Pioneering is seldom easy and online magazine Slate has taken its share of knocks beginning with the open doubt that Microsoft and independent journalism could ever be synonymous.
Founded by Michael Kinsley in 1996, Slate is as firmly established as an Internet publication can be. It boasts of 4-million-plus unique users a month (thank you very much, MSN), solid -- although sometimes overly snarky -- writing and a stable of successful recurring features. There?s just one teensy problem: The profitability that literally was just around the corner back in September 2000 has yet to materialize.
Former publisher Scott Moore says he can pinpoint the exact week the market turned negative the third week in September 2000. ?That?s when basically the bubble totally burst. Three or four major deals cratered, and we went from being right on the cusp of having a profitable quarter to a pullback.?
Today, as general manager of the MSN News and Information Division, Moore uses that story to underscore his refusal to predict when profitability might move from mirage to reality. At the same time, like their compatriots across the Web, Moore and new Slate publisher Cyrus Krohn are pushing as many buttons as they can to switch the color in their Excel spreadsheets from red to black. And, like the others, they have to accomplish the task without damaging the core values that bring users in now. Push too hard and they may drive away some of the very users the luxury car makers and others are signing up to reach. In the media kit, Slate defines that audience as ?highly educated, influential, technology-savvy decision makers.?
One initiative will create additional departments of coverage for Slate, which has been known for political writing and opinion. Under new editor Jacob Weisberg, the site has already broadened its cultural reach by adding a television writer and emphasizing stories like a recent take on bad Hollywood moms. This week marks the debut of ?Well Traveled? edited by Richard Bangs, who created the now-defunct first-person adventure travel site Mungo Park. Moore says three ?blue-chip advertisers? he can?t identify publicly yet have already committed more than $1 million to sponsor Slate?s adventure travel feature for the next year.
When ideas for other departments were being tossed around, Krohn says he voted for the editorial features he thought were most saleable -- technology and fashion. ?We brought up a lot of different ideas that we?ll venture into editorially. Food, gardening ... obviously all have their own advertising affinity.? As eager as he is to sell, Krohn insists he?s sensitive to the editorial side. ?I came from the editorial side. I used to be the managing editor. If there are sensitivities at play, I?m more likely to think of these things.?
The new departments or features were among the hot topics at last month?s annual staff retreat. The cast was roughly the same as the previous year but some of the roles had shifted considerably. Krohn?s promotion to publisher from associate publisher was announced as the retreat began and it was editor Jacob Weisberg?s first retreat as founding editor Michael Kinsley?s successor. It could have been the modern equivalent of the James Thurber cartoon where the first wife crouches on a bookcase but Kinsley and Moore are still very much part of the mix; in fact, as the head of the MSN News and Information division, Moore is responsible not only for Slate but for MSNBC as well. Last week, his MSNBC duties expanded with the departure of general manager Ona Karasa, who followed MSNBC?s founding editor-in-chief Merrill Brown through a still-swinging door. That leaves MSNBC with an acting editor-in-chief, Michael Silberman, and a fill-in general manager, Moore.
It?s a different picture at Slate, where the successors to Moore and Kinsley came from within -- Weisberg after an oddly public ?bake-off? with Jack Shafer, deputy editor of Slate. Krohn has been at Slate since the beginning, starting as the first managing editor with Kinsley and eventually moving over to the publishing side or ?the dark side,? as Moore jokingly referred to it in his announcement. Moore says the internal promotions at Slate were deserved ?because Slate has really had a terrific run over the past few years. They ought to get a shot at moving up and spreading their wings.? He added: ?Sometimes there?s a risk if you have an organization that?s really found its stride and you bring someone in from outside. You really risk ruining its chemistry.?
Knowing Moore?s relationship to both Slate and MSNBC, it?s difficult not to read between the lines. It may not be fair but it?s tough to avoid the notion that Moore thinks Slate is a more successful operation than MSNBC.
The profit picture includes more than advertising for Krohn. ?The thing that I always revert back to when I think about why I?m at Slate and doing what I?m doing is Michael always felt the economics of print publishing were flawed.... I want to fulfill that belief that Michael had early on. He wanted to prove an online publication could be more efficient.?
Krohn adds, ?We are a staff of 33 people and we?re publishing a heck of a lot more than Time or Newsweek with a lot more employees.? Krohn isn?t shy about predicting profitability, although he avoids being judged on pinpoint accuracy by suggesting 18-24 months as the timeline.
Efficiency alone won?t cut it. ?We?ve really been trying to push the envelope within MSN to provide new ad units,? he says, citing one variation that pops up ads for goods or services that match an editorial subject (a potentially hazardous practice) and another that sent a Saturn whizzing across the screen. An insert in the e-mail version of ?Today?s Papers? -- still valuable even though it lacks the verve founding columnist Scott Shuger brought to it -- runs $20,000 a week and reaches 100,000 subscribers a day.
Both Moore and Krohn say they can see an uptick in advertising. Says Moore: ?The great news is we?ve gotten all of that sort of dot.com drug money out of the system so that all of the deals we?ve got now are clean. We?re not only increasing in terms of dollars but in the number of advertisers.?
Unlike publicly owned Salon, the site Slate has been paired with since birth whether it makes sense or not, Slate doesn?t have to break out its financials. There aren?t SEC filings about having enough money to get through the quarter. So far, Microsoft has had the patience to wait it out, unlike other companies who played dump and run when it became clear that success did not always equal profit. That doesn?t mean Bill Gates and company will keep making up the difference indefinitely, but it provides Slate with the kind of leeway many of its competitors for readers don?t have.
The rest of the world may see them as rivals but Weisberg insists he doesn?t see Salon as a competitor. ?We don?t really think of it that way. We?re a very different kind of magazine.? Referring to Salon?s premium subscription offer, he added: ?They?ve decided to make a mistake we made three years ago (when Slate charged for content). I think it?ll be a shame if they close up.?
Krohn contends Slate doesn?t just take money -- it adds value to Microsoft. ?Take Slate?s value outside of Microsoft and look at Slate?s value within MSN. Slate has some of the strongest demographics on the network. As MSN begins to evolve in the advertising space, Slate becomes of great importance to them because we have an audience analogous to an audience in the print world.?
Slate is prominently featured on MSN; in fact, in the current design, it?s the only service mentioned under News in the MSN Channels bar, although clicking on news sends the user to a page on the MSNBC site. ?They drive a lot of traffic to us. They?re featuring our content more prominently,? says Weisberg. ?What we?re adding is real readers who come back.?
Where half-sibling MSNBC is the child of two very different parents -- General Electric?s NBC News and Microsoft -- Slate comes from a single-parent household. ?I don?t really feel our identity is comprised in any way,? Weisberg says. ?As a publication, editorially we are independent and distinct.?
Moore wants Slate and MSNBC to be better integrated with each other and within MSN. That doesn?t seem to faze Weisberg. Although Slate provides MSNBC with the backbone of its opinion section, Weisberg says ?the integration is not any kind of editorial integration. When there?s something they want that we don?t have they get it somewhere else.?
The two are teaming up on ad sales. Explains Krohn: ?We?re collaborating with each other because we both share a nertwork audience. We both have a consistent following. Our rate cards are comparable.?
As for dropping the subscription model (I was one of the roughly 26,000 paid subscribers and, yes, I subscribe to Salon), Moore calls it a ?huge boon to the business.? Approximately 200,000 unique visitors went to Slate.com in January 1999, the last paid month. This past May, the site drew an estimated 4.2 million unique users according to MediaMetrix, ?an enormous audience,? says Moore. The average visit is twice a month with an average length of about 9 minutes.
Audience size was another subject at the retreat. "We developed this mass audience and sort of woke up and had far more readers than we ever imagined," says Weisberg. The question was "should we continue to have audience growth as one of our chief goals and if we did that would it change us." Growth beat out maintaining status quo. "The feeling was our growth was important and really so far has not had much effect on our tone."
That growth means that Slate has a more diverse audience with varied interests. What Slate's "new" team does to serve that audience -- and to take advantage of it -- could mean the difference between profitability and continued losses. I just hope they remember they're running a boutique, not a department store.