April 10, 2008
PlanetOut sells Advocate, Out, Alyson
Posted by: Chris
UPDATE: The portion of this post that reports the LPI sale did not include Specialty Pubs turns out not to be correct. For details, check out my subsequent post.
The gay media conglomerate PlanetOut dropped a bombshell yesterday, announcing that it would sell off its magazine and book publishing business, including marquee titles like the Advocate, Out and Alyson Books, to Here Networks for a pricetag of $6 million. The deal should be formalized by the end of the month and the sale completed by Aug. 31, the San Francisco Business Times reported:
PlanetOut … wants to return its focus to its web sites gay.com and planetout.com, which have been contributing a smaller percentage of its revenue recently.
The company's online segment has been contributing less to its revenue for each of the last three years. In 2005 it accounted for 87 percent, in 2006 54 percent, and in 2007 51 percent. Magazine publishing's portion of total revenue rose in each of those years, from 13 percent in 2005 to 46 percent in 2006 and 49 percent in 2007.
The sell-off is the latest chapter in the de-coupling of gay media, just years after a trend toward conglomeration. PlanetOut Inc., was itself the result of the December 2000 merger with PlanetOut Corp. (planetout.com) and Online Partners (gay.com). Only months earlier that year, Liberation Publications., Inc. (LPI), which published the Advocate, Alyson Books and soft-core "adult" titles under the name Specialty Publications, had purchased rival Out magazine. Then, in November 2004, PlanetOut Inc., bought LPI, for $32.1 31.1 million (or about $36 35 million in 2008 dollars).
Just four short years later, with PlanetOut struggling financially, the sales price for LPI is only a fraction of what PlanetOut paid, likely reflecting the difficult economic market for print publications generally, and nationwide magazines in particular. These have been challenging times for the Advocate, published biweekly, and Out, published monthly, when local gay publications publish weekly and the Internet is on a 24-hour news cycle.
Here Networks didn't buy LPI's "adult" Specialty Pubs division, though it's unlikely that was based on content since the pay-TV network shows similar content. Those who know LPI well say that Specialty Pubs was long the profit center for the company, but magazines like Men and Freshmen have suffered from online competition as well. But since the LPI that Planet Out purchases is not the same LPI it sold, it's difficult to say how steep a haircut PlanetOut took on the pricetag.
That mystery is compounded by the unusual structure of the deal, which involves the payment of the $6 million as pre-paid advertising to be spent by March 2009. Here will also be assuming the liabilities of LPI as well.
The sale of LPI could be seen as an important part of CEO Karen Magee's effort to refocus San Francisco-based PlanetOut on its core online business, including the sale last fall of the RSVP Vacations gay cruise company to competitor Atlantis Events. It's interesting to see Here moving in the opposite direction, expanding from on-demand TV to print media with an online component.
Time will tell which company is making the right bet financially, or whether PlanetOut is simply selling off its old media division on the way to making itself more attractive for a buyout -- something the company announced in January it was seeking. News of the sale improved PlanetOut stock price, up 18 cents (7.9 percent) to $2.45, a split-adjusted price.
For a quick history of PlanetOut and LPI, follow the jump:
January 22, 2008
Economic Panic: Good or Bad for Gays?
Posted by: Kevin
This morning, there is a palpable sense of panic across all the world's financial markets. It can't be ignored by anyone. Certainly, if you're an investor, a homeowner or you own a business, it's likely you're already hurting. But from a purely political sense, is the economic crisis good or bad for gay issues in this election season? Does it factor in at all?
Strangely enough, at first glance seems that economic downturns have been good for gays in recent election campaigns, while booming economic times have been largely bad.
It's conventional wisdom that when people are worried about their jobs or their pocketbooks, they don't really want to hear about homosexuals, abortions or the ACLU. Blaming gays or abortionists for the loss of one's job just doesn't wash, but someone who comes across as the one who cares the most about your job loss will get room to be nice to other people, even the gays. In boom times, when the average voter is content and fairly disinterested in voting, both sides tend to throw cultural bombs to turn out their bases in a zero-sum game. That's when the pitchforks tend to come out for us.
The 1992 presidential campaign was seminal for gay rights as a national campaign issue, at least where gays were at once condemned and courted. The U.S. economy was lurching into a recession as the primaries began that year, which launched the populist campaign of Pat Buchanan through his crushing defeat of incumbent President George H.W. Bush in New Hampshire. Polling showed that Buchanan's harsh, angry economic message pitched to those most harmed by the economic downturn helped fuel his victory there, and built a national sense of resentment against Bush. However, when that message expanded into lurid far right cultural attacks on gays, 'feminists', immigrants and pro-choice voters, it ran out of steam with the general public. The momentum of Buchanan's insurgency culminated at the horrendously anti-gay 1992 Republican National Convention, which the GOP never recovered from.
As the economy worsened, Bill Clinton and Ross Perot seized the middle ground and captured the public's concern with economic visions for change. Clinton ultimately connected with the middle on their economic fears ("it's the economy, stupid"), which gave him room to make an unprecedented play for gays, making a list of promises unheard of by a leading presidential candidate in history. By all accounts, Clinton won that election on the basis of earning the trust of a nation worried about its wallet. The gays, in political terms, won along with him.
From March 2000 to October 2002, the dot-com crash shook the world economy. It didn't have the same impact on average Americans the way the '92 recession did (or the current mortgage meltdown has), but it hit dynamic tech sectors very hard and raised fears about the long-term solvency of Social Security as the baby boom generation began to age. There was a budget surplus and plenty of room for the nation to maneuver. In the end, both sides were faced with making the argument as to who was better at making those maneuvers against the looming end to good economic times.
It boiled down to "who do you trust?" and "who is the better leader?", factors that see-sawed all year between the two. And it devolved into a war over the favor of independent voters. This meant both Al Gore and George W. Bush had to blur and bland-out anything that independents would view as "sharp edges."
Gore boldly chose conservative (then-) Democratic Senator Joe Lieberman as his running mate. Bush, the "compassionate conservative", took hits nationally for going too far to the right in South Carolina in his struggle to eliminate insurgent Senator John McCain; weeks later, Bush met with gay Republicans and said he was "a better person" for it. Both parties had openly gay speakers at their conventions in prime time (Elizabeth Birch for the Democrats, Congressman Jim Kolbe (R-AZ) for the GOP). Meanwhile, an anti-gay third-party campaign by a diminished Pat Buchanan fell completely flat.
Critics will argue that neither the 1992 or 2000 elections resulted in a sea-change of positive federal legislation for gay Americans. In fact, the Clinton presidency brought openly gay appointments, the first White House gay liaison (who was straight), pride day proclamations and favorable speeches, but it also brought "don't ask, don't tell" and the Defense of Marriage Act. Bush's presidency brought the first (two) openly gay national AIDS directors at the White House, a historic global program to fight HIV/AIDS, the first federal anti-gay hate crimes prosecution case (which was later dropped for lack of evidence), as well as its own smaller list of gay appointees. But Bush's presidency also launched the Federal Marriage Amendment to the top of the agenda, creating a cataclysmic split with gay Republicans and setting off an ugly campaign of "outing" closeted gays that (so far has) ended the political careers of two Members of Congress and soon a U.S. Senator. Both presidents also lost majorities in Congress they enjoyed early in their terms.
So what might the current economic crisis do for gays? Follow the jump for more…
January 15, 2008
Soon to be no PlanetOut?
Posted by: Chris
The last we heard from the troubled gay media conglomerate PlanetOut, the news seemed mostly positive. The company's RSVP Vacations unit, which had been bleeding cash for months, was successfully sold off to competitor Atlantis Events. A cash infusion of $26.2 million had paid off looming creditors, and among the angels had been a certain Bill Gates of Microsoft fame.
But even as the Bay Area Reporter was reporting the "good news" two months ago, the company's stock was again taking a nosedive, perhaps anticipating another poor quarterly earnings report or perhaps because some larger investors saw the opportunity to cash out while they could.
Today, the San Francisco-based company announced it was suspending earnings forecasts and investor calls and has hired a consulting firm to help it find potential buyers. That could mean the company that brings us Gay.com, the Advocate, Out, Allyson Books and much much more could be gobbled up by a bigger (non-gay) fish, rescued again by a new set of investors or sold off in pieces.
If the latter happens, it would seem to signal the failure of a grand experiment, pooling the assets of some of the gay media's marquee names with the hope of creating through synergy something bigger and better than the sum of its parts. I know something about that sort of experiment.
Mergers in the gay media have stirred plenty of criticism, some justified but much of it uninformed. When the Advocate's publisher LPI bought Out Magazine, for example, the two magazines were put under the same editorial director Judy Weider and became essentially carbon copies of one another -- a problem that PlanetOut addressed and corrected with a publisher/editor shuffle last year.
During the dot.com heyday, PlanetOut seemed a bit too eager to spend it cash reserves on smaller gay companies when it wasn't entirely clear how the pieces of the company puzzle would fit together. The RSVP purchase practically sank the mother ship, partly due to some fluke logistical problems but also because it never really made sense for a media firm to own a cruise promotions company.
Even if PlanetOut is cut into smaller pieces, the real culprit won't be gay merger mania. The dot.com industry changed in ways few foresaw, and competing sites offered many of the same services that Gay.com members had been paying for. Even today, specialty media companies are struggling to adapt to new media, especially if management is old-media schooled.
Social networking sites remain a hot commodity, but like so much of the internet market, figuring out how to turn great ideas into a reliable revenue stream has proven a very tricky business indeed.
It's very unfortunate to hear this latest news from PlanetOut because the company seemed to be doing many of the things it needed to do to turn things around. This is one experiment I'm still hoping works out for all concerned.
January 06, 2008
GNW Pick: Madison Ave. goes gay for pay
Posted by: Chris
- QUICK LOOK: With a median household income of $83,000âand, typically, no tots to spend it onâAmerican homosexuals are a marketer's dream. Last year, more than 180 Fortune 500 companies hawked their wares in gay publications. Skittish brands targeted ...(MORE)
Radar Magazine offers a rather humorous look at what the ad industry thinks will tickle the fancy of gay consumer. Subtle works best; but take a look at some of the least subtle entries in the Radar gallery:
That's an underwear ad, by the way -- too racy even for Times Square.
More hilarity follows after the jump--->
July 02, 2007
PlanetOut finds cash just in time
Posted by: Chris
Correction: In my original post, I indicated the price per share paid by these new investors was 86 cents, but Barrons reports that the price was based on last Thursday's close -- still a discount but much less than I suggested.
The first business day after a June 30 deadline to come up with $7 million for creditors, PlanetOut managed to find three-times that amount, announcing the sale of $22.6 million in common stock to several private equity funds.
The details are here in the Gay News Watch report, but the company's cash salvation came at a heavily discounted price. Today's sale was set according to the closing stock price last Thursday, June 28, according to PlanetOut CFO Dan Miller. That price represents a fraction of where the stock stood as recently as January ($4.50) and its high the last 52 weeks ($7.95).
Even though the funds raised today are enough to meet the company's current financing deadline, as well as a second deadline of $8.5 million by the end of 2007, I expect PlanetOut will go forward with plans to sell SpecPub, which publishes soft-porn magazines like Men (formerly Advocate Men), Freshmen, 2X and Unzipped (formerly Advocate Men Classifieds).
On the one hand, SpecPub is one of PlanetOut's few profitable divisions amid a sea or red ink from Gay.com, PlanetOut.com, the Advocate, Out and (especially) RSVP Vacations. On the other hand, the company's president and CFO have said the adult business isn't a good "fit" with the rest of the company — has no one else seen all the X-rated profile pics on Gay.com? — which is probably code for caving in to national advertisers like Lexis who've said they won't buy into the Advocate and Out so long as SpecPub is part of the PlanetOut family.
More than anything else, the announcement today gives PlanetOut management a bit of breathing room to work through the problems plaguing the company and set it on a path to profitability. That may mean selling off RSVP as well, since the gay cruise company is an unlikely fit with the company's other media holdings.
Still, the biggest challenge PlanetOut faces isn't unique at all to the gay media company. Biweekly and monthly magazine titles like the Advocate and Out are facing massive competition from the Internet, which makes any attempt at news look stale by the time these publications hit the stands. What's more, Gay.com's dependence on paid-personals faces an even more direct challenge from sites like MySpace, Friendster, BigMuscle and RealJock that offer the same services for free.
The company refused to tell even its own reporter how sales are looking in the second quarter, so that information will come sometime in the next few weeks. But for today, at least, PlanetOut is back on more solid financial footing.
Click here for a complete news summary on PlanetOut, compiled by Gay News Watch.
May 30, 2007
My big gay announcement
Posted by: Chris
I have an announcement to share with those of you who've been nice enough to visit and contribute to my blog these last months. You've been wonderful and loyal and charming and, well…there's someone else. Yes, I've been cheating on you, for weeks really, and "the other man" is a new website, Gay News Watch.
After leaving the Washington Blade and Window Media last fall, I spent a good deal of time thinking about what's next step for media generally, and of course gay media in particular. I decided there was a real need for "one stop" that tailors news and views to each person.
The idea is by no means original to me, of course. If you want to know what stories have a "buzz" in the MSM, you go to Drudge Report. If you want to know what general-interest stories have a groundswell of interest on the Net, you go to Digg. But where's a poor homosexual to head? You guessed it. Gay News Watch.
There you'll find all the latest gay news and views from the MSM, the gay press and the blogosphere, but that's just the beginning. Gay News Watch is set up to tailor the way you view the news to your interests. For instance, you can:
- View articles by the state, country or region of the world that interests you.
- View which articles are the most popular or rated the highest by other visitors.
- View articles according to the categories — politics, crime, lesbian, sports sex, "weird" etc. — of interest to you.
- If you register, you can even set the site to give you a "custom view" every time you visit, showing only the types of stories, or articles from the geographic areas that interest you. Not bad eh?
- Follow ongoing stories by seeing all the headlines, blog posts, viewpoints and comments conveniently grouped together. Interested in the controversy over Isaiah Washington using the "F*word"? Click here. Want to follow how gay issues are playing out in the presidential race? Click here. Pretty nifty huh?
- You can sign up for email alerts that let you know — instantly, daily or weekly — when new stories in the categories and/or regions of interest to you get posted.
- You can even sign up for email alerts to find out right away when a new story is posted about an ongoing controversy or story subject.
- Know about a story or blog post or op-ed that isn't on the site? Submit it with a few clicks of the mouse, either anonymously or not.
That's really just the tip of the iceberg. Rather than blab on more about it here, just visit the site for yourself, take a few minutes to surf around using the navigation bars on the left and the right. Let me know what you think!
If you like the site, then please bookmark it and visit often. Let your friends know about it. If you have a blog or your own web site, then please link to it. All the good stuff that makes a fledgling web site grow.
Last, but not least, I want to thank some folks who were very important to making Gay News Watch happen. Since I haven't asked in advance to broadcast your involvement on here, I'll just say you know who you are.
Two sets of folks, however, were absolutely critical: Douglas Blocker, the brilliant (and I mean that) programmer who worked with me to design the system, and Matt, Chris and Austin at Virtual Atlantic, the company that executed the design of the site. I put this idea in their hands, and they came through amazingly, along the way putting up with my somewhat exacting demands. (Those of you unfortunate enough to work with me through the years can no doubt feel their pain).
Because some have asked since the press release launching the site went out yesterday, I'll reiterate that Gay News Watch is my baby. I'm still an owner of Window Media, but this project is completely independent. Of course I'll be posting many articles from the publications in Window Media's family because my former colleagues (and those who've arrived since) continue to do important journalism that deserves the widest possible audience. That's true of many other gay publications as well, and I hope Gay News Watch will offer a venue for them to compete for attention with "the big boys" in the MSM.
So enjoy, and enjoy often, and thank you in advance for the contributions you can make — through comments, ratings, submissions and links or just visiting — to realizing my hopes for Gay News Watch.
May 22, 2007
PlanetOut free-fall watch
Posted by: Chris
TWO UPDATES: At the end of the post.
It's been just seven business days since I last posted about the free-fall in share price for Planet Out, Inc., and in that time it has dropped to a close yesterday of 98 cents, a loss of one-third the company's value in that short time.
Eric Savitz, who blogs for Barrons, pointed out yesterday that most of the damage came in the last two trading days:
PlanetOut (LGBT), which fell 20% on Friday, is down another 13% today, and still no updates from the company on its financial situation. The company, which provides web sites, print publications and travel services for the gay and lesbian market, has been more or less in free fall since reporting disappointing financial results earlier this month. The company is running low on cash, and has hired Allen & Co. to consider strategic options.
PlanetOut shares are down 15 cents today to $1, a decline of 13%. The shares are now down 78% for the year to date, 60% since its earnings report earlier this month and 31% over the last two days.
Savitz, who has been tracking PlanetOut's problems, reports that he was promised an interview with someone in the company's management, so perhaps the most recent serious decline will be explained soon.
In what is perhaps a telling display of the company's lack of focus, Magee told investors and reporters in a May 9 conference call that PlanetOut will sell off one of its few profitable divisions, the soft-porn magazine titles owned by LPI's Specialty Publications, in an effort to raise cash. Specialty publishes Unzipped, Men (formerly Advocate Men) and Freshmen magazines.
"It is a profitable one for us," Magee is quoted as saying about Specialty on the call, according to the Bay Area Reporter. "With that said, the adult business does not fit going forward with our other media properties."
As far as I can tell, one danger not immediately faced by the first gay company ever traded publicly in the U.S. is being delisted by Nasdaq. The stock exchange does require stocks to trade above a price of $1 per share, because below that amount even changes of a few cents represents a dramatic change in value. But the price must trade below $1 for 30 days and even then, the company is given 90 days to recover.
Still, an earlier post on Barrons, Savitz lays out the quandry raised by PlanetOut's impending cash crunch:
[Magee] said the company will require a capital raise or strategic transaction in the coming months. [JMP Securities analyst William] Morrison has some advice for potential investors: Don’t do it. “We continue to recommend that investors refrain from putting new capital to work in LGBT until we see evidence that its turnaround plan is working and the company raises additional capital.”
FIRST UPDATE: Barron's Eric Savitz is even more of a night owl than I am. In a blog post at 1:42 a.m. this morning, he relates the substance of his interview with PlanetOut's CFO:
In an interview Monday, PlanetOut CFO Dan Miller said the deep slide of the company’s stock … likely reflects sales by 1 or more of the company’s largest shareholders, rather than any specific new developments in its financial situation. It also may reflect the anticipated massive dilution from a capital raise of the size it has promised to seek.
Miller says the company is “moving as quickly as we can” to solve its financial issues. If it can’t find a way to raise additional funds, he says, PlanetOut “would be forced to approach the lender and work with them on what is best for all parties.” One possibility is that they would trigger a default on the debt. …
Miller notes that the company’s Gay.com URL is “incredibly valuable.” That may be true; what’s not clear is whether the company can raise enough cash to avoid having the site and the rest of PlanetOut’s assets sold off in a Chapter 11 fire sale.
As I post this update at 1:30 p.m. (Eastern time), LGBT is trading at 92 cents, a slight rally from a new record low price per share of 86 cents in early trading this morning.
SECOND UPDATE: The PlanetOut rally continued off and on until the closing of trading today, when the price per share was at $1.11, a 13 cent rise from yesterday's closing price of 98 cents. That small increase also represents a 13% increase in the stock value of the company in one day, demonstrating how volatile the stock can be when the price per share is so low.
Still, the news could be much worse. At least some investor(s) decided in the early afternoon that the record low represented an opportunity to buy PlanetOut stock at bargain basement prices and had enough confidence in the company as an ongoing concern to pony up. But if the analysts are right, it will take decisive action from management, and response from the financial community, for PlanetOut to truly rally.
May 10, 2007
PlanetOut going down?
Posted by: Chris
The stock price of Planet Out is reeling today from news yesterday of weaker than reported sales for the first quarter and a net loss of $6.6 million for the same period. The stock began the day at $2.25, already an all-time low for the company, which trades under the symbol LGBT on the Nasdaq. In the first 20 minutes or so of trading, the price had plummeted to $1.45 per share.
As I post, the stock has rallied a bit, to $1.62 per share — but still a loss of more than one-third its value just since yesterday's closing price. To put that in perspective, Planet Out was trading at $15 per share as recently as January 2005, and even $10 a year ago. The price began the year at $4.50 but had dropped to $2.49 per share by the end of the day yesterday.
Hopefully, the rally will hold. Whatever you think of PlanetOut and its shifting focus and publishing standards at the Advocate and Out magazines, the failure of the first-ever publicly traded gay business would be a blow to others who hope to repeat PlanetOut's early success.
Its two marquee print titles have already shown marked improvement under new editors since the departure of corporate editorial director Judy Weider. PlanetOut has already survived the dot-com bust; it would be a shame if it petered out now.
May 09, 2007
PlanetOut confirms sales fears
Posted by: Chris
Gay media company PlanetOut, Inc., announced disappointing first
quarter sales results today, sending the stock price plummeting to near
record lows. The company, which trades on the NASDAQ exchange with the symbol LGBT, took in a total of $16.8 million in revenue so
far this year, down 5 percent from the same period in 2006.
Still, company CEO Karen Magee tried to sound a positive note. "We are taking some major steps to generate the healthy revenue growth and solid earnings performance that we believe this company is capable of producing," Magee said in a press release issued today. "To complete that work and regain the confidence of the market will take time."
Online and print ad sales for the media conglomerate were steady at $5.3 million, but subscription sales fell from $6.3 million in the first quarter last year to only $5.6 million this time around. Overall, the company suffered a net loss for the quarter of $6.6 million, after breaking even over the first quarter in 2006.
Critics have complained PlanetOut lacks focus because its properties are too far flung, from Gay.com and PlanetOut.com online, to print publications the Advocate, Out and Out Traveler, to the RSVP gay cruise line. I'm not surprised at the drop in subscription revenue. With more and more popular social networking sites out there that don't require membership fees — MySpace, Friendster, Orkut, Connexion, Gaydar, BigMuscle etc — fewer will be willing to pay for the same thing at Gay.com.
Magee suggested the attempt to find focus was an ongoing process at PlanetOut. "The tremendous promise represented by our businesses and the market, we believe, is as solid as ever," said Magee, who took over as CEO last June from longtime chief Lowell Selvin.
"But without question, our business model is in transition. We need to identify the areas with the most significant growth prospects for us, be clear about our objectives, and streamline the rest of our business to enable us to focus our resources and talent on those opportunities which we believe will return the most value to our shareholders."
Wall Street may be tough to convince. PlanetOut's stock price has already dropped from $15 per share in January 2005, to $10 as recently as a year ago. The price began the year at $4.50 but was trading at $2.49 per share at the end of the day today, down 5 cents for the day.
April 25, 2007
More bad news from Planet Out
Posted by: Chris
This just in, more bad news about Planet Out from the San Francisco Business Times:
Media company PlanetOut Inc. said Wednesday that it expects revenue from the first quarter ended March to be between $16 million and $17 million. Analysts had expected an average of $18.59 million.
The San Francisco company (NASDAQ: LGBT), which focuses on the lesbian, gay, bisexual and transgender communities, said greater than expected discounts on a Caribbean cruise package hurt its results, as did poor sales online and in print.
The news is likely to be poorly received on Wall Street, although the PlanetOut stock does not have much further to fall, having already dropped from $15 per share in January 2005, to $10 as recently as a year ago, to trading at $3.05 today, down another 15 cents since last Friday.
As if to rub salt in the wound, among the reasons given for the shortfall was $600,000 paid out to Jeffrey Soukup, who quit as president and COO earlier this month. The collapse of PlanetOut would be devastating to gay media generally, given holdings that include not just the websites Gay.com and PlanetOut, but the Advocate, Out and RSVP vacations.
April 21, 2007
Planet Out in a nosedive?
Posted by: Chris
They may snipe like silly schoolgirls, but the bitter queens at Queerty manage a few scoops now and then. This week, they reported on the continued decline in the stock price of Planet Out, Inc., which runs Gay.com, PlanetOut.com, the Advocate and Out magazines and RSVP cruises, among other gay ventures.
Like many dot.com ventures, PlanetOut has always struggled financially, and has made some wrong turns along the way to building the world's largest gay media conglomerate. Just how bad are things now? Queerty asked John Carney of Dealbreaker.com:
PlanetOut has a chart that's almost painful to look at. It's slid from highs a couple of years back around twelve bucks down to Vonage territory. The company has been chopped-down by Wall Street analysts, who have noted declining revenues from ads and travel biz. Mounting debt and insider sale last year probably don't help. It's not clear what the companies core business is. Is it a publishing company? A travel site? A web 2.0 portal? Investors don't like companies when they can't tell what it's supposed to be doing.
To make matters worse, at start of the year PlanetOut adopted a "Shareholder's Rights Plan" which is the phrase companies use to describe something better known as a poison pill. Basically, it's a device that prevents an outside shareholder from acquiring the company without the consent of the insiders. These things hold down stock prices because they make acquisitions less likely and discourage outsiders from acquiring substantial portions of the company. No one has ever successfully swallowed a poison pill.
Observers and critics have been predicting PlanetOut's demise for years now, and yet the company has managed to persevere and even grow despite all the doomsaying. I know something about the risks and responsibilities that gay entrepreneurs face when combining gay media with a long history of serving our community and the gay rights movement. I know that Lowell Selvin, who played a central role at PlanetOut until he resigned as CEO for medical reasons last year, shared that commitment.
But now Selvin is gone, and another key player, COO and president Jeffrey Soukup, resigned two weeks ago. Karen Magee, who took Selvin's place as CEO last June, hasn't yet managed to right the ship. In fact, from a stock price high of almost $15 in January 2005, and $10 as recently as a year ago, PlanetOut is now trading at $3.20.
Queerty posted again about PlanetOut on Thursday, with a breathless headline that "PLANETOUT IS TOTALLY CORRUPT" due to "insider trading." The basis for the claim was this link to an SEC filing that shows a number of top PlanetOut officials, especially former president Mark Elderkin, sold off a large number of shares last year. Queerty complains that the filing, called "LGBT Insider Trading" because "LGBT" is PlanetOut's stock symbol on the Nasdaq exchange, reflects poorly on all gay people.
Of course there's nothing inherently wrong with "insiders" buying, owning or selling their shares, unless they're doing so based on inside information unavailable to the public. The SEC filing is there to alert other investors about just what top execs and board members are doing with their shares because they know the company better than anyone. In the case of Elderkin, the original Gay.com founder left the company in 2006, so the sell-off coincided with his own departure. Hardly evidence PlanetOut is "totally corrupt."
Still, those interested in the future of gay media should mark their calendars for May 9, when PlanetOut will announce financial results from the first quarter of 2007.
December 07, 2006
Fortune's look at Queer Inc.
Posted by: Chris
Pick up the latest issue of Fortune magazine for a whole slew of articles bearing good news about gays and big business in the U.S of A. Among the highlights available online:
- "Queer Inc.: How Corporate America fell in love with gays and lesbians. It's a movement."
- "Courting the gay consumer: Marketers tailor ads to brand-savvy gay customers"
- "Gay-friendly companies reach out to MBAs"
- "Bringing gay media out of the closet": the Logo story
- "Wal-Mart becomes gay-friendly"
- "ExxonMobil's gay problem"
Besides the sheer volume of reporting here, most of it by senior Fortune writer Marc Gunther, the most surprising take-away is how overwhelmingly good the news is. Reading vignette after vignette about how well gay employees are being treated by their Fortune 500 employers, it's almost jarring to come across anything less than fully supportive. Like this example from Gunther's story about how gay employee groups have transformed the corporate workplace for gay Americans:
These gay networks customarily meet in company facilities, use the company intranet, and receive financial support. Some get more respect than others. Jeff Immelt, the CEO of General Electric, makes it a point to clear his calendar each year for the annual gatherings of the African American and women's networks at GE, but he has never met with the GLBT group. That's caused some bad feelings.
Does anyone doubt after that bit of nasty press that Immelt will be finding time on his schedule in the near-future to sit down with the GLBT group at G.E.? Not to mention Gunther's column about ExxonMobil, which begins provocatively enough:
Does ExxonMobil have a problem with gay people? While much of corporate America has embraced gay rights — by promising not to discriminate against gay workers and offering domestic partner benefits — the world's largest oil company has steadfastly resisted pressures to become more gay-friendly.
Gunter goes on to note, among other things, that every other Fortune 100 company but one (Plains All American Pipeline, an energy firm in Houston) has adopted a written non-discrimination policy that includes sexual orientation, and 78 of the Fortune 100 offer health benefits to same-sex domestic partners, including ExxonMobil competitors BP, Chevron and Shell. He concludes just as provocatively:
Exxon says in its proxy statement that the company "has zero-tolerance discrimination and harassment policies that are comprehensive in nature, rigorously enforced, and applicable to all employees." It goes on to say that those policies prohibit "discrimination or harassment for any reason, including sexual orientation."
You've got to wonder. If ExxonMobil will tell its shareholders that it opposes discrimination on the basis of sexual orientation, why won't it put that into its employment policy to tell its workers the same thing?
In such a large report, it's not surprising that there are a few points worth quibbling over. In "Queer Inc.," Gunther quotes an anti-gay activist who claims they called of a (ridiculous) boycott of Tide, Crest and other Proctor & Gamble products because of alleged private promises that P&G has "quietly backed away from promoting homosexuality" (as if they ever did such a thing).
But Gunther allows that the activist "may be right" because P&G's score on the Corporate Equality Index compiled by the Human Rights Campaign "has dropped in recent years." The real reason for that isn't a reversal by P&G on any previous gay-friendly stance, but because HRC (understandably) raises the bar every year to pressure further improvements in the workplace. In recent years, many of those changes in the Index ratings have been in the controversial area of treatment of transgender workers, which most likely accounts for P&G's falling score.
In Gunther's paean to MTV's Logo channel, he swallows what he likely heard from some P.R. flack that there was no mainstream advertising in gay media before the cable channel's debut last year:
Before [Logo] came along, gay media was dominated by free local newspapers that were mostly financed by personal ads, by Web sites and AOL chat rooms where users could remain anonymous, by a pay TV network called Here! that viewers had to invite into their homes, and by The Advocate, a 37-year-old national magazine that even today arrives in a black envelope.
Huh? The local gay press hasn't received a significant portion of its revenue (much less a majority) from personal ads in at least a dozen years, when the Internet gobbled up that arena. The majority of ad dollars in local gay papers like the ones I edited have come from "mainstream" (as in "non-gay") businesses, including big business, for at least a decade.
And while the Advocate and (ironically) Out magazine, like competitors Genre and Instinct, are still distributed in covered envelopes, they broke the ground on national ads from brand-conscious corporations long before MTV and Viacom got into the game. Logo's success can be trumpeted without diminishing the real yeoman's work that came before.
Still, all in all, Fortune did an impressive job of charting the course gays have taken in corporate America. In his blog, Gunther offers up the conclusion he reached after completing the work behind the arsenal of stories:
I learned a lot reporting this story, met some great people, and came away with this thought–that this is one of those rare areas (the environment, in some respects, is another, although that’s more complicated) where big business is leading the rest of America in a progressive direction. As business becomes more gay-friendly, more people will come out at work. As more people come out, their co-workers will become more tolerant and empathetic.
It's a familiar point that doesn't lose its power with time. It also ought to be the clarion call for gays everywhere that our fate remains, as always, very much in our own hands. As for whether big business is truly out front of "the rest of America" on being gay-friendly, I think Gunther overstates the case.
Polls have shown a strong majority of Americans have for years backed workplace protections, domestic partner benefits, and even legal recognition for gay couples up to the level of civil unions that are marriage in all but the name. Big business isn't ahead of the rest of America so much as the politicians in Washington are behind. Time will tell if the changes on Capitol Hill in January redress that gap.
