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Thread: Gay.com running out of money?

  1. #1
    JustBryce
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    Gay.com running out of money?

    This is a sad bit of news. It's the first really "gay" publicly traded company and it looks like its being run straight into the ground...

    Cash crisis closing in on PlanetOut

    Owner of Gay.com, Advocate reports a dismal first quarter; seeks $15 million investment

    Verne Kopytoff, Chronicle Staff Writer
    Saturday, May 12, 2007

    After becoming the dominant media company for the gay community, PlanetOut Inc. is now just trying to survive. The San Francisco owner of Gay.com, along with the Advocate and Out magazines, disclosed this week that it will run out of money before the end of the year without an infusion of cash.

    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.

    A dismal first-quarter earnings report on Wednesday hammered the reality home. Virtually every piece of the business needs fixing, according to management.

    In the report, PlanetOut said it lost $6.9 million in its fiscal first quarter, compared with a $132,000 loss a year earlier. Revenue totaled $16.8 million, down from $17.6 million during the same period a year ago. Spooked by the results, investors sent PlanetOut's shares tumbling 33 percent over two days to close Friday at $1.64, the lowest point since the company's initial public offering three years ago.

    "This is deeply disappointing and concerning to me and the rest of the management team," Karen Magee, PlanetOut's chief executive officer, said in a conference call with analysts Wednesday. "We've got major work to do at PlanetOut to generate the healthy revenue growth and solid earnings performance that I believe this company is capable of producing." Magee, who joined the company in 2006, described the problems as years in the making. A turnaround, she said, will take up to 24 months, during which the company plans to fix creaky technology, reorganize and sell some assets, including its adult publishing business.

    Allen & Co., a consulting firm, has been hired to explore various options.

    PlanetOut is under the gun to come up with an additional $15 million to meet the terms of an existing loan, or face default.
    If it's unable to get the financing, the lender could foreclose on PlanetOut's assets, a potential death knell. The company, which had $11 million in cash and short-term investments at the end of the first quarter, said it would run out of money by year's end without additional financing.

    Magee laid part of the blame for PlanetOut's poor performance on its RSVP travel agency, which offers cruises to destinations such as the Caribbean. Passenger occupancy has been less than expected and, as a result, the company has had to offer steep discounts to attract travelers and pay penalties to cruise lines.

    Separately, PlanetOut's advertising sales, both online and in print, have been disappointing. Subscriptions to online personals have also lagged amid growing competition from other gay-oriented Web sites in addition to social networking giants MySpace and Facebook. In a note to investors, Richard Ingrassia, an analyst for Roth Capital Partners, said it's possible that PlanetOut would sell its travel business. Overall, he said, the company is still unchallenged in terms of reaching the gay demographic.


  2. #2
    Ah, 80 Hour Work Weeks, The American Dream! tombarr's Avatar
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    Yeah, this is sad news, but it was a long long time in the making.

    Companies sometimes lost sight of the original focus that got them to where
    they are until it's too late.

    We stopped advertising with them long ago because of the way they were forcing geo packages on us for our websites that had global target markets, and the geo targeted allowances and pricing made it a very unattractive package. With this in mind, it's no doubt they have lost ad revenue.

    I saw that they were already trying to spin off the spec pubs purchase they nade just a short while back... so it looks like they are trying to get back to their roots...

    If they were to become more of a social networking site it might make them once again a player....


  3. #3
    On the other hand.... You have different fingers
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    Long ago, we were interested in advertising on gay.com. I called one department (the one on their website), and they shuffled me to another department, who shuffled me to a third department, and then finally, after days of leaving messages, I finally called and reached someone who said that if we weren't interested in spending at least $15,000 a month to start, they weren't really interested in talking to us.

    I'm sure we're not the only people that happened to... and we decided a long time ago that when you have to chase after a company for the privilege of giving them your money, that's not who I want to be doing business with


  4. #4
    You do realize by 'gay' I mean a man who has sex with other men? IntenseCash.com's Avatar
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    That is sad news but like Tom says it has been a long time in the making. I also tried to advertise with them and their customer service was not very good. They could of made some small changes to their advertising and got a lot more income just from that.

    Mark
    * IntenseCash.com - If you can't convert us you better look for a new job!


  5. #5
    Ounique
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    I agree they lost focus.
    I contacted them multiple times.
    We had a meeting set up and they never showed up either.
    I gave up after that


  6. #6
    Ah, 80 Hour Work Weeks, The American Dream! tombarr's Avatar
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    wow, seems like gay.com would benefit greatly by coming down out of the clouds and putting their ear to the ground and listening to webmasters or potential advertisers a bit... perhaps they could have avoided much of this.


  7. #7
    Ounique
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    Quote Originally Posted by tombarr View Post
    wow, seems like gay.com would benefit greatly by coming down out of the clouds and putting their ear to the ground and listening to webmasters or potential advertisers a bit... perhaps they could have avoided much of this.
    You know it man.

    I mean when I go into a deal there's alot to deal with.
    I was seriously willing to be their slave to.

    Unlimited use of Video feeds and content. I was even going to offer money for banwith.

    yes as crazy as all this sounds.

    Oh well at least the brought me alot of olives with my martini


  8. #8
    full of grace! citiboyz's Avatar
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    Quote Originally Posted by IntenseCash.com View Post
    That is sad news but like Tom says it has been a long time in the making. I also tried to advertise with them and their customer service was not very good. They could of made some small changes to their advertising and got a lot more income just from that.
    Ditto. We found them impossible to deal with and finally quit trying.


  9. #9
    I said Cha Cha Heels... Black Ones!!!
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    We really wanted to advertise with them too. We called and finally got someone and the rates they wanted to charge were way out to lunch. They acted like they were the only place you can advertise and we should feel priviledged to advertise with them. I think if they took there heads out of there asses and lowered their rates to a more resonable amount they could do much better.


  10. #10
    On the other hand.... You have different fingers
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    Actually that is EXACTLY the attitude we got.

    Perhaps someone should point somebody at senior management for gay.com to this thread. I mean, I wouldn't advertise with them now because their traffic has gone to shit, but... maybe they could at least learn why they have no revenues.


  11. #11
    allboysvideo
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    You guys were lucky that you didn't get through...we got through and we decided to advertise with them a few years ago...it was a waste of money and time!

    You would imagine a very large & popular site along with a very strong presences in the gay community, we thought it would be a great idea to start advertising with gay.com due to this fact! Unfortunatley we were wrong and we wasted a lot of advertising dollars, we got such a bad taste regarding advertising that as of today, I'm very hesitant to advertise and very careful to which company I give our advertising dollars too.

    I regret what is happening to gay.com but they need to restructure there business plans and get back to reality!


  12. #12
    Dzinerbear
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    Did gay.com buy Out and The Advocate? Or did the company running those mags start gay.com?

    One of the things that strikes me is just because you know how to run a successful magazine doesn't mean you can run a successful website and visa versa.

    And I agree, they need to get over the fact that they are gay.com (we're big everyone wants to do business with us) and start listening to their customers. I can't tell you how many requests for information went unanswered. What a shame.

    Cheers
    Michael


  13. #13
    The Prince of Dorkness Jasun's Avatar
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    I agree... anyone who coudln't get through to them are the lucky ones.

    we bought some advertising space on there. we talked them down from a 6 month contract to a one month contract... we paid them $2400, and were awarded with 750 raw clicks, zero sales and a bit more Spam sent to our email addresses.

    I dropped into the "Chat room" they have. I spent about 5 minutes in there... I got about 20 PMs from Spambots that all said "Hi.. you seem cool.. I don't know how this site works, but I have a profile here... " and then it would link to Out personals or some other fly-by-night hook up site.

    I didnt' ever actually talk to a real person in their chat room.

    They didnt' seem to understand why I was pissed when "we sent you 750 customers." When I explained that we gave them over 2 bucks per raw click and that all we got back was probably Search Engine spiders, they seemed a little miffed that we were going to yank their contract.

    Yes, it's sad they they're going down.. but it's not because they're a gay company.. it's because they're a bunch of incompetant business people whos site sucks.

    Sites like Just Us Boys and Manhunt are greasing the floor with them because they offer what Planet Out and Gay.com can't... or won't... or hadn't thought of.
    Jasun Mark. Crass of the Titans.


  14. #14
    ffblueocean
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    Maybe it's time to think about outPersonals.com again?


  15. #15
    I said Cha Cha Heels... Black Ones!!!
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    Gay.com suffers fro the one thing that ALOT of Gay owned businesses suffer from. In most communities you have these Gay owned and Operated Bussineses. They always tout "We All MUST support the gay community". But when you shop or support these businesses, they usually charge you 20% more than everyone else does. I personally support ANY business based on 1 thing. Service!!! Gay.com has gotten Cocky, they even bought RSVP cruise line. What does a Magazine Publisher/Internet Company know about Cruises/Vacations. they bit off more than they can chew.


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