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Cardiac kids (continued)

THE LONG-ANTICIPATED sale of Slate to the Washington Post Company late last month was a sign that the fiscal health of online media — on life support following the dot-com bust of several years ago — has taken a turn for the better. Still, some perspective is called for. To acquire Slate, the Post Company reportedly paid between $15 million and $20 million to Microsoft — the same amount that Pat Purcell paid Rupert Murdoch in 1994 dollars to buy the Boston Herald. This week, the New York Times Company paid $16.5 million for a 49 percent share of Boston’s Metro, a free weekday tabloid. And Dow Jones recently paid $486 million to acquire CBS MarketWatch, which covers business news, showing that in the online world, the real money remains in financial advice and pornography. So the Slate deal is not the stuff of high finance.

Still, the fact that the Post Company would want the eight-and-a-half-year-old Slate is a good sign, as is the stability that appears finally to have been achieved by the slightly older Salon, Slate’s main competitor, an independent operation that has survived several near-death experiences.

Perhaps one effect of the Internet meltdown of several years ago is that the survivors are more humble. Slate’s founding editor, Michael Kinsley (now editorial-page editor of the Los Angeles Times), and Salon’s founder, editor-in-chief, and chief executive, David Talbot, were famous for their public feuding. But my attempts to stir up trouble this week came to naught.

"I’ve tried my best only to say nice things about Salon," says Slate editor-at-large Jack Shafer, who’s been aboard from the beginning. Adds Talbot: "I think once the Internet bust got into full swing, it was like being survivors of a tsunami. Everybody was glad they were still there, no matter how they felt about each other before it hit."

In a sense, the only real change for Slate is that it is moving from one large corporation to another. And since the Washington Post Company and its holdings — the Washington Post and Newsweek — are already content partners with MSNBC and MSNBC.com (the "MS" is for Microsoft), there shouldn’t be much difference between the stewardship of Bill Gates and, now, Donald Graham. Culturally, though, the changes may be considerable. For one thing, Slate now finishes its abandonment of the Pacific Northwest — a headquarters more in name than in reality in recent years — and becomes a traditional New York–based magazine with a strong Washington presence. For another, at Microsoft there was no one to tell Kinsley or his successor, Jacob Weisberg, about the latest cool editorial idea he’d just had. By contrast, Slate’s stablemates now include a great daily newspaper with an excellent Web site and a weekly newsmagazine that — despite its dissimilarity from Slate — shares a passion for politics and pop culture.

Shafer notes the Post Company’s reputation for leaving its properties alone, observing that Newsweek runs entirely independently of the Post. Still, he concedes that could change. "The eternal lie of media acquisitions is that ‘we love you just the way you are and we’re not going to change anything,’ " he says. "I’m sure that they’ll have ideas. I’m not one to think that Slate is so precious it ought to be frozen in amber. We’re not a museum."

Salon, whose San Francisco base of operations is reflected in its sensibility, returned to something approaching financial health by starting to charge for subscriptions several years ago — something Slate once attempted and gave up on. Salon now has some 90,000 paid subscribers, according to Talbot, which puts it in the same range as the New Republic and the Nation. In early 2004 it also beefed up with $800,000 in new investments from Rolling Stone founder Jann Wenner and Adobe co-chair John Warnock. That allowed Salon to get back into the game journalistically, in large measure on the strength of its Washington-bureau chief, Sidney Blumenthal, a veteran journalist and political operative (as well as a Phoenix alumnus). Under Blumenthal, Salon broke stories about George W. Bush’s nonexistent National Guard service in Alabama, Republican senator Jim Bunning’s homophobic supporters, and the dubious past of Tom Coburn, a radical anti-gay, anti-abortion-rights Republican Senate candidate from Oklahoma. (Needless to say, all three won.)

Blumenthal is now leaving Salon, a parting that a source suggests may not be entirely happy, but on which Blumenthal and Talbot are putting a good face. "Lots of changes happen when elections are over," says Blumenthal, who’s working on a book about presidents and race from the time of Franklin Roosevelt. "I feel very glad to have contributed, and we did great stories that had a huge impact on the campaign coverage." Adds Talbot: "Our relationship with Sidney is changing, but I hope Sid stays on as a contributor and a writer." Talbot also says that Blumenthal’s departure does not signal a lessening of Salon’s Washington presence — a move he says would be "insane" since "so much of our subscription revenue is driven by our news and political coverage."

Slate — which, as a division of Microsoft, does not have to report its numbers separately — is said to be more or less a break-even operation these days. Salon appears to be getting there. A publicly traded company, Salon reported an operating loss of $424,000 on revenues of nearly $1.3 million for the quarter that ended on September 30. The final-quarter figures will be reported in a few weeks. And though Talbot observes that he legally cannot reveal what he expects those numbers to be, he says, "I’ve been happy with our progress over the last year."

As for whether Salon, like Slate, will eventually be sold to a major media company, Talbot says he’s been approached by three serious buyers since the site’s founding, in 1995, but for now has no plans to give up his independence. "We’ve not been approached recently," he says. "Would we be interested if a company came along like the Washington Post? I’d say not now, because we’re doing well, and I think there’s a lot more that we can keep building here at Salon."

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Issue Date: January 7 - 13, 2005
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