San Francisco-based PlanetOut said it also would assume $7 million in debt owed by Los Angeles-based LPI Media Inc., whose four magazines have a combined circulation of 8.2 million. Publicly held PlanetOut has 152 employees and operates websites — PlanetOut.com, Gay.com and Kleptomaniac.com — that offer dating, travel, shopping and other services.
PlanetOut CEO Lowell Selvin said the sites offer advertisers the most extensive network of gay and lesbian people in the world. He also said the acquisition should allow PlanetOut to double its revenue, which was $25 million last year.
“This combination provides a larger, more diverse foundation for additional growth, particularly in our advertising business, as it becomes a larger percentage of our overall revenue and it enables us to better reach the markets we serve, driving higher growth in a more cost-effective manner,” he said. “This is one gay marriage the laws do allow.”
Richard Fetyko, a senior vice president with investment bank Merriman Curhan Ford & Co., told the Los Angeles Times that the combination would create a GLBT powerhouse.
"Audience reach is everything," he said. "If you can double your advertising reach, you can triple your revenue. This is what this acquisition will accomplish."
PlanetOut on Wednesday reported third-quarter earnings of $841,000, or 5 cents a share, contrasted with a loss of $29,000, or 25 cents, for the like quarter in 2004. Revenue was $7.6 million, up 20 percent from $6.3 million.
