Is there a place for quality content on the Web? Salon.com, the pioneering first-class magazine available on the Web, sure thinks so. The publication, which features top-notch authors like Camille Paglia and Garrison Keillor in addition to a host of other columnists and reviewers, is making an effort to be one of the few web-only serious news sources. Part of that effort has included the purchase of salon.com from a hairdressing company, as well as the acquisition of San Francisco-based the Well, one of the oldest Internet communities.

Salon produces a network of 11 award-winning, original content sites that provide news, features, interviews, and regular columnists on specific topics ranging from arts and entertainment to politics, parenting and health. It also hosts two communities -- Table Talk and The WELL. Salon has won most major web awards including three straight Webby's, "Best Website" by Entertainment Weekly, "Best of the Web" by Business Week and "Website of the Year" by Time Magazine.

Turning content into cash

Part of the problem with sites like Salon is that it's very difficult to get Web users to pay for content. That's why Salon monetizes its content in other ways. The company's current revenues of $3 million were drawn heavily from online advertising. The company boosted its e-commerce revenues in 1999, in part through its Salon Members, which allows web users to join for discounts on e-commerce and free e-mail. Salon has also broadened its reach (and name recognition) through a number of distribution deals in 1999 and early 2000. In addition to its content deals with TheStreet.com, CNET, WebMD.com, Endeavor, Lycos, and Reuters, Salon has stayed active in getting its content out there. More recently, Salon has aligned itself with SpeakOut.com, whose online activism tools will be given prominent placement throughout Salon.com's News and Politics2000 sites, as well as the online community area Table Talk. In addition, content from Salon.com's 11 sites will be syndicated throughout SpeakOut.com's news area. Add to this the licensing agreement with Mondadori.com, an Italian publishing company. Salon will provide Mondadori with editorial content as well as receiving a share of advertising revenue from Mondadori.com pages that feature Salon.com content and will also have the right to sell some of the advertising space on those pages. In 2000 Salon announced an agreement with Bravo Networks to produce a television show intended to be a cross between 60 Minutes and Monty Python. It would reflect Salon's web site, covering news, interviews, and cultural issues. In May 2000, Salon also announced the acquisition of MP3Lit.com, the first Web site dedicated to offering spoken word and audio literature recordings in the MP3 format. Under the terms of the agreement, Salon put up $5 million worth of stocks and cash in exchange for all outstanding shares of MP3Lit.com.

Survival

In an effort to attract more readers and allow for more advertising, Salon relaunched its web site in mid-2000. The fifth version in five years was a fiasco, generating nasty emails and forcing a reversal to the original setup. Advertising revenues are sorely needed for this company, which announced in June 2000 that due to the $14 million in expected revenues and $28 million in expected expenses, Salon would cut its operating budget by 20 percent and lay off 10 percent of its staff. Stories and material on the site would be reduced by 25 percent, but there was no other course of action open. CEO Michael O'Donnell's explanation for the company's restructuring was, "You need to make sure that you'll live another day."