May 22, 2007 | The Biz

PlanetOut Partners to sell off porn mags

Gay media titan PlanetOut Partners owns Gay.com, PlanetOut.com, OUT Magazine, The Advocate, Alyson Publications and porn magazine group Specialty Publications (Men, Freshmen, Unzipped and [2] magazines).  That's one mighty big chunk of gay media, which you might assume would be guaranteed highly profitable.

Yet the publicly traded company's results for the last quarter showed a net loss of $6.9 million, sparking  a steep drop in share prices. PlanetOut announced shortly thereafter that it was putting  its adult division, Specialty Publications, up for sale, even though the porn mags make a profit.

The week before revealing its plans to sell the porn magazine unit, PlanetOut eliminated the position of Specialty Publications' President. Caryn Goldberg, with Specialty since 1993, is no longer with the company and she will not be replaced. 

"It is a profitable one for us," Karen Magee, PlanetOut's chief executive officer told the Bay Area Reporter. "With that said, the adult business does not fit going forward with our other media properties."

A major reason for the sell-off of Specialty is that PlanetOut requires a major cash infusion to pay off  a $15 million loan which is in arrears. 

Much of PlanetOut's current woes are due to significant losses in RSVP Cruises, which it acquired in January of 2006 for $6.5 million. Some analysts wonder why a media corp. would buy a cruise company, as the two have little in common aside from the gay factor.

Gay.com and PlanetOut.com personals are also showing lackluster returns due to increased competition from other personals and social networking sites.

Numerous analysts blame years of poor management for PlanetOut Partners' situation. In the past year there has been an exodus of high-level executives, including Jeff Soukop, the company's president and chief operating officer who left in March. Lowell Selvin, the company's longtime CEO, stepped down last June for health reasons, and plans to leave the board this summer.

It makes you wonder, is bigger always better?

• Cruise business, ad declines sink PlanetOut [Bay Area Reporter]
• PlanetOut going down? [Queerty]
• Parent company eliminates pres. position at Specialty Publications [AVN]