Reading Salon.com's SEC filing last Friday was simply too depressing a way to end my week, so I decided to pass on covering it â€" then. But with the news breaking today that the company has had to lay off six (or ~20 percent) of its talented edit staff, we should go back and examine a few of those numbers for the San Francisco-based company.
First the balance sheet. For the past quarter, Salon's assets are down 12.9 percent to $2.9 million from $3.33 million at the close of Q-1. Liabilities are up 12. 1 percent to $6.45 million from $5.75 million over the same period.
Net revenues for Q-1 this year were down 48 percent over the same period in 2008. The net operating loss more than doubled in Q-1 year over year to $1.255 million. Salon has always lost money since its founding and has an accumulated deficit by now a bit north of $100 million, according to its 10-Q filed last Friday, (although a minor typo in the 10-Q places it is $102,241 â€"- just three zeroes south.)
"The Company's operating forecast for the remainder of the fiscal year ending March 31, 2010 anticipates continued operating losses," says the statement accompanying the financial results. "Salon estimates it will require between $1.75 and $2.5 million in additional funding to meet its operating needs for the balance of its fiscal year."
I'm always saddened when hearing of yet more layoffs in our industry, one that has already been so pummeled for so long that there seems no light at the end of the tunnel. But, you can see from the numbers culled from the SEC filing that new CEO Richard Gingras really had no option but to further cut costs, and at Salon, that primarily means the human costs of producing content.
"What would a content site look like if you started from how to make moneyâ€"as print media once did -- instead of taking a particular form of journalism as a given and treating how to make money from it as an afterthought?"
Rosenberg noted, "I have to admit that the phrase 'treating how to make money from it as an afterthought' struck a nerve, because that really was how things were at the beginning at Salon and so many other journalism-oriented startups in the early years of the Web. This approach was understandable, and maybe excusable, in 1995; today, it's a non-starter."
He's right -- both about then and about now. The current challenge for Salon is how to reinvent itself as a viable business and then re-grow its journalism around that new model. It's the same challenge facing every media company that's been around since the last century.
Recent related coverage by Bnet Media:
Salon Fires its CEO; Hires Veteran Gingras
Salon: In the Arms of the Angels
(Note: The author worked at Salon as part of the team that launched it in 1995, and also from 1998-2000.)