July 12, 2001

9:36 AM

Interesting plan towards a hostile takeover of 13-cents-a-share Salon, but why would this guy's syndication plan work when something like this is barely hanging on?
posted by lowblow (7 comments total)

I guess I have a lot to learn about how the world works, but it disturbs me that the primary driving factor behind everything seems to be money, money, money. Salon is a public company, ergo its only duty is to make money for its shareholders. It just feels icky to me.
posted by binkin at 12:11 PM on July 12, 2001

making money for shareholders IS the only real duty of a public company. if salon wants to exist to promote dialogue, intellectual engagement, etc., it should be a non-profit.

any organization that exists as a commercial corporate entity is about making money. corporate philanthropy and social responsibility aren't popular because corporate managers want to be good people. they're popular because these things are good marketing tools that affect the bottom line in tangible ways.

salon as a nonprofit would probably look similar or identical to salon as a for-profit. the difference is that the legal distinction between non-profits and for-profit corporations is that during operation and upon dissolution, net earnings from operations or the disposal of assets cannot inure to the benefit of the "owners" (contrary to seemingly popular belief that the it has anything at all to do with actual profitability.) salon's founders and management chose the for-profit route because they, personally *wanted to make money.* that has been the agenda from the start. maybe they want to promote dialogue, intellectual discussion, etc., while they're at it, but that was never the primary aim.
posted by lizs at 12:44 PM on July 12, 2001

Am I the only one who thinks this kid is insane? Why would I go to Salon to read The New Yorker? Or The Atlantic? I'd either go to their own sites or buy their print editions. If I was an editor for one of these other publications, why would I let my articles be published by someone else? Money, I suppose, but would that make me more money than only having people buy my magazine for it? Salon without the original content is nothing. And yet he thinks Salon without original content would be profitable within 30 days (while Amazon is still not profitable years later).
posted by dnash at 1:07 PM on July 12, 2001

lizs: I understand everything you said. I guess I wasn't really very clear - what bothers me is that anything exists for the sole purpose of making money, social responsibility be damned. I meant to add something about Salon having made that decision for itself a long time ago, but forgot.

So what I'm trying to say is that I find social responsibility (and intellectual discussion, dialogue, etc) a more compelling motivation than money, and a point that Lewis Lapham made in a recent Harper's really kind of hit the nail on the head: He mentioned something about the moral sphere of public corporations being equivalent to that of a flatworm, or some such. I am just generally disturbed that this is the accepted norm, etc etc.

Gah, I'm not very coherent this afternoon, am I?
posted by binkin at 1:51 PM on July 12, 2001

Salon was fucked the moment it went public.

At least Automatic Media is salvageable.
posted by holgate at 2:01 PM on July 12, 2001

Salon's founders fell into the trap of thinking what thousands of intellectuals-turned-entrepreneurs have thought in the last couple of decades. It goes something like this:

"I love doing this intellectual, arty stuff, but it sure isn't putting dinner on the table. Wouldn't it be great if I could find a way to combine my interest in social change with my need to make a living? There's no reason I can't make the world a better place and get rich too!"

This trap is especially alluring in these days of the Internet, which has helped cut the cost of distribution by orders of magnitude. Suddenly it seems possible that, even if the percentage of people interested in a publication like Salon is fairly low, in absolute numbers there surely must be enough takers on the Internet to be able to make such a venture at least marginally profitable. Unfortunately, while distribution costs are orders of magnitude lower on the Internet, so is people's willingness to pay for a publication like Salon.

And when outside investors stick their fingers into the pie, they are not in any event interested in marginally profitable. They are interested in insanely profitable. Any pretense of objectivity in a publication goes right out the window in a pandering for audience share and, thus, profits. The only way to allow a for-profit organization to remain true to its roots and social vision is for the founder to maintain a majority share in the company and to not care too much about money. And to dissolve the company before his death. Better yet, don't try to combine business with activism. They are matter and antimatter, with business the far stronger force.
posted by kindall at 2:42 PM on July 12, 2001

I don't see this as a serious takeover bid; as mentioned, the claim of profitability in 30 days is laughable. What this is guy is doing is getting himself some nice publicity for his other venture by latching onto Salon's brand recognition to get some column inches which he can use to mention his other interests. Savvy, but not particularly serious.
posted by jackelder at 3:46 AM on July 13, 2001