Red Herring Focusing Offline

According to an internal memo penned by Red Herring execs and subsequently
leaked to Reuters, the privately held dot-com start-up plans to layoff 25
employees or roughly 7% of its workforce. The belt-tightening is largely a
result of modest overlap associated with Red Herring’s recent land-grab of
online financial data firm StockMaster.com.


Red Herring’s interim CEO and co-founder Christopher Alden also cited a
general slowdown in ad sales on the company’s Web site as the culprit for
the layoffs. This latest move is seen as an opportunity to consolidate some
of Red Herring’s online and offline operations. In a nutshell,
Redherring.com isn’t nearly the moneymaker that Red Herring, the
magazine, is on the newsstands.


Red Herring’s print publication is starting to look more like a Computer
Shopper Guide
on steroids than your average tech rag. The company is
stuffing its magazine with more ads than articles these days, with a portly
600-plus pages each month. What’s more, Red Herring has immediate plans to
bump its monthly circulation to a more lucrative bi-monthly distribution.


That’s a surefire sign that the print magazine is a cash cow, and the
recent layoffs likely point to the online venture as a money-losing porker.
While Redherring.com does a top-notch job of covering the Silicon Valley
beat, the site has really taken a beating from the fallout in tech stocks.
The Web property originally staked the larger part of its focus on venture
capital news and the new issues market two areas that have been deader
than disco since mid-April.


The IPO calendar and events in the venture capital patch have hogged the
spotlight ever since theglobe.com’s charmed
beginnings and moonshot debut on Wall Street in late 1998. But the
company’s lowly share price these days is almost curiously representative
of how anemic the once-hot IPO and VC markets have become. While there are
signs that investor pessimism is finally reaching an inflection point, and
both IPOs and the VC industry should enjoy brighter days ahead, much of the
previously ultra-frothy speculation seems absent that made both areas so
sexy and wildly popular with armchair investors.


Quite frankly, Red Herring’s beefy offline brand competes much better with
a handful of newsstand rivals than the company’s narrow online brand. The
magazine launched back in 1993, a few years after graybeards Upside and Wired. These days there are more than
enough Internet and tech start-ups favoring paper advertising as a means to
boost branding efforts. While there are a bevy of magazine newcomers
competing for ad dollars including Business 2.0, Fast Company, and eCompany, the number is nowhere near the
army of online me-too competitors that occupy space alongside the likes of
Redherring.com.


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