Local Seattle News Site, Crosscut, May Switch to Nonprofit Model To Pay the Bills

11/19/08Follow @xconomy

One of Seattle’s best-known technology investors, Tom Alberg of Madrona Venture Group, had a conversation a couple years ago with David Brewster, the founding editor of Seattle Weekly, about how the Internet was transforming journalism. “Tom said, ‘Local news is a big opportunity, and online media is a big opportunity. Let’s brainstorm some ideas,’” Brewster recalled.

The idea that emerged as a company in April 2007, Crosscut, has proven it can build a growing audience, but not a sustainable business model. This past week, it laid off editor Chuck Taylor (a highly-respected former managing editor of Seattle Weekly) in an effort to conserve cash. The company is now considering whether to switch from its for-profit operation that relies heavily on online advertising, to a nonprofit model supported primarily by a broad network of donors, sort of like National Public Radio, with supplemental income from events and ads.

Whatever Crosscut does will be watched by a lot of people in Seattle politics and government, as well as by journalists around the country, who are yearning for a sustainable way to cover public affairs as mainstream newspapers continue in a downward spiral. Crosscut got off to a promising start last year, with $500,000 in seed capital from a group of 25 prominent people in Seattle, including Alberg, former Environmental Protection Agency director William Ruckelshaus, former Mayor Paul Schell, University of Washington computer science professor Ed Lazowska, and ex-city council member Jim Compton. It has more than doubled its number of unique visitors per month in the last year, with more than 73,000 visitors at last count and more than 225,000 page views a month, Brewster says. One early story about Alaska Gov. Sarah Palin, shortly after she was named Sen. John McCain’s running mate, nearly melted its servers with traffic. But the buzz didn’t generate enough dollars from advertisers, especially as the economy headed into recession this fall, to make the for-profit model look like it could work.

“When people look around at starting this kind of thing, you look at cities with high rates of Internet adoption, a highly educated population, and a high interest in civic matters,” says Brewster, Crosscut’s publisher. “Seattle, Minneapolis, and Vancouver, BC, are a few natural cities for this. Our thought was that advertisers are moving to the Web, Web ads are moving to the local level, and the mainstream media is losing altitude. It provides an opportunity.”

Notice the use of the present tense with regard to the word “opportunity.” When I saw Taylor post an update on his Facebook page over the weekend that he was looking for a new job, my first reaction was that Crosscut must be toast. Brewster says that isn’t so. … Next Page »

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