone probably just wrote the story as a favor to a friend who's about to lose his job.

[Drango]

I thought they were scheduled to die on November 11th or thereabouts.

I can't figure that out either...They failed to meet the NASDAQ criteria...delisting should have been automatic. But, in the 10Q from yesterday, they say "As of the date of this filing, Salon has not been notified by NASDAQ of changes to its listing."

Seems the delisting is NASDAQ's snafu.

[Timesink]

Salon has already falled from a high of 10 cents this morning down to seven.

[Timesink]

I seem to vaguely remember they got Nasdaq to give them a little breathing room on the delisting issue. Nasdaq probably decided what the heck, in a couple months they'll have either started to get their act together or be dead anyway.

[Timesink]

falled = fallen, duh

[SoDak]

Seems like they have a lot of friends who are willing to bend the rules. Someone please put a stake in 'em. I think their site has officially become the undead.

[Landru]

"...that's likely a keeper. Might come in handy for use near that jpeg you like so much."

HA!!
Maybe it would've.
But alas it's too late, FGS.

...the copy is already riding in Alan Greis' garbage truck.

[billhilly]

Now that republicans are back in control the democrats will find a way to revive their mouthpiece.

[Seruzawa]

Welfare checks were in last week. Unless Salon can convince the States to issue welfare checks on a weekly basis they are toast.

Are we going to have a party when they collapse?

[AntiScumbag]

delisting should have been automatic

nah

you can diddle around forever on nasdaq, and many do

they kick you down the stairs one market category at a time, always with plenty of time to discuss it with them, which they readily extend merely for the asking

this is especially true lately as nasdaq now has more outfits circling the sub-dollar drain than ever before in their history

if all else fails and you run out of time to yak about it, there's always the one true act of desperation, the trusty old 10 or 20 or 50 or 100 or 1,000 to one reverse-split to get you back over a buck, at least temporarily

of course, you have to have the dough to pay your lawyers to do all of the reverse-split paperwork, and they always want it up-front, because they know it is a total waste of resources and accomplishes absolutely nothing from a business point of view except to attempt to maintain a useless listing

say hello to the pink-sheets, salon

bwahahahahaha

[wideawake]

"The company is not that cash intensive," said CEO Michael O'Donnell.

Really. How do you pay your employees, Michael? In copier paper?

[ArcLight]

What is it with you guys? Speaking as a journalist, I hope they find a way to survive. It's always good to have more publications out there, and almost always bad when one of them goes under. Even if it's a publication with a well-earned rep for publishing reams of crap.

[r9etb]

Its expected that more people would go to Salon nowadays. After the harsh elections and Bush's strong popularity, the Rats are desperatly looking for some leftist sites of comfort and comradeship.

More to the point, Salon is one of those outlets that sprang up just in time for the Clinton Impeachment (along with Talk Magazine and Brill's Content), which offered a source for convenient "breaking reports," insider information, and a handy outlet for puff-piece publishing.

The other two died as soon as impeachment was over, and Salon crashed at about the same time. IMHO, all three were primarily fronts for the Clinton spin team, and once their usefulness was done, the capital dried up.

With that in mind, I expect Salon to make a healthy and surprising recovery in the run-up to the 2004 elections.

[MinuteGal]

But, but....will they have a memorial service when the rag goes belly-up? They're probably lining up that Khan guy and the Wellstoned siblings for eulogists as we speak.

Leni

[Teacher317]

It's always good to have more publications out there, and almost always bad when one of them goes under. Even if it's a publication with a well-earned rep for publishing reams of crap.

Nah. THOSE should go under. Survival of the fittest should never take a break, even for journalism. Mother Nature's rules work for a reason. Thos who publish pure crap should see some consequences for their stupidity, so that they can initiate improvements. If they absolutely refuse to do so, they should go under.

[Timesink]

afternoon bump

[RonF]

Rosie's farewell edition would be interesting enough, but Rosie's Farwell edition could be pyrotechnic!

[Media Insurgent]

"It's always good to have more publications out there, and almost always bad when one of them goes under. Even if it's a publication with a well-earned rep for publishing reams of crap."

I've got to disagree with you on that. I'm in the newspaper business myself, but I don't shed a tear when I see a lousy publication go under. There's no reason that those of us in the news/information/entertainment business should be immune to the laws of capitalism.

Salon is going under because they have a lousy business model and/or not enough people like their content. In either case, they deserve to fail. I don't say that because I don't like their political slant either. If it was a conservative site having the same problems, I'd say the same thing. The folks at Salon thought they had a good idea. The market is saying otherwise. Let the market prevail.

[Drango]

Are we going to have a party when they collapse?

We'll wait till we buy them...