Out And About, the gay and lesbian travel magazine, may be the next deal for PlanetOut, the gay Internet portal, several sources told DIRECT Newsline.
PlanetOut said yesterday that it has merged with Liberation Publications Inc., which produces The Advocate, a biweekly newsmagazine. Liberation will complete its acquisition of Out magazine next week.
While the terms of the merger were described only as a stock transfer plus cash, estimates of the total amount have reached as high as $30 million.
The deal makes PlanetOut a more fully integrated media company with a significant online and offline presence. In addition to the Web site, www.planetout.com, the San Francisco-based company operates PlanetOut TV, which airs on the site as well as on Canadian television. The company also has partnerships with several Internet service providers, most notably America Online. AOL, along with Mayfield Fund and Eden Capital, gave PlanetOut $19 million in venture capital funding.
PlanetOut’s merger and acquisition spree has had mixed reaction among direct marketers specializing in this niche.
“Gay and lesbian businesses have struggled because they’ve been undercapitalized and have self-financing,” said John Knoebel, who heads the New York-based Triangle Marketing Service. “Finally a company has the financial resources to do a professional job in a professional playing field.”
Knoebel added, “It will further develop Internet marketing to gays and lesbians and from the mainstream to the [lesbian and gay] community,” noting the affinity of the Web for direct marketing.”
It’s a gay monopoly that will leave everyone else scrambling,” he said. “Soon one gay company will be doing it all,” said Andrew Isen, whose Win-Mark Concepts in Washington DC produces the Direct Male card pack.
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