Salon Asks for Help

Henry V .009 writes "Salon.com is appealing to the community for help. They haven't been able to pay the rent since December. To date, they've lost about $80 million dollars. A cause of rejoicing for some. But their many readers are understandably sorry to see them in such desperate straits. Personally I hope they stick around, I think they are one of the best sources of independant journalism on the web--even if I happen to agree with less than 10% of what they have to say. I also think that it would be a shame for them to close now that they've finally created an advertising scheme that has a snowball's chance in hell of working on the web. I can actually recall some of the adverts I've seen on Salon--what other web site can you say that about? Salon says that if they get another 50,000 subscriptions (they currently have 50,000) they'll break even for the year." In the old role-playing game "Paranoia", there was a nice quote about what would happen when the player characters (who had never been outside of their enclosed city complex) made an attempt to swim in water over their heads: "delaying drowning".

Comments

Most paper'n'ink magazines die too.

[David Kennedy]

I'm not too concerned about this as:

1. I don't find Salon that interesting.
   
2. Magazines, of the old media variety, go out of business every single day. Why should Salon be any different to them?
   

There are very few paper magazines that I subscribe to.
Same for most people. It's a tough market.

Move, Adapt, or Die

[TWX_the_Linux_Zealot]

If you look at the three things that anyone or anything can do if it is threatened, it can Move, Adapt, or Die. Salon is based in San Franscisco, California. WHAT'S WRONG WITH THESE PEOPLE?!? That's one of the highest rent places in North America! There's cheaper rent within 100 miles of where they're currently based! Obviously no one considered the "move" possibility.

As for business models changing, advertising methods changing, they don't sound like they've adapted too well either. If you've been past due since December, you should have seen the writing on the wall in at least October or November. Some companies don't even have central offices anymore, they are all working from home or have one small office, and they use their colocation site for their main office servers. That would be a way to not be screwed. They haven't exactly adapted fully, either.

What's this leave us with? Die. Salon will probably die. I'd be inclined to think of them as simply the latest fallen dotcom, that took a little longer to fold than the others. I don't begrudge them for their efforts, but things were not right in order for Salon to get this far in the hole in the first place.

Re:How does a website spend $80mln?

[Psychochild]

The great benefit the Internet was supposed to bring was the complete de-emphasis of physical location.

I'll tell you that's simply not the case because of all the things that do depend on physical location. The biggest example is taxes.

I'm the co-founder of a small company that runs an online RPG, Meridian 59. We're a "virtual" company with people that live in both California (specifically the Bay Area) and Connecticut. Because of this arrangement, I get to do over twice the amount of paperwork for taxes. Since we pay people wages, we have to register in both states for various payroll tax reporting.

On top of this, since we have workers in both states we're considered to be "doing business" in both states, so we're subject to the Sales and Use taxes for each state. When we sold some CDs containing our game, we had to report total sales and break down the sales that happened in each state in order to pay the proper taxes on them. As CFO (in addition to being a programmer), this took a non-trivial amount of my time to collect and organize this information, and to fill out the appropriate form.

Finally, there's no substitute for face-to-face contact. Building a small business is about building relationships with people; there's only so much you can do over Trillian or even a phone call.

As for the SF Bay Area, it's not so simple. Yes, it's stupid expensive to live out here. But, when you consider that there are two major cities, one of which is known to be one of the few cultural centers in the US, you realize what you are paying for. Also, there's a strong concentration of truly clueful technical people out here, especially ones that have the required skills for game development. Two of the people that are working with us (on the cheap, I might add) I met around here due to our shared interests.

I agree that a company needs to control its costs and that the excess of the Dot-Com era ruined some people, but location isn't necessarily something you want to skimp on.

Some insight on the matter,

Move!

[peripatetic_bum]

Hell, they worry about paying rent and they live in SanFrancisco!

Move!

They are web-based.

Re:Business Plan Math for the Startup

[JWhitlock]

You might be forgetting something - David Talbot probably bought a house in bubbleville. If they can find cheap office space in San Francisco, great, but anywhere else in the world and Talbot will probably have to move, and sell his house at a huge loss (if he can sell it at all). I imagine he fiananced most of it, so moving the office may save Salon, but not Talbot, from bancruptcy.

Personally, I think Salon is marching down the road to bancruptcy and reorganization, and they don't have much choice, for business and personal financial reasons.