Internet journalism may not require black ink, but it certainly produces a lot of the red variety. Fortunately, this may be starting to change. A small but diverse range of journalistic sites are claiming to have crossed over into profitability -- or are near it anyway.

Of course, "profits" can appear with the help of creative accounting, by shifting costs like reporters' salaries or office overhead to a parent company. And not everybody online is even seeking immediate profit, at least not yet. For example, at TheStreet. com, the financial news site, editor-in-chief Dave Kansas says the company is plowing revenues back in to build up the site. On the other hand, Thomson Newspaper Corporation expects all twenty of its online operations to be profitable, and vice president Jonathan Sheer says that, with rare exceptions, they are. Thomson anticipates a $3 million annualized-rate profit, based on July's performance from its online ventures in 1998.

From the chain's flagship paper, Toronto's Globe and Mail, to The Advertiser, in Lafayette, Louisiana, all Thomson dailies put their classified ads online for an additional charge of 3 to 4 percent, and beyond that, a quarter of the papers put news online.

Managers at several sites say they are turning the corner. Their content varies as widely as the kind of audiences they seek and the business models each of them follows. But they all publish at least some original content online. None is simply a repackaged version of a parent newspaper, magazine, or broadcast. Here are some of them:

CNN Interactive (www.cnn.com)

Mark Bernstein, vice president and general manager, reports that this heavily visited advertising-supported site has shown periods of profitability in the past, and he expects it to be in the black for 1998 as well. As at all seven CNN television networks, profitability is defined as revenues exceeding costs, says Scott Woelfel, vice president and editor in chief for CNN Interactive.

CNN Interactive fields an editorial staff of 110. What draws the site's traffic -- 403 million page views in August; 34 million on September 11 alone, the day the Starr report was released -- is its volume of original content: news and analysis from CNN and elsewhere in the Time Warner empire. Woelfel estimates that at least half the site's content includes new reporting added to content adapted from TV. Some 10 percent of the content is completely original.

For the Cold War series currently running on CNN, CNN Interactive produced online originals on the space race, spies, and "the bomb." All together the site created more than forty-five "in-depth" sections, with original and repurposed reporting, last year, and will likely produce at least as many in 1998, with titles like Russia in Crisis and Target: Microsoft. These sections are produced by an in-depth editorial staff of seven.

The site also employs an "interactive producer" who is in charge of developing interactive components to complement other material -- interactive clickable maps, for example, and a "Quick Vote" feature for online polls. CNN Interactive is available in Portuguese, Spanish, and Swedish, and draws 25 percent of its traffic from outside the U.S. Among advertising clients are Web Street Securities, Salomon Smith Barney, and Universal Pictures.

National Journal's Cloakroom (www.cloakroom.com)

This is one of National Journal's creations, a members-only site that uses a blend of multimedia and interactive tools to cover the U.S. political scene. Founded in 1997, the site is already making a profit, says publisher Dan Solomon, through a combination of advertising and subscriptions. Cloakroom is available to subscribers of the $1,047-per-year National Journal.

This niche site is aimed at political insiders, including consultants and journalists, and its traffic is relatively low compared with CNN Interactive -- some 600,000 page views per month. But its readers appeal to advertisers like AETNA US Healthcare, the Kaiser Family Foundation, and the National Cable Television Association.

Cloakroom's "Ad Spotlight" illustrates its content strategy: it is an online guide to the world of political and issue advertising, combining reporting and analysis from all branches of the National Journal Group, along with some original content. For example, viewers can see recent political ads and accompanying news and analysis of them. Original content includes "The Buzz," a daily collection of commentary, analysis, and political scuttlebutt, and "Back Bench," quips, tips, and clips from campaigns around the country.

The Electric Times Union (www.timesunion.com)

The digital offspring of the Hearst-owned Times Union newspaper in Albany, New York, this site gets revenue primarily from a combination of classified and display advertising. It was the first newspaper-based site to publish its region's Multiple Listing Service -- the exclusive property database used by real estate agents in an area, says Dave White, advertising director for both the newspaper and the site. Now the site includes all classified ads from its print counterpart, and advertisers are charged 10 percent over the old newspaper-only price.

The Electric Times Union offers a blend of re-packaged content from the newspaper and original online reporting. A recent special report -- Hudson River Chronicles -- illustrates the approach. A three-member news team took an eighteen-day trip down the 306-mile historic river in September, reporting on a variety of waterway-connected issues. To the text published in the paper, the site added an expanded interactive photo gallery, audio interviews with various experts, and a reader forum.

Soon, The Electric Times Union will offer online Yellow pages. It already brings in some modest revenue from selling access to its online archives. The site is also investing heavily, says White, and plans to hire more editorial and business staff.

Channel 4000 (www.wcco.com)

This local TV site in Minneapolis-St. Paul showed its first profit in September 1997, making it the first of its kind to do so, says Reid Johnson, c.e.o. of the Internet Broadcasting Service (IBS), which designed and manages the site. An online offering of WCCO-TV and Radio (the CBS affiliate and am station in the twin cities) and MSC (Midwest Sports Channel), the site focuses on news, weather, sports, and business.

Revenue comes from three sources: ad banners, partnerships (that pay for links), and e-commerce. For example, the site has a marketplace section where it has created a number of "stores" for local vendors, and the site gets a percentage of sales. Content is culled from a variety of sources, including WCCO-TV and Radio; various strategic partners, including the Minnesota Twins, Mpls St Paul Magazine, Twin Cities Business Monthly, and more than twenty-five weekly community newspapers. An editorial staff that includes five full-time journalists also produces some original content.

In July, Channel 4000 won the National Press Club's first-ever Online Journalism Award for best news site. Judges cited Channel 4000's use of text, video, and hyperlinks in keeping flood victims informed during the 1997 spring floods in North Dakota and Minnesota. The site set its all-time traffic record with 4.2 million page views in September.

The Wall Street Journal Interactive Edition (www.wsj.com)

Wsj.com is not profitable just yet, but this closely watched site expects to be in the black some time in 1999. Tom Baker, vice president and general manager, says that subscriptions supply roughly half of the site's revenue. Wall Street Journal Interactive has more than 250,000 paying customers -- at $29 a year for subscribers to the print version of the Journal, or to Barron's or SmartMoney, and $49 a year for others. The site generates an equal amount of revenue from advertising. It fields more than fifty journalists, and they produce extensive original content.

This late but welcome sighting of profits in the online universe is tied to several developments. These include the continuing growth of the Internet as a mass audience medium (advertisers have noticed), the increasing availability of low-cost and fast Internet connections (enabling more multimedia and interactivity), and the creation of online news products that adapt more fully to the unique characteristics and capabilities of the online environment.

Most news sites still lose. And no single business model seems to offer the magic key to online success. But it's clear that the long-run financial viability of online news sites seems linked to the development of multiple revenue streams, including both banner and classified advertising revenues, and in some cases (especially for niche publications) subscriptions and electronic commerce. And that some sites have found a formula that works.

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