Salon Reports First Quarter Fiscal Year 2007 Results

Salon Media Group, Inc. (OTCBB: SALN), an Internet media company, announced today a net loss of $0.5 million for its first quarter ended June 30, 2006, compared to a net loss of $0.1 million for its first quarter the year before.

Total revenues for the quarter ended June 30, 2006 were $1.5 million, compared to $1.6 million a year ago. While advertising revenues were $0.9 million for both periods, Salon Premium revenues declined 21% to $0.4 million when compared to $0.5 million a year ago from a drop in memberships.

On a non-GAAP pro forma basis, which excludes non-cash and non-recurring items, Salon recorded a $0.4 million net loss for the current quarter and a near-breakeven three thousand dollar net loss in the prior year quarter.

"We had a disappointing quarter, with flat advertising revenues and a continued decline in our Premium membership," stated Elizabeth Hambrecht, Salon's CEO and President. "However, we are very pleased that Chris Neimeth joined Salon as Publisher during the quarter, and he is taking steps to rebuild our ad sales team." She continued, "Also, our recent efforts to grow traffic have begun to bear fruit, with our average monthly unique visitors growing 34% in the June 2006 quarter as compared to a year ago."

A reconciliation of net loss attributable to common stockholders calculated in accordance with generally accepted accounting principles in the United States of America (GAAP) and pro forma net loss attributable to common stockholders is provided immediately following the consolidated statements of operations. These pro forma measures are not in accordance with, or an alternative for, GAAP and may be different from pro forma measures used by other companies. Salon believes that the presentation of pro forma results provides useful information to management and investors regarding underlying trends in its consolidated financial condition and results of operations. Readers of Salon's consolidated financial statements are advised to review and carefully consider the financial information prepared in accordance with GAAP contained in this press release and Salon's periodic filings with the Securities and Exchange Commission.

Future Periods Guidance:

Salon does not believe that the three months ended June 30, 2006 GAAP and non-GAAP financial results should be considered predictive of future quarter or year results.

Salon forecasts that it will most likely report a net loss for its quarter ending September 30, 2006 and cannot accurately predict its results for future quarters. Due to seasonality, Salon estimates that total revenues for its quarter ending September 30, 2006 will be approximately $1.6 million, with advertising sales comprising $1.0 million of the total. Currently, Salon has approximately $0.9 million of firm commitments to serve advertisements during the quarter ending September 30, 2006. Salon cannot accurately predict total revenues after September 30, 2006 owing to the relatively short time frame in which advertising orders are secured and when they run on our Website and the lack of significant long-term advertising orders. Salon anticipates Salon Premium revenues of approximately $0.4 for its quarter ending September 30, 2006.

About Salon Media Group, Inc.:

Founded in 1995, Salon is an Internet publishing company. Salon's award-winning journalism combines original investigative stories and provocative personal essays along with quick-take commentary and staff-written Weblogs about politics, technology, culture and entertainment. Committed to interactivity, the Website also hosts two online communities, Table Talk and The Well. Features in Salon's Website include the daily music download column Audiofile, Videodog video clips, the Daou Report, an opinionated guide to the blogosphere, and the ability to automatically submit Letters to the Editor.

"Safe Harbor" Statement under the U.S. Private Securities Litigation Reform Act of 1995: This press release contains certain "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are naturally subject to uncertainty and changes in circumstances. Actual results may vary materially from the expectations contained herein. The forward-looking statements contained herein include statements about future financial and operating results of Salon. Factors that could cause actual results to differ materially from those described herein include: the economic environment of the media industry; the difficulty in securing on-line advertising and subscriptions; uncertain revenue sources and the general economic environment. More detailed information about these factors is set forth in the reports filed by Salon with the Securities and Exchange Commission. Salon is under no obligation to and expressly disclaims any such obligation to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise. We do not believe that our reported results should be considered predictive of future period or full year results.