Only four months ago, GFN reported cash-strapped gay media portal, PlanetOut Inc. — the parent company of Gay.com, Out and Advocate magazines — was close to bottoming out.  The piece-by-piece sell-off of the company continues this week with the sale of PlanetOut's magazine and book publishing business to the gay-themed television network, Here, for $6 million in cash.

PlanetOut signed a letter of intent with Regent Releasing, an affiliate of New York-based Here, according to a press release by the company. A formal agreement should be done by April 30, and the deal should close by August 31.  Regent also agreed to pay $500,000 in cash as a put/call payment when the deal closes.

Although the downward spiral of the company's flagging business has been occurring for years, the nadir may have come in 2007. 

For the first nine months of 2007, the San Francisco-based PlanetOut reported a loss of $33.1 million on revenues of $39.8 million. But at the time of GFN's report the year wasn't over yet, the worst was yet to come.  By the end of 2007, the company reported a $51.2 million loss. The company's accumulated deficit on Dec. 31, 2007 was about $89.5 million.

As part of a private placement in July 2007, through which PlanetOut raised $24 million after fees, the company was obliged to try and sell off what it calls its "adult businesses," but it has so far been unable to sell them. Needing more money, the company said in a March regulatory filing that "raising additional financing will be very difficult, if it could be obtained at all."

PlanetOut did successfully sell off its travel business, RSVP, to Atlantis Events Inc. for an undisclosed sum in October 2007, a little more than a year after acquiring it.  Last week PlanetOut put travel site Expedia Inc. in charge of travel booking on its web sites. The deal will mark Expedia's first marketing efforts toward the gay market, as they play catchup with travel site competitor, Orbitz, which has touted its own successful gay travel micro-site since 2002.

PlanetOut says it wants to return its focus to its Web sites Gay.com and PlanetOut.com, which they consider their "core business." The online branch of the company, however, has been contributing less and less to its revenue for each of the last three years. In 2005 it accounted for 87 percent, in 2006 54 percent, and in 2007 51 percent.

PlanetOut's print media, which include Out magazine and the Advocate, on the other hand, has seen increases since 2005. The company's magazine publishing's portion of total revenue rose in each of those years, from 13 percent in 2005 to 46 percent in 2006 and 49 percent in 2007.  Out magazine has the highest monthly circulation of any gay publication in the U.S.

Under the deal with Regent, PlanetOut can start looking for new tenants to sublease New York and Los Angeles space held by the magazine business on May 1.

It should be noted, PlanetOut is not done with the disposition of its assets: it is continuing to work with Allen & Co. to explore other sale options for the company, and other "strategic alternatives" with respect to its online businesses.  Could this mean a sale, at some point, of the company's Web portals?  Stay tuned.