Salon Gets a Lifeline

Salon Media Group, the publisher of online culture and politics site Salon, said on Friday it received an $800,000 round of funding that would give it the needed breathing room to reach profitability.

The funding, led by previous investors Bill Hambrecht and John Warlock, is on top of $1.3 million Salon has raised since last July. The company said the funds would allow it to continue its march to self-sufficiency, which is keyed on its new hybrid subscription and sponsorship model.

In January, Salon closed the gates on its site, forcing readers to either pony up for a subscription or earn a “day pass” by watching a multi-screen Internet ad.

Salon instituted its subscription program in April 2001, giving access only to readers paying a minimum of $18.50 a year for access to the site with ads and $30 for ad-free viewing. Non-subscribers, however, still had access to about 80 percent of Salon’s content.

In November 2001, after signing up 50,000 subscribers, Salon experimented with a day pass, using rich media “Ultramercials” to give readers a chance to sample the site’s premium content. Mercedes-Benz was the first Ultramercial advertiser, showing a four-screen ad for its E Class sedan.

Since then Salon said 14 advertisers, including The Discovery Channel, Infiniti, HBO and American Express, have signed on to run day-pass sponsorship campaigns. The site now has a total of 60,000 subscribers with a 72 percent annual renewal rate.

“We hope this funding give current and prospective subscribers renewed confidence,” said Michael O’Donnell, Salon’s president and chief executive. “We also believe this will boost our advertising sales, as agencies and clients evaluate major media campaigns to run on Salon.”

The San Francisco-based e-zine, which made its name as a haven for independent-minded online journalism, has suffered perpetual financial woes, losing a total of $80 million since its founding in 1995.

Paid content on the Internet has continued its creeping growth. According to a study released last week by Jupiter Research, which is owned by the parent company of this site, the market for paid content online will grow 30 percent this year to $2 billion.