Salon.com. (Nasdaq: SALN), a leading Internet media company, today announced across the board cost-cutting initiatives as part of a program to lower 2001 operating expenses and accelerate the company's timetable to reach profitability.
The company said today that it eliminated 25 jobs, or approximately 20 percent of the workforce. The action was taken as part of an overall expense reduction -- including other operating cost cutbacks -- to align the company's revenue with expenses, and in response to current market conditions.
"The market is demanding profitability and we're committed to get there as quickly as possible in 2001," said Michael O'Donnell, Salon.com's CEO & President. "This was a difficult decision because it involves talented people who have worked very hard to make Salon a success."
As part of Salon's restructuring, the company also announced the promotion of senior executives in charge of developing new revenue streams. Patrick Hurley, Vice President of Marketing, has been named Senior Vice President of Business Operations and will oversee Salon's direct marketing initiatives to its audience of approximately 3 million users.
Bonni Hamilton, New York Regional Vice President of Advertising Sales, was promoted to Vice President of Advertising Sales and will relocate to Salon's corporate headquarters in San Francisco. Leah Tracy, Vice President of Broadband & Business Development, adds revenue responsibilities in custom sales and digital licensing. Steve Reed, Salon's Senior Vice President of Media Sales, has resigned from the company as part of the layoffs.
Andrew Ross, a Salon co-founder and Executive Vice President, has resigned from the company to spend more time with his family and pursue writing again.
The company expects revenues for the December quarter will be $2 million to $2.3 million, with per share losses on a pro forma basis (excluding non cash charges) at 23-26 cents, prior to expected one-time charges associated with reorganization.
"Salon remains committed to delivering a first-rate editorial product on a daily basis to its millions of monthly readers," O'Donnell said. "We move into 2001 with a strong brand and a strong company, plenty of cash in the bank, and well positioned to achieve profitability."
About Salon: Founded in 1995, Salon.com is a leading Internet media company that produces 10 award-winning, original content sites; maintains Salon Shop, an e-commerce gateway; and hosts two communities -- Table Talk and The WELL. In May 2000, Salon acquired MP3Lit.com, the pioneering Web offering quality spoken word and audio literature recordings. In October 2000, Salon.com launched Salon Audio, a site offering 24-hour music programming, daily downloads and streaming audio from Salon's favorite columnists, as well as hundreds of downloadable versions of short stories, poems and interviews in MP3 and Real Audio formats. Over 530 companies have advertised on Salon.com including IBM, Lexus, Microsoft, EDS, Hewlett-Packard, Mastercard, AskJeeves, Virgin Megastore Online, Kimberly Clark, and Intel. In December 1999, Salon.com announced a content and equity agreement with Rainbow Media Holdings, Inc., a subsidiary of Cablevision Systems Corporation and NBC. Strategic distribution partners include America Online (AOL), TheStreet.com, CNN.com and CNet as well as wireless innovator AvantGo. The site had 2.6 million unique visitors in September 2000 as audited by ABC Interactive, a subsidiary of the Audit Bureau of Circulations.
This announcement contains forward-looking statements concerning revenue profitability and traffic growth that involve risks and uncertainties including, among others, advertising sales, traffic, anticipated losses, the unpredictability of its future revenues and expenses, growth in use of the Internet for audio content and downloads, the unpredictability of its future revenues associated with audio content, advertising and downloads, ability to launch new Web sites, ability to cross-integrate MP3Lit.com and Salon.com, ability to build value from the Salon.com franchise, business combinations and strategic alliances. Actual results could differ materially from those discussed. More information about factors that potentially could affect Salon.com's financial results is included in the Company's filings with the Securities and Exchange Commission. All forward-looking statements are based on information available to the company on the date hereof, and the Company assumes no obligation to update such statements filed with the Securities and Exchange Commission.