Down on page 15 of their 2006 SEC filing, PlanetOut can't keep up the charade any longer and just admits it:

"We have a history of significant losses," they declare, outlining a litany of past failures and the myriad events that could lead to the company going out of business altogether. "If we do not regain and sustain profitability," the filing continues, "our financial condition and stock price could suffer."

Well, it did. And it continues to suffer. As the largest owner of gay media in America—their trading symbol is "LGBT" for crying out loud—one has to wonder what the consequences would be if PlanetOut (and all its subsidiaries: Gay.com, PlanetOut.com, Advocate.com, Out.com. The Advocate, Out , Out Traveler, HIVPlus, et.al.) was suddenly no more.

Observers and critics have been predicting PlanetOut's demise for years now, and yet the company has managed to persevere and even grow despite all the doomsaying. I know something about the risks and responsibilities that gay entrepreneurs face when combining gay media with a long history of serving our community and the gay rights movement. I know that Lowell Selvin, who played a central role at PlanetOut until he resigned as CEO for medical reasons last year, shared that commitment.

But now Selvin is gone, and another key player, COO and president Jeffrey Soukup, resigned two weeks ago. Karen Magee, who took Selvin's place as CEO last June, hasn't yet managed to right the ship. In fact, from a stock price high of almost $15 in January 2005, and $10 as recently as a year ago, PlanetOut is now trading at $3.20.

This just in, more bad news about Planet Out from the San Francisco Business Times:


...

The news is likely to be poorly received on Wall Street, although the PlanetOut stock does not have much further to fall, having already dropped from $15 per share in January 2005, to $10 as recently as a year ago, to trading at $3.05 today, down another 15 cents since last Friday.
...

The collapse of PlanetOut would be devastating to gay media generally, given holdings that include not just the websites Gay.com and PlanetOut, but the Advocate, Out and RSVP vacations.

XY magazine protested the July 13 censorship of one of its stories by PlanetOut.com, claiming that the gay media giant was pandering to corporate sponsors. The censored story was an opinion piece by publisher Peter Cummings criticizing the lack of advertising from companies like Abercrombie & Fitch, who have steered clear of the youth-oriented magazine because it is too "racy." PlanetOut claimed the story was censored because it solicited funds from readers, a direct violation of the partnership agreement between the Web site and the magazine. Soon after the incident, XY severed its Internet ties with PlanetOut.

WITH THEIR VAPID CONTENT and reliance on advertising dollars, the major gay media outlets in America are like circus elephants, teetering on one toe at the pointy top of the dangerously tall and thin Trans America Pyramid in downtown San Francisco, each setting themselves up for a disappointing balancing act. Eventually readers and visitors will bore of their lackluster content [many already have]. Eventually, advertisers will realize they're not reaching an interested market--that the mainstream gay press isn't even respected by gay people.

I've always found XY's editorials to be remarkably on-point.

PlanetOut Inc.’s first major hurdle in its uphill climb toward fiscal solvency is just days away. After posting a $6.9 million loss the first quarter of this year, the company’s lender set June 30 as the date by which it must raise at least $7 million—with another $8 million to come by August 31.

...

Despite PlanetOut’s slump, the overall health of the LGBT media market continues to improve, with ad spending in gay and lesbian publications reaching a record $223.3 million in 2006, an increase of 5.2% over 2005 and an increase of 205% since 1996, according to the latest edition of the Gay Press Report, an annual survey produced by Prime Access Inc. and Rivendell Media.

During the same ten-year period, ad revenue for all consumer magazines increased by only 47%, translating to a compound annual growth rate of 4%, versus 11.8% for gay media.

Shares of PlanetOut, Inc., rose sharply today on news that the only gay company has found $26.2 million in private money to meet looming creditor deadlines. The company -- which owns Gay.com, the Advocate, Out and Out Traveler magazines and RSVP Vacations -- had faced a deadline on Friday, June 30, of raising $7 million to pay off loans, with another $8.5 million due by the end of the year.

Today, PlanetOut announced it will receive $26.2 million in exchange for selling 22.8 million shares of common stock to several private equity firms, including Special Situations Funds, Cascade Investment, L.L.C., SF Capital Partners, PAR Investment Partners LP and Allen & Company LLC. The price of 87 cents per share is well below the market price the stock has been trading at in recent weeks.

Bill Gates, operating through his Cascade Investment arm, is among the investors participating in the $26.2 million funding of the gay, lesbian, bisexual and transgender online community PlanetOut.

PlanetOut Inc., a media company which runs print and online media properties including Gay.com, said Thursday it will close its international offices in a move to lower expenses.

The affected offices are located in Buenos Aires and London, the company said.

WASHINGTON (AP) -- PlanetOut Inc. said Tuesday its board approved a restructuring plan that will reduce the company's total work force by about 15 percent, according to a filing with the Securities and Exchange Commission.

According to its annual report filed with the SEC, PlanetOut employed 273 full-time workers worldwide as of December 2006, including 10 in Britain and 26 in Argentina.

PlanetOut announced today that its stockholders had approved a reverse stock split designed to shore up the stock's price, which at times this year has hovered as low as $1 per share and below. The company, which trades as LGBT on the Nasdaq exchange, said in a release that shareholders approved the move in an Aug. 29 meeting, and the PlanetOut board set the ratio of the reverse stock split at 1 for 10.

The change is expected to become effective by Oct. 1, when PlanetOut every 10 shares of common stock of PlanetOut will be combined into one share of common stock. The share price will be increased by the same proportion. As a result, PlanetOut shares will trade above $10 per share, far above the $1 minimum set by the Nasdaq exchange rules. The stock closed today at $1.45 per share, up 9 percent on the day, but the reverse stock split was announced after the exchange had closed for the day.