News, Wit & Commentary for Lesbians
JIC Post:By Verne KopytoffSan Francisco ChronicleIn a deal that combines two gay media giants, PlanetOut Inc. said Wednesday that it will acquire the publisher of the Advocate and Out magazines.The agreement, valued at $31.1 million, propels PlanetOut beyond its online roots and into the print publishing world, nearly doubling its size. By combining forces, PlanetOut of San Francisco also hopes to be more attractive to advertisers because of its broader reach, to more effectively solicit magazine subscriptions through its online properties and to reduce costs."This is one gay marriage that the laws do allow," said Lowell Selvin, PlanetOut's chief executive officer, alluding to the controversy over same-sex marriages, an issue his company has championed.PlanetOut has emerged as the dominant online media company for the gay community, with 5.4 million unique visitors in October. A strong online advertising market and a successful initial public offering last year have given the firm a financial cushion, some of which was used to pay for the acquisition.LPI Media Inc., the Los Angeles publisher bought by PlanetOut, distributes 8.2 million magazine copies per year, making it the biggest print publisher for gays and lesbians.The Advocate, founded in 1967 and an institution in the gay community, covers news and entertainment. Biweekly circulation is 120,000. Out, founded in 1992, follows fashion, style, trends and society and has a monthly circulation of 130,000.Asked about any planned changes in magazine content, Selvin said redesigns may be forthcoming. Both magazines have online versions. The deal also gives PlanetOut the book publishing arm of LPI Media, Alyson Publications.Richard Fetyko, an analyst for Merriman Curhan Ford & Co., praised the deal for potentially increasing the profile of PlanetOut's Web sites. At the same time, he said, PlanetOut can help generate extra subscriptions for the print magazines through online advertising.The only downside, Fetyko said, is the risk that PlanetOut will fail to integrate the combined companies as quickly as promised.Selvin said PlanetOut, which has no experience with print publications, has hired Bob Cohen, who has a lengthy history in the print industry, as interim president to oversee the new division.PlanetOut and LPI Media first talked about an acquisition in 1999. But the planned merger was called off at the time after the Internet industry began tanking.Selvin said that after focusing on getting its online business in shape, PlanetOut could now afford to expand offline. The acquisition is expected to nearly double PlanetOut's revenues, which were $7.6 million in the third quarter, as reported Wednesday.PlanetOut shares rose more than 5 percent Wednesday, gaining 40 cents to close at $7.51 in Nasdaq Stock Market trading. However, the stock lost 30 cents in after-hours trading.
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