SAN FRANCISCO, Aug. 9 /PRNewswire/ -- Salon Media Group, Inc., a leading new media company announced today that it has secured a first phase of new financing, totaling $2.5 million. The round was led by Bill Hambrecht, Chairman & CEO of WR Hambrecht+Co., and followed by a combination of venture capital firms and individuals including WR Hambrecht+Co.; John Warnock, the Founder and Chairman of Adobe Systems; the McKay Investment Group; Alacrity Ventures and Constellation Ventures.
The company also announced significant cost reduction moves including layoffs of 14 employees and the conversion of Table Talk, Salon's free discussion board, to a paid service.
"This new financing helps ensure that Salon will survive this current Internet shakeout and achieve its goal of becoming profitable," said Michael O'Donnell, Salon's President and CEO. "Given the difficult financing climate, this latest investment by an impressive group of investors is a major endorsement for the Salon brand and its long-term potential for shareholders."
In recent months, Salon has successfully established a new subscription revenue stream, securing nearly 12,000 paying subscribers for Salon Premium in the service's first 90 days. By converting Table Talk to a paid service like Salon's existing subscription-driven community, The Well, Salon is placing increased emphasis on its subscription strategy. Despite the current advertising downturn affecting the entire media industry, Salon also remains committed to building its ad sales revenues, extending its relationships with major customers such as Lexus, IBM, Intel and Motorola.
John Warnock, the Founder and Chairman of Adobe Systems will join Salon's Board of Directors, along with Rob McKay, Managing Director of the McKay Investment Group, and Bob Ellis, a former executive at NBCi and Time, Inc. "We're excited to bring John Warnock, Rob McKay and Bob Ellis onto the Salon Board of Directors. They have tremendous experience building large, profitable companies and we look forward to working closely with them as we execute our new business plan in the coming months." said O'Donnell.
Founded in 1995, Salon.com is a leading Internet media company that produces 10 award-winning, original content sites and hosts The WELL, a subscription-based online community. Salon logged 3.8 million unique visitors in July 2001, as audited by the Audit Bureau of Circulations. Over 530 companies have advertised on Salon.com including IBM, Lexus, Microsoft, EDS, Hewlett-Packard, Mastercard, AskJeeves, Virgin Megastore Online, Kimberly Clark, Powell's Books and Intel. In December 1999, Salon.com announced a content and equity agreement with Rainbow Media Holdings, Inc., a subsidiary of Cablevision Systems Corp. and NBC. Strategic wireless distribution partners include AvantGo, Omnisky, Palm.net and Skytel.
"Safe Harbor" Statement under the U.S. Private Securities Litigation Reform Act of 1995: This press release, including the statements by Michael O'Donnell, contains certain "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are naturally subject to uncertainty and changes in circumstances. Actual results may vary materially from the expectations contained herein. The forward-looking statements contained herein include statements about future financial and operating results of the Company and benefits of the financing. Factors that could cause actual results to differ materially from those described herein include: the inability to obtain regulatory approvals; the economic environment of the media industry; the difficulty in securing on-line advertising; uncertain revenue sources and the general economic environment. More detailed information about these factors is set forth in the reports filed by the Company with the Securities and Exchange Commission. The Company is under no obligation to (an expressly disclaims any such obligation to) update or alter its forward-looking statements, whether as a result of new information, future events or otherwise.
NOTE: Salon.com is a registered trademark of Salon Media Group, Inc. All other company and product names mentioned are trademarks of their respective owners.