New Investors, Layoffs for Salon.com

Salon’s parent company, San Francisco-based Salon Media Group, announced it had received $2.5 million from a new 11-member group of investors.

That group includes John Warnock, the founder and chairman of software maker Adobe Systems, who also joined Salon’s board of directors, and William Hambrecht, an investment banker whose firm handled the company’s initial public offering.

Salon CEO Michael O’Donnell told The San Francisco Chronicle the investors could chip in another $1.5 million next month.

The company laid off 14 staffers yesterday and eliminated several open positions. Salon’s workforce once numbered close to 200. The latest move cuts that number from 85 to 55 positions, leaving the online magazine with an editorial staff of 30.

According to O’Donnell, the company “was [running] on fumes the last few weeks.”

“It was the hardest thing I’ve ever done,” he told theChronicle of his efforts to keep Salon alive. “The financial climate is the worst it’s been in 25 years.”

Meanwhile, Salon’s stock has taken a large enough dip to face possible Nasdaq delisting.

After reaching $15 a share following its 1999 initial public offering, the stock has dropped to 45 cents a share.

The company met with Nasdaq officials last month to plead its case. A decision is expected within the next three months.

According to a financial statement released Thursday, Salon had just $1.4 million left in the bank before the cash infusion, having sustained a $2.9 million loss for the three-month period ending June 30. It made $973,000 in revenue during that period.

Weathering the storm

Founded in 1995 and renowned for its edgy articles and attitude, Salon has fallen prey to many of the same troubles plaguing other Internet media sites.

Sluggish advertising hasn’t helped Salon’s situation, although the company changed its ad format in May to help spark advertiser interest.

And Salon executives say the site’s news isn’t all bad. Salon’s traffic remains high: 3.8 million unique visitors came to the site in July.

A subscription-based premium service launched in April scored 12,000 subscribers at $30 a piece.

Salon Premium subscribers gain access to additional site material, including the “Bushed!” collection of missteps by members of the Bush administration, an expanded version of the “Nothing Personal” celebrity column, and galleries of erotic art and photography in the Salon Sex area.

Salon’s “Table Talk” discussion site will be converted into a paid service in another attempt to boost revenue.