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August 17, 2005

Salon Media Puts The Well On The Block

: thewell1.gif One of the most venerated online communities, The Well, has been put up for sale by parent Salon Media, according to its latest 10-Q, picked out by News.com. "We're diluting both our management and our resources by focusing on two brands," Elizabeth Hambrecht, Salon's CEO said in this story.
Salon.com bought The Well in 1999, during the boom days
In the 10-Q filed with SEC yesterday, rhe relevant portion about The Well: "Salon purchased The Well, an on-line community, in 1999. Even though this line of business has generated positive cash-flow since its acquisition, and is forecast to generate $0.5 million of revenue for the year ending March 31, 2006, Salon is evaluating what role, if any, this business will have in the future. As such, Salon has begun to explore the potential sale of the on-line community. The assets of The Well are predominately $0.2 million of goodwill. If The Well operation is sold, Salon will most likely not attain its forecasted revenue of $7.0 million. The potential sale of The Well is not driven by a need to generate cash to finance Salon's operations."
Also last week, the company announced its rather disappointing Q2 results: its revenues for Q2 were $1.6 million, a decrease of 6% from $1.7 million a year ago, with ad revenues decreasing to $0.9 million from $1.0 million a year ago...its subscriber base has also been skrinking: Salon has experienced a drop in overall membership, which has declined from approximately 84,500 at March 31, 2005 to approximately 80,600 at June 30, 2005.
For everything Salon, read our dedicated company page..
Update: Who would buy The Well?: Well, to start with, there aren't many choices among the traditional media companies: someone like Slate-WaPo (yes!), or maybe NYT. Another slightly tangetial buyer: Huffington Post
If any media company buys it, it will be more of a pity buy than anything. The best option is for members, or a subset of them, to attempt a community buyout, and go along the lines Plastic.com has (yes, it still exists.)
Related: Earnings: Salon.com's Revenues Decrease; Losses Shrink

Posted by dymaxion at August 17, 2005 11:40 PM


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