Laid-Off Newspaper Reporters Flock to Online Startups, Profits Still Elusive

onlinelogos.jpgLaid-off newspaper reporters are increasingly finding refuge on the Internet, but so far, their online startup efforts are being met with mixed results: Today, the trio of investors who teamed up with 30 journalists from the folded Rocky Mountain News to launch In Denver Times last month announced that they’re backing out of the venture. Initially, the investors hoped the site would get 50,000 readers to pay subscription fees ranging from $4.99-$6.99 a month. According to Kevin Preblud, a spokesman for the investors, In Denver Times has only managed to sign up approximately 3,000 subscribers. An article on the site says that “certain members of the INDT newsroom group, led by co-founder Steve Foster and business writer David Milstead” currently seek new backers.


Earlier this month, Kery Murakami a former 20-year veteran of the Seattle Post-Intelligencer launched SeattlePostGlobe.org with several other former SPI staffers who lost their jobs when the paper went online-only in March. Currently, the SeattlePostGlobe.org team is working for free and the future of the site remains in doubt. Two weeks ago, Murakami published a letter to readers saying that the PostGlobe staff is “volunteering because we believe in this, but realistically we can’t do this for long without your help.” In his note, Murakami also said that the site will “need thousands in our community pretty soon to donate $10 a month so we can keep going, at far less pay than we received, while we apply for grants and work to sell some ads.” Additionally, Murakami hopes to raise individual contributions of $100,000 from “civic leaders” in Seattle.

Last fall, Diane Lindquist, a journalist who took a buyout from the San Diego Union-Tribune in January of 2007, launched Mexbiznews.com. Lindquist began the site, devoted to Mexican business news, with funds from her buyout package. Mexbiznews.com actively seeks sponsors and ads, but according to Entrepreneur.com’s Dennis Romero, who interviewed Lundquist earlier this year, “advertising has so far been scarce.”

In Arizona, two different online news sites rose from the ashes after layoffs burned Phoenix’s East Valley Tribune. Heat City is a one-man operation begun by former EVT court reporter Nick Martin in January. Currently soliciting donations, Martin has raised $942 which, according to a site graphic, represents 31 percent of his current goal. Martin has posted about his financial situation on Heat City, indicating that the site will not be able to continue without substantial donor support. In an interview with PBS MediaShift, Martin also said he is considering filing for non-profit status. (Martin did not respond to a request for comment on this story).

Four other ex-East Valley Tribune staffers teamed up with a Phoenix-area political consultant named Bob Grossfeld for the January launch of the Arizona Guardian, a site dedicated to the state government. Guardian readers pay $150 for a full monthly subscription or $30 for a limited site pass, and the site has advertisers. Grossfeld says he developed the Guardian’s business model to avoid making the mistakes of other media outlets which solely rely on advertising, subscriptions, or investment as a source of revenue. As Grossfeld told us, “our model is ‘we’ve got to eat,’ so we’ve been doing anything and everything from day one.”

So far, the Guardian’s plan seems to be working. Initially, the site was funded with a $10,000 investment from Grossfeld and the reporters worked for free. Grossfeld fought to keep costs low and says the Guardian “only touched $2,200 for the entire first quarter.” Now, according to Grossfeld, things are looking even rosier, in that “everybody’s getting paid, we have no debt, and each week we’re bringing in more revenue than is going out… We’ve gotten through the first quarter of operations, we’re showing a profit.”

With news of newspaper layoffs still coming in at a steady clip, we’re likely to see more laid-off journos attempting Internet entrepreneurship. Hopefully, more of these ventures will find their way to profitability.

Hunter Walker

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