Bad News for Webzines -- Salon's IPO Sinks

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Well, that seals it. TIME Daily isn’t going public anytime soon –- not after the way Salon fared Tuesday. The online news-and-opinion magazine, best known for a controversial scoop of the story nobody wanted -– Henry Hyde’s illicit love life -- went nowhere in its IPO, opening at $11.12 1/2 (from an asking price of $10.50) and soaring all the way to ... well, it didn’t. Shares closed at 10, confirming what market watchers have been saying for a while now: The bloom is off the dot-com rose. TIME Wall Street columnist Daniel Kadlec, who’s been saying it longer than most, notes that "this is just the latest Internet IPO that has come out weak. When it comes to these stocks, the easy money has all been made."

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It didn’t help Salon in the least that it was just a magazine in Net clothing. "There’s just no sizzle here," Kadlec says. "This is just a content company, like Wired. When it tried to go public a couple of years ago, it was billed as an Internet company, but there was nothing fundamentally Internet-ish about it." Salon had hoped that its upscale readership would convince investors to bank on its advertising revenues, but apparently its earnings history ($4.3 million for the last nine months of 1998, compared with a loss of $2.9 million a year earlier) wasn’t convincing. A little timing wouldn’t have hurt either. "Six months ago," says Kadlec, "I have no doubt this would have taken off like a rocket."