PlanetOut Faces a "Dire" Financial Crisis
Wed. May 16, 2007 12:00 AM by Kevin Wayne
Owner of Gay.com, Advocate reports a dismal first quarter
Last week PlanetOut reported a loss of $6.9 million for the first quarter. CEO Karen Magee said "our business model is in transition."
A year ago the San Francisco company (NASDAQ: LGBT) lost just $132,000 in the same quarter.
The San Francisco Chronicle reports PlanetOut disclosed this week that it will run out of money before the end of the year without an infusion of cash.
According to the Chronicle, the dire situation is a consequence of PlanetOut's declining subscriptions for personal ads, a shortfall in advertising revenue and trouble booking passengers on its gay-oriented cruises.
Advertising revenue was flat at $5.3 million, but fell in subscription and transactions compared with the first quarter last year. Total revenue fell to $16.8 million, down from $17.6 million a year ago in the same period.
PlanetOut Inc. owns Gay.com, along with the Advocate and Out magazines.
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