Salon Update
The "Buy Salon for Glenn" campaign gathers accolades and questions....
Some readers have asked for a better explanation of why this makes sense.
Let's take Salon's financials. As this quote shows, at a $0.05 price, Salon has a market capitalization of $707,750. Now, because of their financial distress, we'd never have to pay that much for the assets. It looks like, with the CEO leaving, and the company repeatedly requiring cash infusions in the six-figure range, that Salon will soon file for Chapter 11, or more likely, Chapter 7, protection.
At that point, here's what would be on the table:
Salon's traffic Salon's audience Salon's $4 mm in annual revenue
And here's what wouldn't be:
Salon's high public company costbase Salon's unattractive leases Salon's almost $5 mm in debt and accounts payable
The assets would go to auction, but with this beast being a money-losing monster for 7 years, no sane publisher is going to try and pick it up. As little as a few grand to a few dozen grand could pick up the property for us.
So why does it make sense for the blogosphere and for Instapundit?
Salon was trying to create a web-based magazine, and did two things wrong. First, it recreated all of the things that make magazines possible -- leases, writers, editors, etc. In short, a lot of expense.
Second, it left out what drives a web audience -- open-source, free-wheeling content.
Banding together Glenn and a few other of the stars of the blogosphere would enable us to:
1) Drive traffic to the point where revenue sticks around the $4 mm / year level
2) Without fancy office, receptionists, and editors, keep costs way low
Thereby generating significant dough to keep our favorite bloggers well supplied with electrons, caffeinated beverages, and gas for the Mazda.
Send your thoughts my way!
UPDATE: For the folks who want to know why I think this is possible, I was head of Mergers & Acquisitions at HotJobs.com and led our teams on the Monster acquisition, followed by Yahoo!'s successful $436 mm hostile offer a few months later.
