Troubled Salon.com hopes for reprieve

Salon's stock has traded below $1 since December

Hopes of a rescue for struggling online magazine Salon.com were boosted, as its parent company announced a cash injection of $2.5m, and the sacking of 14 staff in a bid to cut costs.

San Francisco-based Salon Media Group said it received the money from a group of investors including William Hambrecht, whose firm handled the company's initial public offering in June 1999.

As of 30 June, the company had just $1.4m in cash, after losing $2.9m in the second quarter of the year.

The firm's shares are also in danger of being delisted from the Nasdaq stock market, after trading below $1 for more than six months, thus violating the exchange's listing rules.

Staff cuts

As part of its efforts to preserve its dwindling cash, Salon said it will lay off 14 of its 100 workers.

The company has periodically shed staff in the last few months, after expanding hugely in the late 1990s.

To generate more revenue, Salon said it will start charging readers for its "Table Talk" online chat feature.

In April, the firm launched a paid premium service, which already claims to have at least 12,000 subscribers.

Other online publishers, including the websites of the Wall Street Journal and The Economist, have prospered from charging subscribers.

Salon's cash announcement was made after the US markets closed on Thursday.

Late on Thursday, Salon's shares were down one cent to trade at 44 cents.