Future of Salon.com in doubt
NEW YORK - The future of Salon.com, the online culture magazine, is in doubt after a filing from its auditor revealed that the company, which is failing to generate strong revenue streams, was in need of a fresh cash injection.
Over the last two years, the website's parent Salon Media has attempted to accelerate a move into profitability with job cuts and salary cuts in an attempt to reduce the affects of the advertising downturn and dotcom bust.
So far, all attempts have failed and in its latest set of results released last week it said full-year net losses were $11.3m (£7.4m).
In the auditor's filing to the US Securities and Exchange Commission, it said: "Due to a weak US economy in general and limited visibility of advertising activity, [Salon] is unable to accurately predict if and when it will reach cash-flow break-even."
Since it was founded in 1995, Salon has received many awards including Yahoo Internet Life's Best Online Magazine, Forbes Magazine's Best Technology Site and Best Parenting Site, and Business Week's Best of the Web.
However, despite receiving acclaim for its provocative editorial, it has failed to attract advertising and efforts to introduce subscription fees for premium content have also failed. Last year, the company saw revenues almost halve to just $3.6m, with ad revenues diving 68% to $1.9m.
The company said it needs to raise additional funds within the next three to four months, but can not guarantee it will be able to.
Only last August, the company received funding of $2.5m with the proviso that it broke even with no further funding by December 31.
At the end of March, the company said it had $1.5m in available cash, less than a third of the $5m it spent on running the business last year.
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