Prosper magazine, launched in 2004, will halt publication of a printed edition, but the Prosper Media Group business will continue in some form online, company executives said.

The December issue will be the last. There was no answer at the Prosper office to a phone call Friday afternoon, and the magazine Web site still invited readers to subscribe to 12 issues for $12.

"The economic model that we had running here with Prosper, both Prosper Media and the print publication, just wasn't working," said majority owner Mike Teel in a videotaped statement dated Nov. 1 and posted on the prospermag.com Web site. "And what we needed to do was eliminate the pressure of the ongoing business to give us the time and platform to rethink the model. ... We're laying off all employees. We've given them a great severance package."

The company did not disclose how many employees were laid off or the specifics of the severance package.

Teel said Sacramento-based Prosper Media would "meet all of our obligations as a business" and is current on most payments. "We want to bring an end to this business and then go on in a virtual realm." The Prosper brand will continue, Teel said, on an Internet platform. Executives now are working through two possible business models, he said, and will make an announcement on the future of the business once they've worked through both strategies.

Teel, an heir of the family that built Raley's Inc. of West Sacramento, and Sacramento River Cats owner Warren Smith are major financial backers of Prosper.

The move comes less than a year after the appointment late in 2006 of several executives at Prosper, including a new editor-in-chief. Two top managers had resigned last fall and the company announced plans to position itself as a national media player.

Reached at his home in Rescue, former editor-in-chief Jeffrey Young said the layoffs took place Thursday. Prosper employed about a dozen people, including seven full-time editorial employees, said Young, a former Forbes magazine editor hired in December to head Prosper's editorial staff.

The December issue has gone to press and is expected to be Prosper's last. But Young said the magazine's fate is uncertain, and the print edition could make a comeback as early as next spring. "There's a possibility we may resurrect it and move the magazine to the Bay Area," where there are more readers and advertising dollars, he said.

"One of the real problems with the Sacramento marketplace is that it's too small to attract first-tier national advertisers," Young said. "You're stuck in a small market with an inability to get access to the media buyer decision-makers."

He said revenue was growing at Prosper, but the magazine was not generating enough return on equity. The problem, he said, is the small pool of business-publication advertisers. Prosper has a circulation of 30,000 per issue.

Scott Doniger, vice president of marketing and circulation, confirmed that Prosper is "reviewing opportunities that would make sense in the print world," but he declined to offer specifics. He said prospermag.com would continue in some form. "We want to try to stay a step ahead of where the market is moving, particularly the market for business news and for businesses that are looking to promote themselves," Doniger said.

Story courtesy of Sacramento Business Journal

Gillian Parrillo
The Sacramento Magazine