Congratulations to David Talbott, who weathered the storm of the dot.com bust and guided his baby Salon.com to profitability. The New York Times today reports (registration site) that he’s now stepping down as its editor-in-chief but retaining the title of chairman. He’ll be replaced as editor by Joan Walsh, his longtime deputy.
Salon will also announce its first profitable quarter, a profit of $400,000 on revenues of $2.2 million. The online magazine now has 88,000 subscribers paying an average of $7.50 a quarter, plus had $2.2 million in advertising revenues last quarter. Salon lost $1.2 million last year, but is on the road to reversing that. The company’s stock went public in June 1999 soared to $15.13 a month later, but was trading for less than a quarter dollar for the past year.
The Times article points out that opinion magazines, whether in print or online, as generally losing propositions for investors. Salon was very close to going out of business during the past two years, but was thrown a life saver by rich individuals who gave the company total of $50 million. At its current rate of quarterly profitability, Salon will be able to repay those investors by 2035, nonetheless the public investors in its stock. Salon’s market capitalization today is $3.28 million, which is highly depressed compared to its $1.6 million annualized quarterly profit. That depressed price is the market’s way of saying Salon’s business model is still precarious.
Senior Vice President of Business Operations Patrick Hurley is the other person who deserves congratulation for keeping Salon alive and now profitable. He has done a remarkable job turning Salon’s finances around. A few years ago, I didn’t think a paid subscription model would work as well as it has for Salon. I thought that the site’s subscribership would quickly peak once its avid fans immediately signed up. However, 16,000 of 88,000 net subscribers are new this past year.
Nonetheless, as the Times story quotes Talbot’s replacement as editor:
- “I think that when we went to a subscription model, we lost a lot of casual readers,” Ms. Walsh said. “My job is to get people’s awareness up and let them know that you can read Salon for free.”
Salon claims to have 3.4 million readers who visit the site every month, but it is not the buzz bomb of journalism it was when it was free. Slate, which was sold last year to the Washington Post Company, gave the subscription model a go a few years ago and threw up its hands. Now that advertising dollars are rushing toward the Web, it will be interesting to see whether Salon continues to charge at the door or will fling open the gates in pursuit of big audience numbers to sell to advertisers.”
Salon has a long way to go, but has soldiered on remarkably well.