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Michelle V. Agins/The New York Times
Jacob Weisberg, editor in chief of Slate, says, "We deliver the quality of analysis of a weekly in real time."

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Ron Wurzer for The New York Times
Scott Moore of MSN News and Information, which publishes Slate, notes the benefits Slate enjoys from being owned by Microsoft.

Slate Sets a Web Magazine First: Making Money

By DAVID CARR

Web purists who long believed that Slate, the online magazine founded by Michael Kinsley and bankrolled by Microsoft, was never a bona fide digital media service now have a final, damning piece of evidence.

In the first quarter of this year, Slate took in more money than it spent.

Of course, given $20 million in investment and all of the traffic-generating muscle of the MSN Network behind it, it is tough to call that fiscal state of affairs profitability — indeed, company officials are specifically prohibited from doing so because Slate's financials are not broken out in Microsoft's filings. But it is still a milestone for a general-interest magazine that publishes only on the Web.

So after almost seven years, Slate could be the exception that ends up disproving the rule that held that content sites generally serve as a trapdoor for good intentions and prodigious amounts of money. These days, Slate is enjoying a combination of growing ad revenue and, according to Nielsen/NetRatings, traffic that has doubled in the last year, to six million unique visitors a month.

Bill Gates, Microsoft's chairman and co-founder, is happy that one of the original conceits of Slate — that a magazine of ideas could make money if it did not have to pay for printing, manufacturing and distribution — may end up coming true. Even if it takes a long, long time.

"Over the years, as we have reviewed Slate and refined its strategy, we have always believed it would be a moneymaker," Mr. Gates said in an e-mail message. "The readership levels we have today have gotten us past break even and those levels will continue to grow."

Slate was hardly the bold 2.0 version of journalism promised by its founders. And throughout its development, the leadership of Slate declined to participate in dot-com mania and shied away from grandiose claims about putting ink-and-paper publications out of business.

But the site's skeptical, brainy challenges to the conventional wisdom were well received and its ability to summarize other media outlets made it a favorite desktop resource when big news occurred. Slate quickly became part of the conversation, at least among the politically inclined. And within the last year, it matched its reputation for Beltway deconstruction with more comprehensive cultural coverage that has brought greater numbers of women to the screen.

More recently, Slate responded to the war in Iraq with vigorous critiques of the military campaign and the accompanying media war.

But if Slate — along with Salon, another online magazine — managed to prove that the Web was a viable publishing medium, it never threatened to demonstrate that it was a lucrative one. True, other Web publications, built on the power of long-established print products, have struggled into the black, but Slate had further to go because it was its own thing, with no editorial legacy to leverage.

Now Slate is hoping to get noticed for something besides its tart analysis.

With annual revenues of under $7 million, any profits that Slate produces will not be the kind of results that drive Microsoft's stock price. Still, Slate's readership puts it below The New York Times on the Web and above Time.com, Time magazine's digital component. That is pretty fancy company for a site that started as a tabula rasa from Mr. Kinsley, the former editor of The New Republic magazine and a self-professed technophobe who did not know e-mail from junk mail when he agreed to leave his Beltway perch as a commentator on CNN's "Crossfire" and move to Microsoft's campus in Redmond, Wash.

Mr. Kinsley, who retired as editor in chief a year ago and was replaced by Jacob Weisberg, a longtime editor and writer at the site, ran Slate on the cheap from the start. Not only did Slate avoid an initial public offering, it also refrained from the lavish parties and wild spending sprees on acquisitions that helped ruin so many other Internet publications.

Slate hardly breaks the mold of magazines of ideas supported by men of means — The New Republic has several wealthy backers, including its owner, Martin Peretz, and The Weekly Standard is dependent on the largesse of Rupert Murdoch — but Mr. Kinsley said that approaching break-even status had editorial consequences.

"The only guarantee of editorial freedom in the long run is to be self-supporting," he said. "If you are perennially losing money, the only reason someone is going to own you is to be able to get their point of view out there."

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