By Leslie Walker
Washington Post Staff Writer
Thursday, May 20, 1999; Page E4
The Web makes it easy to get personal – dropping in a hyperlink here, clicking on a talk-back form there – so maybe that's what primed Slate Editor Michael Kinsley to go after the top editor of rival Web "zine" Salon.
Kinsley compared stock-offering documents that Salon filed with federal regulators against Salon editor and founder David Talbot's published interviews, then posted a column saying that the filings contradicted Talbot's prior claims about the site's traffic and revenue.
In its filing, Salon disclosed that after four years of publishing its signature mix of highbrow political and cultural commentary for free, it took in just $2.1 million in revenue in the last nine months of 1998, while it spent $6.4 million. Do the math: That's a $4.3 million loss.
Kinsley has the luxury of not having to disclose much about his own site's financials, because Slate is owned by the deep-pocketed Microsoft. But if we could delve into his secret spreadsheets, we'd probably find a situation pretty much as dire as what faces Salon. (It hasn't responded to Kinsley's column, citing federal "quiet period" rules for companies about to sell shares to the public.)
Despite Kinsley's sniping, Slate and Salon are soul mates. Both are taking on the so-far-confounding task of trying to build a profitable business around serious online commentary. With the losses mounting, both are busy remaking their pages, yet again, to add more space for advertising and commerce.
It's all part of the intense mating dance going on all across the Web between online content and commerce. The sad fact is that many serious content sites are drawing less traffic than corporate sites that amount to little more than marketing brochures.
No one is quite sure why. One much-stated theory is that as a medium the Web is inherently unfriendly to long articles. People skip from thing to thing on the Web, sampling as they go. Long articles are hard to read on a screen; the old-style paper delivery system is better.
Whatever the reason for their troubles, Forrester Research is predicting that many of these kinds of sites aren't going to survive as stand-alones. The firm is predicting a continuing wave of mergers in which big Web players such as Yahoo and Amazon will buy smaller content sites to create hybrid networks blending original editorial content with direct sales.
Saying that its cumulative losses exceeded $10 million, Salon's SEC papers acknowledged that its red ink is likely to increase. After all, its game plan for expanding its still-tiny audience is to publish even more original content many times a day – and the 20 to 30 articles that Salon's 74 employees currently post every day don't exactly cost chicken feed to produce.
Microsoft doesn't deny that Slate is losing big money. After scrapping subscription fees in February, Slate underwent a site redesign this month that, like Salon's recent make-over, is aimed at making more room for advertising, sponsorships and direct shopping links. Slate publisher Scott Moore said Slate roughly doubled its ads and also developed several new sponsorships.
It's still got a long way to go in getting more advertising. Advertising consumes about 9 percent of the typical commercial Web site's screen space, vs. 62 percent for newspapers, 52 percent for magazines and 25 percent of television prime time, according to industry research firm eMarketer Inc.
On the Web, "advertising as a percentage of total content is still significantly below other media," said Rich LeFurgy, president of the Internet Advertising Bureau, a trade group. "We are in an evolutionary stage of figuring out exactly the right mix of editorial and advertising within online content, and there is clearly a movement to try to get more advertising to support the sites."
Kinsley and Moore say that in the long term they do not worry about the financial prospects for serious journalism online. Kinsley, the former New Republic editor, is fond of reminding his bosses that it took Vanity Fair and other prestigious print magazines more than six years to break even.
Unlike print magazines, in which every copy costs money to print and mail out, Web sites don't pay any extra to get their products to new readers after covering the basic costs of creating the site and articles. And in recent months, Slate's traffic has surged, largely because its decision to abandon subscription fees allowed the Microsoft Network to send its users directly into Slate.com. More readers should mean more interest from advertisers.
It's funny to watch Slate and Salon undergo strikingly similar make-overs. Salon's regulars seem more irked about the commercial clutter, but it might be because Salon has given them more anything-goes chat rooms to air their views. Salon also added 10 topic-specific section fronts to organize stories and allow more sponsorship space.
Both added a third column on the far right of their home pages for commercial links, where Salon is plugging its own name-brand merchandise – "Salon Blend Coffee now on sale for just $6 per bag!"
But as if to show how cozy the Web can make even the nastiest rivals, Salon's biggest advertiser is – you guessed it – none other than the Microsoft Network and Slate.com.
© Copyright 1999 The Washington Post Company