Ad slump spurs Slashdot to experiment

When Slashdot increases ad sizes, it plans to introduce a subscription service for people who want to pay for an ad-free version. Jeff Bates, who runs the site, said Thursday that Slashdot will launch the new ads and subscription service early next year. The cost of the service has yet to be determined.

"The larger ad formats are coming about really because, as Bob Dylan put it, 'The times, they are a'changing,'" Bates wrote in an e-mail interview. "While we'll still be mostly featuring the 468-by-60 banner, we're trying to work with our advertisers and see how we can work together. Rest assured though, we'll still be only having one ad per page."

Slashdot's move to a larger ad format and a subscription service mirrors the decisions of many companies attempting to capture new revenue in a battered dot-com economy. CNET Networks, publisher of News.com, introduced the new ad units earlier this year, followed by other online media outlets such as The New York Times and Salon.com, which offers a subscription service free of advertising.

Tamara Gaffney, senior product manager at Nielsen/NetRatings, said larger ad units, such as the so-called skyscraper ads, are designed to capture the viewers' attention and draw them into the intended message. Such formats are also used to communicate more information in the ad itself rather than relying on viewers to click through the advertisement.

Larger ad units "have higher click rates, but that may be a fleeting phenomenon," Gaffney said. "You don't know if this is going to last. The bigger question is will they result in higher awareness, which is the primary objective for most advertising."

Slashdot's parent company, VA Linux Systems, has also been struggling. It once sold Linux servers when the operating system was sweeping the computing industry, but the collapse of the Internet economy forced VA to abandon the hardware business in June. It's now focused on selling proprietary improvements to its collaborative programming software.

Slashdot, however, has made aggressive moves to partner with other companies. In April, the site signed a deal with Digital Paths to offer its content on Palm's handheld computers. A month earlier, the company struck an agreement to let mobile services company Quios distribute its news and commentary to handheld devices.

In a message to readers, Slashdot founder Rob Malda said filling banner-ad space has been difficult this year.

"Simply selling the banner ads you see on top of each page isn't going to be enough to keep us afloat if we keep growing," Malda said in a message posted Monday. "I could say 'no' to changes like these. But Slashdot is now four years old...and I want it to still be here four years from now."

News.com's Stephen Shankland contributed to this report.