Advocate, Out, book publishing division go for $6M to Here! Networks
PlanetOut Inc. has agreed to sell its magazine and book publishing business — which includes The Advocate and Out magazines — to Here! Networks for $6 million in cash, according to an article published Wednesday, April 9 in the San Francisco Business Times.
A formal agreement should be done by April 30 and the deal should close by Aug. 31, the Business Times reported.
A letter of intent between PlanetOut and Regent Releasing, an affiliate of Here Networks, calls for Regent to pay $1 million on or before April 30, depending on when the agreement is completed, and then $1 million on the 15th of each month from May through September.
PlanetOut officials said it intends to return its focus to its Web sites, which include Gay.com and PlanetOut.com. The San Franscio Business Times reported that the company’s online segments have been contributing less to its revenue for each of the last three years, dropping from 87 percent in 2005 to 54 percent in 2006 and 51 percent in 2007. In those same three years, the magazine publishing’s portion of total revenue rose from 13 percent to 46 percent to 49 percent.
PlanetOut also recently put Expedia Inc. in charge of travel booking on its Web sites and has hired Allen & Co. on a three-year contract to help it with strategy, including a possible sale of the company.
PlanetOut reported a $51.2 million loss for 2007 in February, and the company’s accumulated deficit on Dec. 31, 2007 was about $89.5 million, the Business Times reported.
PlanetOut raised $24 million, after fees, as part of a private placement in July last year, that also required the company to try and sell off its "adult businesses." The company has been unable to sell those assets so far, and in a March regulatory filing acknowledged that raising necessary additional funds would be difficult, if it could be done at all.
This article appeared in the Dallas Voice print edition April 11, 2008.