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Originally published Tuesday, November 18, 2008 at 12:00 AM

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Online news site Crosscut poised to switch to nonprofit

Pacific Northwest regional news Web site Crosscut.com, founded by David Brewster, likely will morph into a nonprofit, as online advertising revenue has fallen short of projections.

Seattle Times staff reporter

Crosscut.com, David Brewster's commercial venture into the world of Web journalism, is poised to make a shift to nonprofit status, a mere 18 months after its online debut.

"I'm very optimistic about this nonprofit model as a way out of the trap" of having to rely on online advertising for financial sustenance, said Brewster, who also founded Seattle Weekly and the nonprofit cultural center Town Hall.

Crosscut, a Seattle-based news outlet with a regional scope, was launched during a boom in online advertising, but ad revenue forecasts projections have not panned out.

A projected slow growth in online advertising, current low rates for such ads and the challenge of raising investment capital in this economic climate all have contributed to Crosscut possibly morphing into a nonprofit, Brewster said.

"The long wait (to become profitable) is treacherous for any startup operating in this difficult economic time," said Brewster, Crosscut's publisher and one of its 25 owners. "You're really flirting with running out of money and patience, and not generating enough momentum to keep investors on board."

As a nonprofit, Crosscut would continue to accept advertising but also would solicit tax-deductible donations from individuals and grants from organizations to help finance its journalism, which Brewster describes as nonpartisan and in the public interest.

Crosscut has seven full- and part-time staffers, including Brewster and an associate publisher, plus a cadre of freelance writers, many of whom have previous professional relationships with Brewster.

To conserve cash, Crosscut last week temporarily eliminated two full-time positions, editor Chuck Taylor and the site's chief technology officer, and cut hours for others.

The shift to nonprofit status is predicated on board approval next month and obtaining enough donations to get off the ground. During the transition, Crosscut plans to continue publishing with a fill-in editor, said Brewster, who hopes the reorganization can be complete in a couple of months.

Crosscut links to news stories from professional news operations, such as The Seattle Times and the Seattle Post-Intelligencer, while at the same time offering original content produced by its own writers. But it has been a challenge for Crosscut to pay those journalists for their work with revenue from local online advertising so thin.

Barry Mitzman, a Seattle University professor of strategic communications who advised Brewster during Crosscut's startup, said the content has benefited from Brewster's deep ties in the community.

"David is a brilliant impresario," he said. "His energy, enthusiasm and vision enlist people's collaboration. To a large degree, that's how Crosscut has been able to come as far as it has."

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National Public Radio proves a nonprofit model can work for news and information, said Mitzman, a former producer and program host on KCTS Channel 9.

He said the nonprofit model has been discussed broadly even as an option for reviving the profit-starved newspaper industry, which is seeing huge financial losses as advertising slumps and more readers consume their news online.

Brewster said: "I think that finding a way in which Web journalism is supported by more than advertising is going to be critical for local journalism" to thrive.

"Journalism has financial problems, but it also has trust and bonding problems with its readers," he said. "The public needs to feel that journalism is a public asset, a public benefit, rather than something that strip-mines money from advertisers."

A nonprofit, community-owned Crosscut might be one path toward rebuilding that bond, he said.

Stuart Eskenazi: 206-464-2293 or seskenazi@seattletimes.com

Copyright © 2008 The Seattle Times Company

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