Salon I.P.O. Is Proof of New Adage: Editorial Doesn’t Go Public

Salon.com hit the ground–well, it just sort of hit the ground when it went public at last June 22. It was offered at $10.50, but by the end of the day it had fallen to $10.

The initial public offering of the Internet magazine company had long been derided by other journalists out of some combination of jealousy and professional propriety–as if a sudden payday just wasn’t supposed to be a part of a journalist doing the job. Certainly not in something as, well, as self-promoting and San Francisco as Salon .

But Salon.com had to go public. That’s what on-line companies do in San Francisco.

These days, though Salon describes itself as a continuously updated “network of 10 subject-specific, demographically targeted Web sites,” it’s at its heart still an electronic alternative weekly, just like … certain other papers. Only now it’s worth $107 million. Its editor and chairman, David Talbot, may one day be rich enough to buy that apartment in North Beach and that house in the wine country that he mused about to Wired last January. “I think that most people think that Nasdaq has to be some sort of vehicle for karma,” said Joey Anuff, editor in chief of Suck.com . “That some day they,” meaning the instant “dot-com” winners, “will get their just desserts.” Wired ‘s failed I.P.O. back in 1996 reinforced the idea that editorial doesn’t go public.

But Mr. Talbot’s 4 percent (valued at $4 million after the I.P.O.) is not going to be worth much compared to James Cramer’s 14 percent take from TheStreet.com , which was worth $95 million the day that Salon was offered. And the market valuation of the company is puny compared to other Silicon Valley offerings. “It’s sort of relative,” said Mr. Anuff. “Employee No. 200 at Yahoo is probably never going to be jealous of Employee No. 1 at Salon .”

Still, journalists have been getting rich for some time in San Francisco. Big “portals” like Excite and Yahoo Inc., which are worth far more than Salon would ever be, hired ex-editors to help put together their sites.

People like Todd Lappin, a former Wired editor who saw that I.P.O. go down, left after it was sold to Condé Nast and now is setting himself up as “editorial consultant” to Guru.com, which is a site that’s being launched to help freelancers. “From the journalist’s point of view,” he said, “you think, I’ve spent so much time reporting on it, why not try it out?” And, he said, “there’s lot of local pride out here,” for Salon , and it has done one thing that many on the Internet have been trying to do fervently: build a brand.

“In San Francisco,” said one West Coast Salon source, “you can’t walk two blocks without bumping into a multimillionaire … People doing a lot less important stuff than us, making a whole lot more money.”

“Talbot has a lot of ideas and every third one works,” said one person who dealt with him. The place moved quickly–sometimes too quickly. People felt left behind. Areas were added for buzz and for sponsorships. The site bloated. The offices became crowded. Lines of authority became blurred. Mr. Talbot himself couldn’t micromanage by charm anymore.

Instead, Mr. Talbot has been out selling the site, though often inaccurately when it came to fluffing its financials. His chief competitor, Slate editor Michael Kinsley, took a whack at him recently. “It’s insane that all these money losing organizations are going for these huge valuations,” he said, reflecting what is most often said in the press about Salon ‘s I.P.O. But don’t get the idea that Mr. Kinsley is bereft in the Web economy: Slate employees get Microsoft Corporation stock. After 13 years at Microsoft and one year at Slate , the site’s managing editor retired at 40, and its first program manager retired at 30 after eight years at Microsoft.

Somehow, Salon built a brand. Lacking in enough advertising or electronic commerce revenue to pay for its overhead, or some other futuristic revenue gimmick, “one of its big successes is recognizing and being a beneficiary of the fact that kind of splash-trash journalism makes incredibly good business,” said Mr. Anuff. Which is how their exposing Representative Henry Hyde helped them go public because it built Salon ‘s name. Even had the stock not just sat there, at the bottom end of its possible $10.50-to-$13.50 offering range, few people were going to get rich off it. A recent hiring binge meant that many hadn’t vested. On June 21, New York editorial director Larua Miller e-mailed that she and the staff at 1500 Broadway weren’t planning a party. “They’ll probably be drinking cocktails in S.F., but then they do that a lot anyway.”

In some ways, Mr. Talbot and his 4 percent is what this story has been about all along. “I kind of doubted his schemes all along,” said one Salon source. “He’s too much of a dreamer. But for the most part he’s pulled it off. So who the hell knows.”

Bob and Harvey Weinstein–the brothers Miramax–have chutzpah. Everybody knows it. It’s not a secret. While other moviemakers might kiss up– oh so discreetly, with whispered, off-the-record phone calls –to certain industry reporters, the Weinstein brothers just go all out. On June 23, for instance, they’re throwing a big party for Variety editor in chief Peter Bart at Barneys. Why? Well, why not! Plus, he’s been on the job for 10 years, and this is just their way of saying, you know, thanks.

Not to suggest that Mr. Bart could ever be swayed in his coverage of Miramax by something so … so inconsequential as a party. Of course not! And not to suggest that the Weinsteins would actually try to influence a media priest. God forbid! But still there’s something … well … odd? off-putting? Oh, never mind. It’s the new media. Swing, baby.

Speaking of Mr. Bart, he’s losing people. His film editor, his TV editor, his New York editors and a New York-based business reporter have all taken off. Not since Cecil B. DeMille’s The Ten Commandments , with its thousands of extras leaving Egypt, has there been such an exodus!

By Mr. Bart’s own admission, Variety is already understaffed, so it’s tough. Here’s the rundown: New York editor Martin Peers is heading to The Wall Street Journal , where he is replacing Eban Shapiro on the entertainment beat. (Mr. Shapiro is going to Newsweek to be senior editor of the business section.) Richard Morgan, who worked for Mr. Peers in the New York bureau, is leaving for The Deal , a new Wall Street daily. Others have succumbed to temptation and joined the industry they cover. TV editor Jenny Hontz has left to become a vice president at Touchstone Pictures, which is a division of the Walt Disney Company. And film editor Dan Cox has left to become an agent at the Broder Kurland Webb Uffland Agency.

“When people interview here, I make sure to ask that they not use it as a stepping stone to entertainment,” said Mr. Bart. But he understands. Oh, how he understands. Once Mr. Bart himself left The New York Times to be vice president of production at Paramount Pictures. “It ill-behooves me to say, Stay in the priesthood,” he said.

Have a nice 10th-anniversary party, Mr. Bart! But know that those catty journalists in the Hollywood community have duly noted that Disney chairman Joe Roth threw a party for you last summer, when your book The Gross came out. We’re just here watching your back for you. (Note to the reader: Disney owns Miramax. Come on, people. This stuff is easy . Keep up!)

Bill Buford was overambitious in putting together The New Yorker ‘s “20 writers for the 21st century.” That’s all there is to it. There wasn’t room for stories by 20 writers, and so The New Yorker took the … unusual step of printing five excerpts alongside 15 full stories. Mr. Buford, an American by birth who has spent many years in Britain, likened the excerpts to “teasers in the cinema” (translation for the American readers: “trailers at the movies”).

Mr. Buford made a big noise with his literary lists back when he was editor of Granta . But Granta was more conducive to running stories by, say, 20 writers in one issue than The New Yorker , which is a commercial enterprise functioning in a market where serious short fiction is not really all that valued by advertisers.

Publisher David Carey takes no responsibility: “We nailed it on advertising,” he said. “We’re way over from last year. Last year we did 77, and this year we did 109,” he said, referring to the number of advertising pages sold for this year’s and last year’s summer fiction issues. He noted that “there’s an editorial page budget” that they just couldn’t go beyond.

Mr. Buford fought hard. “I was arguing right up to the very end with people, throwing tantrums,” he said. Mr. Buford said he tried to get the magazine to drop Talk of the Town, the critics and even the cartoons. One thing that did run: the New Yorker -commissioned glamour shots of all 20 writers standing in Manhattan, with views of New Jersey in the distance, at their backs.

Mr. Buford said only one literary agent gave him a hard time for excluding her client’s story. “She kept me on the phone for 30 minutes!” he said. Ah, such is the editor’s life.

The magazine corralled actors into reading from the issue at Joe’s Pub on Lafayette Street, starting on June 15. That night, Mr. Carey enthused about the advertisers in the room. Actress Rosie Perez meandered through a Junot Diaz story–and the author did not look pleased.

At a party at his Gramercy Park apartment afterward, Mr. Buford said he didn’t fight for a bigger page budget. He knows a magazine like The New Yorker should be making money. “It’s very important,” he said.

The five of the 20 who did not see their stories published in full were Michael Chabon, Ethan Canin, Jonathan Franzen, Nathan Englander and Matthew Klamm. The magazine will run their stories in full eventually.

There have been boxes marked for donations for “Kosovo Relief” by the elevators of the old Condé Nast building at 350 Madison Avenue for several weeks now. This has caused some confusion. Just what do the Kosovars need that Condé Nast editors got for free and are willing to throw out?

Not much, at least on the Mademoiselle floor.

“There’s nothing in ours,” said one confidante. Nothing at all? “Some polka-dot shirt. I don’t know if that means people are stealing from it or what.”

At Vogue , one junior staff member got nabbed–by Vogue queen Anna Wintour herself–rooting through that magazine’s Kosovo Relief box. She thought the box was full of free stuff. Force of habit.

At the Allure box, there was a bit of a tiff between two staff members over whether it was appropriate or not to donate makeup. At Glamour , a stern memo went out via e-mail to all staff members, warning them to get their leftover winter sweaters out of the closets or else they would end up in the box!

The Vanity Fair Kosovo box perhaps gave a clue to that magazine’s mindset. (The ruling ethic there is a jolly sense of privilege, mixed with a semi-depraved sense of irony straight out of Donna Tartt.) It contained a slightly torn and slightly pilled pashmina shawl, Stila lip gloss and an outdated movie studio release guide.