HoneyMag.com Parent Company Reports $6.7M Net Loss
Sahara Media Holdings, Inc., parent company of HoneyMag.com and the social network HiveSpot.com released their annual report Friday, reporting a net loss of over $6.7 million. The company, which has
HoneyMag.com Parent Company Reports $6.7M Net Loss
Sahara Media Holdings, Inc., parent company of HoneyMag.com and the social network HiveSpot.com released their annual report Friday, reporting a net loss of over $6.7 million. The company, which has been focused on building upon the iconic Honey Magazine Brand, has wasted little time spending away the over $10 Million it raised in in 2008. According to the report, over $5 million was spent on General and Administrative costs and over $1.4 million in product development. If you recall, the company which discussed their corporate strategy with us last November, talked about their focus on building on and building out other brands in-house. The company also mentioned acquisitions, which thus far we haven’t seem them execute as of yet.
Sahara’s CEO Philmore Anderson IV, explained the company’s vision in a letter sent to their shareholders:
Over the past year, we have been focused on broadening Sahara Media’s operating plan, developing a process for launching new brands through acquisitions and in-house builds, as well as for launching new web verticals that will drive general market traffic into our social network. We have taken a number of exciting steps to expand and develop our proprietary media holdings, positioning Sahara Media for significant future revenue and profit growth.
For the year of 2009, Sahara Media Inc., reported revenues of $38,867, $35,000 of which came from their in house direct sales ad team, which signed their first client, Alberto Culver, in the second half of 2009. Sahara has opted to discontinue their ad aggregator agreements with BET and GLAM Media, due to the fact that their in house sales team can sell at a higher margin than the ad aggregators. According to the report, the company is has inked future advertising agreements with two Fortune 500 clients and is currently negotiating additional agreements which are expected to be executed in 2010.
Sahara Media has also been focused on driving their unique visitors and impressions through organic and viral means to our sites. Sahara saw a substantial growth in traffic reaching as many as, 1.8 million impressions in August, there best performing month. Anderson addressed the sites growth saying:
Sahara Media continues to grow its flagship Honeymag.com brand to becoming the leading destination for the 18-34 year old multicultural market and for Fortune 500 companies looking to reach them, as demonstrated by the following results:
– Overall traffic more than quadrupled versus one year ago
– 50% and 35% growth in daily unique visits and page views respectively since the end of 2009
– 35% increase in average time spent on Honeymag.com since January 2010
– Advertising relationships with Alberto Culver, Procter & Gamble (Cover Girl) and Toyota
In the shareholders letter, Anderson also announced Sahara’s newest project YouBlast.com. According to Anderson YouBlast.com, which is slated to launch third quarter of 2010, will take social network to another level:
YouBlast.com will be more than a niche social network – users will be able to host and instantly share large amounts of content through its community interface. This easy-to-use system will create a degree of viral interactivity that will transform the way in which consumer’s access, navigate, use and distribute content online.
It will be interesting to see how the Youblast.com will jive with HiveSpot.com, and HoneyMag.com.
Re: HoneyMag.com Parent Company Reports $6.7M Net Loss
just pissing money up a rope. Honey was a failed brand after Vanguarde Media trashed it. To buy it and then blow all of this money on a website that can be basically run off of a wordpress platform is re-damn-diculous. Come on now, that is a dot com boom type FAIL.
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Re: HoneyMag.com Parent Company Reports $6.7M Net Loss
Honey Mag’s Sticky Situation
This is very long so I'll only post excerpts:
Honey, the magazine that once vied for Essence’s spot as the go-to glossy for African-American women, was one of the many publications that folded in the last decade, victimized by the shift to online advertising and changes in the media economy. YouBlast Global, formerly known as Sahara Media Holdings Inc, sought to revive the brand as a website in 2008 and has since invested millions of dollars in the niche site and a soon to be released social network named YouBlast. From the poor performance indicated in YouBlast Global’s 2009 annual report, the company’s trajectory is in question. With a reported loss of $6.7 million in 2009, revenues of only $39,000 for the year and $300,000 dollars left in the bank, 2010 might well be the company’s swan song.
When YouBlast Global raised funding and relaunched the Honey brand in 2008, it outlined its mission simply. “Honey is a great brand with a strong connection to an important audience,” said Philmore Anderson, YouBlast Global’s Founder and a former music executive, in a statement . “We are positioned to take the Honey brand to the next level as an online magazine and social network.”
Despite the company’s praise for the site’s performance in the most recent press release, it’s clear that the site is not doing well and there’s little to indicate that HoneyMag.com’s growth was ever a primary objective for the company.TheHive Spot.com, which has been practically lying dormant, represents the company’s half-baked foray into social networking and will soon be replaced by YouBlast.
“I remember a few years ago, when I was reading some of their opening remarks, [it seemed that] a lot of their funding was related to how many page-views they could generate and unique visitors they could attract,” said new media consultant Liz Burr. “If your funding and livelihood is based on page-views, it probably would’ve been better [for them] to acquire blogs than build propriety social networks.”
The lack of buzz and the fact that it has been able to rack up only 61,000 unique monthly visitors (comScore) after its most recent relaunch puts HoneyMag.com well behind competitors like Essence.com and HelloBeautiful.com, which are both attracting about half a million unique visitors per month according to comScore.
The company listed their selling and marketing costs at $339,770.
“Considering the company only generated $38,000 in revenue, the $339,000 that went into sales and marketing was not an efficient or effective use of capital,” said Doyle. As noted in the report, the increase is “primarily attributable to increased payroll of $96,000, advertising of $62,000 and marketing of $50,000.” YouBlast Global’s investment in a sales force could be considered aggressive considering that HoneyMag.com did not have the traffic to support such personnel. Assuming it was meant to be a flagship property, HoneyMag.com would have benefited from a spending strategy focused on content development and user activity. The marketing and sales staff that the six figure budget afforded the company brought in essentially $38,000 over the entire year, signing their first client (Alberto Culver) in the second half of 2009.
“The company seemed to have raised most of its capital in ’08 and did not raise capital in ’09,” said Williams. “The cash on hand has gone from approximately $4 million to $300,000 between December 2008 and December 2009. A major expense that impacted the company’s cash on hand was approximately $200,000 in website development expenses. Not sure if that’s reasonable, but seems awfully costly at a glance.”
:co ffee:
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