Gay Media PlanetOut Market Crunch

TOPICS: Mainstream media news. US gay media market. Mainstream news reporting on gay media issues. PlanetOut. Gay.com Out magazine. Out Traveler. Gay and lesbian marketing issues. Cash crisis at PlanetOut gay media company. News reports in the US tell that PlanetOut is struggling with a cash crisis after posting poor first quarter financial results. Company needs $15 million cash injection. Restructuring of PlanetOut assets is likely.

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PlanetOut - publishers of a number of gay media properties, including Gay.com, The Advocate, Out, Out Traveler, and the PlanetOut.com website - is experiencing financial difficulties.

The Nasdaq listed public company (Nasdaq: LGBT) last week posted a quarterly loss for the first three months of 2007 that was significantly larger than investors had been expecting from PlanetOut.

In a conference call last week PlanetOut told analysts that now more cash is urgently needed by PlanetOut.

Last week investors bailed on the company, pushing the PlanetOut share price to the lowest level since its IPO three years ago.

PlanetOut shares closed on Friday at $1.64. The latest PlanetOut Nasdaq trading price is here.

According to The San Francisco Chronicle: "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."

PlanetOut's CEO Karen Magee told analysts late last week: "This is deeply disappointing and concerning to me and the rest of the management team. 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."

Gay Market News sees the PlanetOut corporate woes as part of rapid social and technological change sweeping markets everywhere.

The gay community now has a range of alternate social networking and communications sites to choose from which eats into revenues for the subscription service of the PlanetOut Gay.com brand, and print media is being hit generally by the growth of online media - although PlanetOut has sought to be at the forefront of those developments.

A company restructure is slated over the next two years - but in the short term the company requires $15 million cash injection to continue operations.

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