Salon.com Rolls Out Larger Ads, Plans for Subscription Service

Online news, culture and politics magazine Salon.com announced Tuesday that it, too, would begin using larger ad sizes and rolling out subscription services, as part of a greater industry trend away from banner ad revenue.

The announcement by the six-year-old, San Francisco-based Web publisher — considered by many a bellwether for online content (it began publishing in 1995 and generates its own content, unlike other players like Yahoo) — comes as many ad-based Internet properties are rethinking and retooling their revenue streams.

Yahoo, for one, has said it plans to throw more of its weight behind subscription-based services — especially high-bandwidth services, which it has been promising for several months — and B2B work, like corporate portal development. Doing so would help it wean itself off of advertising revenue as its chief source of income, at least until Web ad spending makes a comeback.

And like the larger Internet portal, Salon — following more business-oriented publishers CNET, New York Times Digital, CBS MarketWatch and internet.com — said it would be rolling out larger ad sizes to appeal to advertisers. Internet.com is the parent company of internetnews.com.

However, unlike Yahoo, Salon is running short on cash. In its most recent quarter, the company posted a loss of $5.6 million, or $0.43 per share, on revenues of $2.3 million — and only has about $5.8 million remaining in cash and marketable securities.

While it recently cut 25 jobs to align its expenses more closely with revenue, Salon is also betting that its new initiatives help it through what most analysts are predicting will be two to three more quarters of sluggish ad spending.

One of the new ad units Salon will roll out will be a 336×280 pixel space — corresponding to the Internet Advertising Bureau’s “large rectangle” standard. The ad unit will also accept rich media creative, Salon said, adding that existing advertisers Intel and Lexus have agreed to deploy ads in the new format.

“In order to capture our share of the $200 billion advertising market, Internet advertising needs to mature and become more competitive with broadcast television and print advertisements,” said Salon.com chief executive and president Michael O’Donnell. “Salon will work with industry leaders such as CNET and the IAB to offer our advertisers creative and engaging solutions.”

In addition, Salon will supplement what hopefully will be increasing ad revenue with a premium service, beginning in April. The Salon Premium service would offer ads-free content and “exclusive new content features” to encourage its monthly readership — which it said is 2.7 million visitors — to trade up.

“We’re excited to launch our first user-paid premium subscription, and hope to attract a significant number of paid users,” O’Donnell said. “We’re providing our readers two compelling options to enjoy Salon — on a free basis with prominent advertising, or an ‘ad-free’ version of Salon with an annual subscription. The Internet is all about flexibility and we’re delighted to provide these options to both our advertisers and our readers.”

To sweeten the deal for consumers, Salon Premium also will offer a new feature that enables users to save Salon articles for offline browsing, and to print out multiple articles for offline reading.

The news makes Salon one of the first major Web publishers to offer a premium, ads-free service in addition to its advertising-supported media. While it’s a new idea for Web media, ISPs NetZero and Juno have for months both offered fee-based Internet access plans in addition to their free, ad-subsidized access.

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