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[This Just In]

Gay-media merger called off


The proposed merger of Liberation Publications, Inc. (LPI) — publisher of the Advocate and Out magazines — and PlanetOut, the largest gay-oriented online media and services provider, is now officially off. A joint press release issued March 8 by the two privately held companies, which signed a letter of intent to merge last March, attributes the failure of the plan to “changes in the investment environment.” It noted that PlanetOut’s merger with was also a factor. The possibility of the merger had set off such a flurry of worry and criticism in the gay and lesbian publishing world that Henry Scott, the former publisher of Out magazine, had urged gay activists to contact the US Justice Department to request an investigation. (See “A Gay-Media Monopoly?”, News and Features, March 2.)

LPI president Jim Franklin says the deal could still go forward, even though the two companies have legally terminated the letter of intent: “In the future, if that is something that is still out there, and we all like the idea, we will revisit it. But there is no date on the calendar.” He adds that LPI will “have some further discussions” with PlanetOut “to see what we can do that would be mutually beneficial without merging.” PlanetOut spokesperson Bryce Eberhart agrees, claiming that the Internet company is looking forward to “continuing to work together doing even more cross-promotion, content sharing, [and] joint marketing with the Advocate.” PlanetOut (to be known as PlanetPartners following its merger with, which is expected to take place by the end of this month) hosts links to a variety of other gay and lesbian publications, such as San Francisco’s Bay Area Reporter, the Washington Blade, Girlfriends, and Hero. But the Advocate has a far higher profile and fuller integration on its site.

Scott, meanwhile, claims that the new development is no victory for fans of independent gay media. Scrapping the merger “doesn’t deal with the core problem,” he says. “What we now have is a situation where a company who has four million users has decided not to pick up another 200,000 customers. You still have two companies ... who still have 40 percent of the online gay market.” In the meantime, he notes, LPI and PlanetOut’s plans to seek other ways to work together doesn’t bode well for the national gay media. “To the degree that LPI and PlanetOut continue to combine business practices, including advertising, they have the incentive to take similar positions and act like a monolith even though they are not one legally,” he says.

Issue Date: March 15 - 22, 2001

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