Salon, Nearly No Money and Ultramercials

Adam9 writes "As Salon fights for survival, they have introduced a new advertising program that allows you to receive a free 12 hour pass by clicking through about 10 seconds of advertisements. Currently, the advertisements are from Mercedes-Benz. According to the article, they've lost about $79.7 million from their start in 1995. They also have about 45,000 subscribers right now." Jamie also pointed out this article from the WSJ, as well as the words from Salon themselves about it.

Comments

Most advertisers won't allow this...

[NineNine]

If they're getting paid per click, then generally advertisers don't pay for forced clicks, ie: I'm clicking this because I have to, not because I'm genuinely interested in their product. At least in the adult industry, this is a *big* no-no unless you accept a *much* smaller pay rate (generally called 'blind' clicks). I don't know how it'll fly with their advertisers.

what you're missing

[Anonymous Coward]

what you're missing is that it takes money to run a magazine... *real* journalists, *real* reporters, etc.

it took USA Today 5 YEARS to become profitable, and it was still only because they were bought out by a huge megamedia company.

Why I cancelled my subscription

[Chairboy]

I was a paying member of Salon for a year. The main way I read Salon was through my PDA using Avantgo. Salon's method for prompting users to get premium subscriptions was by giving a 1 page teaser of a premium article, then saying they should become paying members to read the rest.

Their avantgo channel, however, had no method in place for Premium subscribers to get full stories on their PDAs! For a year, the premium stories would have their little teaser, then at the bottom there would be a little apology to the effect of 'Sorry, we haven't made a channel for our premium subscribers yet, but we will soon!'

Empty promises.

They never made the channel, and since my primary interface to Salon was via PDA, I wasn't getting what I had paid for (premium access).

Their business decision to indefinately postpone the premium channels have probably cost them quite a handful of customers, which is unfortunate.

Kind of like Slashdot

[anthony_dipierro]

According to the article, they've lost about $79.7 million from their start in 1995.

During which time VA Software lost $725 million.

Re:Micropayments

[beq]

Unfortunately, PayPal charges a minimum of 0.7% + $0.30, and that rate requires use of a Paypal debit card. The problem with micropayments continues to be that it's hard to make money off such small transactions until there are millions of them. I still have fond memories of "First Virtual". They were one of the first online payment services, and they aimed squarely at micropayments. Unfortunately there wasn't enough money in it, and they went under.

A working micropayment system would solve a lot of problems in a lot of industries.

I tried it two weeks ago

[mao che minh]

I used this little feature about two weeks ago. I wanted to read the rest of one their "premium" articles that I really wanted to see the conclusion of. I just happened to actually read one of the ad's that claimed that I could get a free pass to read this article if only I would look at this $60,000 BMW or something. I agreed. After about 10 seconds an ad with about 10 frames generated. By the time I got to the third or fourth frame, I noticed that I didn't have to click through all of the images. In the lower corner, in very fine print, was a "skip to article" button or something. It worked.

Re:How did they lose $80 million?

[indiigo]

http://www.salon.com/ir/data/

Amazing what about 10 seconds of searching, a "financial" link, and a browser, will provide you.

Re:How did they lose $80 million?

[wiredog]

Over 7 years. They are more than a web site, they are an online magazine. With a staff, and reporters, that need to be paid. Also, they have hardware costs to consider. They probably upgrade the servers, routers, etc every two to three years. Federal, State, and local taxes. Rent for the offices.

dear salon,

[happystink]

You ran for 5 or 6 years by giving away 100% of your content and lost an assload of money :( . Then you started only giving away 80% and lost less money :) . But you have still lost 80 million dollars :(

Right now, you should immediately switch and give away only 20% or less of your content and charge for the rest. Maybe you will still go out of business, but if you don't do this you are guaranteed to, running crazy ad deals for mercedes is not even close to a long term solution :( . And maybe you'll actually turn your business around, if that is still even a remote possibility :()

Re:Maybe their approach is the problem?

[Anonymous Coward]

Well, Bush and the Republicans are OUT TO LUNCH with their fiscal policy.

Let's see.. take a balanced budget, give the top richest 1% a huge tax break, then let's give billions of dollars of corporate welfare to Lockheed Martin, GE, Raytheon, Northrop Grumman, Boeing, etc...

Then when the economy tanks and the little guy, from whom we collect the REAL tax money from, can't make any money anymore, and thus can't spend, the deficit will get even bigger, forcing the next administration to raise taxes to make up for our irresponsible spending.

Re:How did they lose $80 million?

[poot_rootbeer]

They are a web site. What am I missing?

It's the fact that web sites have to have content.

And Salon has a LOT of unique content, meaning writers and editors who all deserve to get paid.

But how did they lose $80 million?

[Thud457]

$80 million.
$80, 000, 000 !

1. I could see $1e6/yr for staff (ok, so they're probably terribly overstaffed!)
2. Toss in another $1,000,000/yr for facilites.
3. x (what, like, ) 7 years.
4. = $66 million PROFIT!

If these guys actually burned through $80, 000, 000 , they're doing something wrong! (of course there was a lot of that going around in the 90's!)
I don't even know what I'm doing, and I'm confident I could put together the equivalent for much less than that. The only difficulty would be getting the "A list" talent, and I'm not so sure that what they have is really that special.

Re:But how did they lose $80 million?

[Dirk Pitt]

Check their annual report:

Operating expenses:

Production, content and product: $9.8M(2001) $10.1M(2000)

Sales and marketing: $7.1M(2001) $15.5M(2000)

For those counting, that's over $42 MILLION in operating expenses JUST between production, sales, and marketing in JUST the past two fiscal years. Looks like to me someone's spending too much on advertising and IT support... (or they have the most overpaid writers in the world)

I will NEVER buy a Mercedes again.

[emil]

Everybody have a look at http://www.mercedesproblems.com/ before you even think of buying one of these clunkers.

I'm giving Volvo a try now.

Your problem: you used AvantGo

[irritating environme]

Why didn't you just grab the "print" version of Salon, which was just the article texts, every day? I've done pods development in AvantGo 3.x and 4.x, and its a serious piece of junk.

Re:Do you understand these financial sheets?

[Anonymous Coward]

Quick and dirty definitions:

APIC = cumulative money the company received for issuing stock

Accumulated deficit = cumulative net losses of the company since inception (companies that have made money call this "retained earnings")

Re:How did they lose $80 million?

[ilmdba]

looking at their balance sheets, they've lost approx. $55 million over the last three years.

this is broken out into 'production, content, and product', 'sales and marketing', and 'general administrative'.

my guess is most of the cash went into employees' pockets, and advertising/marketing campaigns.

how much you think the top dogs at salon were making back in the good ole days?

i bet there's a good number of people at salon who've raked in salaries in the $ millions over the last few years there.

Re:In other news...

[xmedar]

How about -

Indymedia

BBC

or for some partial journalism / general questioning and sometimes odd, but certainaly not bland corp media

Michael Moore

DisInfo

then there are specialist sites for different topics -

Cryptome

Statewatch