Salon.Com — Still Doomed

Here’s an interesting SEC analysis of Salon.Com. Some highlights:

Salon has incurred significant net losses and negative cash flows from operations since its inception. As of March 31, 2002, Salon had an accumulated deficit of $76.6 million. These losses have been funded primarily through the issuance of preferred stock and Salon’s initial public offering of common stock in June 1999.

Salon believes that it will incur negative cash flows from operations for the year ending March 31, 2003. Although Salon has targeted positive cash flows from operations for the fourth quarter of fiscal year 2003, because of the rapid and unexpected sharp deterioration of the general business climate in the past year and a half, Salon may not achieve either positive cash flows from operations or financial reporting profitability in the future.

It’s difficult to see how Salon.Com is ever going to make a profit. It cut back its expenses to what it says are a bare minimum, but it is spending in excess of $10 million annually.

Meanwhile, its revenues took a drastic turn south. Total revenues declined by half last year to a paultry $3.6 million.

The SEC analysis says that Salon.Com acknowledges it will against lose money in fiscal year 2003, but apparently the company believes it will enjoy a profit in the fourth quarter of 2003. Yeah, and it might still run a sex column worth reading, but I wouldn’t bet on either of those scenarios coming to pass.

What really astounds me is that Salon.Com spends so much money and yet actually generates rather paltry visitor numbers. According to the SEC,

Salon has averaged approximately 3.5-3.8 million unique visitors per month. A unique user is an individual visitor to Salon’s network.

That’s more than $2.60 per “unique visitor”. That is way too high for what Salon.Com is selling (i.e., advertising and premium memberships).

Spinning Salon.Com’s Demise

Reuters’ coverage of Salon.Com’s demise offers a spin that I suspect will be typical with such stories — this is proof that premium subscription services and ad revenue are inherently flawed models for Internet businesses.

The author of the article focuses exclusively on revenues, never thinking to ask just how the hell Salon.Com had expenses in excess of $10 million for 2002. Or as Pud from FuckedCompany.Com put it,

So is $76.6M in the hole. How did these dumbfucks spend $75.6 million on a website that displays articles? No clue.

Salon.Com lasted longer, but it’s businesses practices were just as stupid as the dot.coms that crashed and burned while they spent their money on expensive furniture and wild parties.

Had they adopted sound management practices, they’d probably be profitable by now, but instead the focus early on was expensive offices, outrageously high salaries for David Talbot and company, and one after another side business that was going to make the difference (remember when it decided to get into the CMS market?)

Salon.Com and John Dean Chicken Out

After promising for weeks that it would publish a stunning e-book by John Dean that would finally out Watergate source Deep Throat, Salon.Com and Dean chickened out.

Dean was going to name White House Attorney Jonathan Rose, but Salon apparently feared a lawsuit from Rose and Dean claims a source told him at the last minute that Rose was definitely not Deep Throat.

So Dean’s book concludes that Deep Throat is Pat Buchanan. Or maybe press secretary Ron Zielger. And if not those two, then maybe White House aide Ray Price. Or possibly White House aide Steven Bull.

A better explanation — Woodward and Bernstein created Deep Throat as a literary device (which would better explain why the information supplied by Deep Throat was often erroneous).

Logically and Factually Challenged at Spinsanity

This article in which the folks at SpinSanity really annoyed me because it was the latest in a trend that has happened ever since SpinSanity reached an agreement with Salon.Com — it’s been engaging in the same spinning that it criticizes politicians for.

George W. Bush has been pointing out that during the campaign he said he would never tolerate a budget deficit except for war, national emergency or recession. The problem is that no one has been able to find out where he said it. From that, SpinSanity jumped to the conclusion that Bush was intentionally inventing a false anecdote,

As the New Republic’s Jonathan Chait first reported and we, among others, also wrote about, Bush’s claim that he listed three exceptions under which he would run deficits during a 2000 Chicago campaign stop — war, national emergency or recession — is blatantly false. No one has found any evidence that Bush made such a statement, and the White House has pointedly failed to provide any.

But that conclusion does not logically follow at all. Just because the White House had not presented a specific reference (it does have a few other things going on at the moment after all) does not mean that it was “blatantly false.” Spinsanity concluded that, “For now, Bush appears to think it is politically expedient to repeat this story to defend his budget plans. But the record doesn’t lie — and neither should the president.”

But, in fact, Bush did make statements like this on the campaign trail. An Associated Press account reported on a January 2000 Republican debate this way,

“This is not only no new taxes, this is tax cuts, so help me God,” Bush said, brushing away the prospect that national emergencies, such as war, might get in the way. Such developments would be “extreme hypotheticals,” he said.

“If I ever commit troops, I’m going to do so with one thing in mind, and that’s to win,” Bush said.

“And spend what it takes? Even if it means deficits?” asked the moderator, NBC’s Tim Russert.

“Absolutely,” Bush replied, “if we go to war.”

Even if Bush hadn’t said things like this, it was absurd for Spinsanity to suggest that he was necessarily fabricating it. Human memory is a tricky thing.

But as it is, Spinsanity is both factually and logically erroneous. It will be interest to see how they spin this.

[Ben Domenech was the first to dig up the AP story].

Salon’s Cutting Edge 9/11 Reporting

Friday’s Salon.Com had an excellent example of its own irrelevance. While web logs, e-zines, and other web sites were producing a lot of often compelling material on the 9/11 terrorist attacks, Salon.Com went with what it knows best — sex.

That’s right, Sex in a time of terror is actually a serious attempt to look at how the 9/11 attack affected people’s sex lives. I.e. — just another stupid excuse for Salon.Com to provide more annoying pseudo-titillating material.