EXHIBIT 4.2.78
                                                                  --------------

                          SECURITIES PURCHASE AGREEMENT


            THIS SECURITIES PURCHASE AGREEMENT (this "Agreement") is made as of
December 30, 2003 between Salon Media Group, Inc., a Delaware corporation (the
"Company"), and each of the signatories hereto (each, the "Purchaser"). The
parties hereby agree as follows:

                                     RECITAL
                                     -------

            On the terms and subject to the conditions set forth herein,
Purchaser is willing to purchase from the Company, and the Company is willing to
sell to Purchaser, the number shares of the Company's Series C Preferred Stock
(the "Shares"), and a warrant substantially in the form attached hereto as
Exhibit A (the "Warrant") to purchase the number of shares of the Company's
Common Stock (the "Warrant Shares"), set forth opposite Purchaser's name on
Schedule A hereto.

                                    AGREEMENT
                                    ---------

            NOW, THEREFORE, in consideration of the foregoing, and the
representations, warranties, and conditions set forth below, the parties hereto,
intending to be legally bound, hereby agree as follows:

            1. Sale and Issuance of the Shares; Consideration. Subject to the
terms and conditions hereof, at the Closing (as defined below), the Company will
issue and sell to the Purchaser and the Purchaser will purchase from the Company
the Shares at a purchase price of $800 per share (the "Purchase Price") and, for
no additional consideration, the Warrant. In consideration for the Shares and
Warrant, the Purchaser at the Closing will pay the appropriate purchase price by
delivery of a check, payable to the order of the Company, or by wire transfer at
such Closing. Purchaser acknowledges that, concurrently with the initial
Closing, the Company will also issue Shares in connection with the conversion of
all principal and accrued interest outstanding under certain promissory notes,
as set forth on Schedule A hereto.

            The Purchaser shall not sell or transfer any of the Shares, Warrant
or Warrant Shares (collectively, the "Securities") other than to an affiliate of
Purchaser prior to the first anniversary of the Closing Date. Any such affiliate
shall be subject to such restriction on transfer. For the purposes of this
Agreement, an "affiliate" shall mean any partner, limited partner or member of
Purchaser or any person or entity that directly or indirectly through one or
more intermediaries controls or is controlled by or is under common control with
Purchaser.

            2. Agreement of the Company and Purchaser. The Company and the
Purchaser, having adverse interests and as a result of arm's length bargaining,
agree that:

                        (1) Neither the Purchaser nor any affiliated company has
rendered any services to the Company in connection with this Agreement;

                        (2) The Warrant is not being issued as compensation;

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                        (3) The aggregate fair market value of the Shares, if
issued apart from the Warrant and the aggregate fair market value of the
Warrant, if issued apart from the Shares, are set forth herein; and

                        (4) All tax returns and other information returns of
each party relative to this Agreement and Warrant issued pursuant hereto shall
consistently reflect the matters agreed to in (1) through (3) above.

            3. Closing; Delivery.

                  3.1 Closing. The initial closing of the sale and purchase of
the Shares and the Warrant (the "Closing") shall take place at the offices of
Gray Cary Ware & Freidenrich LLP, 2000 University Avenue, East Palo Alto,
California 94303 on the date hereof or such later date as shall be mutually
acceptable to the Company and the Purchaser (the "Closing Date"). At any time
after the date hereof, the Company may sell all authorized but unissued Shares
not sold at the initial Closing to subsequent purchasers, including the issuance
of a Warrant for no additional consideration. Such purchases of Shares and
Warrants shall be made by each subsequent purchaser by executing counterpart
signature pages to this Agreement, making such purchaser a party and bound by
the terms and conditions of this Agreement. Any shares of Series C Preferred
Stock sold pursuant to this Section 3.1 shall be deemed to be "Shares" for all
purposes under this Agreement and any purchasers thereof shall be deemed to be
"Purchasers" under this Agreement. Each sale of additional Shares and Warrants
pursuant to this Section 3.1 shall be deemed a "Closing" for purposes hereunder.
Schedule A to this Agreement shall be updated to reflect the number of Shares
and Warrants purchased at each Closing and the parties purchasing such Shares
and Warrants.

                  3.2 Delivery. At Closing, on the terms and subject to the
conditions hereof, Purchaser shall pay to the Company, by check or wire transfer
of immediately available funds, by delivery of evidence of the indebtedness of
the Company to be cancelled, the aggregate Purchase Price, and in exchange for
and upon receipt or confirmation of such payment, the Company will issue and
deliver to Purchaser a stock certificate representing the Shares purchased by
Purchaser and a Warrant for the Warrant Shares.

            4. Representations and Warranties of the Company. The Company hereby
represents and warrants to the Purchaser that:

                  4.1 Organization and Standing. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has all requisite corporate power and authority to carry
on its businesses as now conducted and as proposed to be conducted.

                  4.2 Corporate Power. The Company has all requisite corporate
power necessary for the authorization, execution and delivery of this Agreement
and the Warrant, to sell and issue the Shares hereunder, and to carry out and
perform all of its obligations under the terms of this Agreement, the Warrant
and the Certificate of Designation of Preferences and Rights of the Series C
Preferred Stock (the "Certificate of Designation"), and to carry on its business
as presently conducted and as presently proposed to be conducted, and such other
agreements and

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instruments. Each of the Agreement and the Warrant is a valid and binding
obligation of the Company, enforceable in accordance with its terms, except as
the same may be limited by bankruptcy, insolvency, moratorium, and other laws of
general application affecting the enforcement of creditors' rights.

                  4.3 Capitalization. As of November 30, 2003, the authorized
capital stock of the Company is Fifty million (50,000,000) shares of Common
Stock and Five million (5,000,000) shares of Preferred Stock, and there are
issued and outstanding (i) 14,155,276 shares of the Common Stock, (ii) 819
shares of Series A Preferred Stock, (iii) 125 shares of Series B Preferred
Stock, (iv) no shares of Series C Preferred Stock, (v) warrants to purchase an
aggregate of 18,352,954 shares of Common Stock, and (vi) options to purchase
4,981,289 shares of Common Stock granted to employees pursuant to the Company's
1995 Stock Option Plan. All such issued and outstanding shares have been duly
authorized and validly issued, are fully paid and nonassessable, and were issued
in compliance with all applicable state and federal laws concerning the issuance
of securities.

                  4.4 Authorization.

                        (1) Corporate Action. All corporate action on the part
of the Company, its officers, directors and stockholders necessary for the sale
and issuance of the Shares and the authorization, execution and performance of
the Company's obligations hereunder and under the Warrant has been taken.

                        (2) Valid issuance. The Securities, when issued in
compliance with the provisions of this Agreement and the Warrant, will be
validly issued, fully paid and nonassessable and will be free of restrictions on
transfer other than restrictions under the Warrant and under applicable federal
and state securities laws.

                  4.5 Compliance with Other Instruments. The execution, delivery
and performance of and compliance with this Agreement or the Warrant by the
Company, and the issuance and sale of Securities, will not result in any
violation of the Certificate of Incorporation or Bylaws of the Company.

                  4.6 Offering. In reliance on the representations and
warranties of the Purchaser in Section 6 hereof, the offer, sale and issuance of
Securities in conformity with the terms of this Agreement and the Warrant will
not result in a violation of the Securities Act of 1933, as amended (the
"Securities Act"), or any state securities laws, including the qualification or
registration requirements of applicable blue sky laws.

                  4.7 Company Reports; Disclosure

                        (a) Company Reports. For the purposes of this Agreement,
the term "Company Reports" shall mean, collectively, each registration
statement, report, proxy statement or information statement filed with the
Securities and Exchange Commission (the "SEC") since January 1, 1999, in the
form (including exhibits, annexes and any amendments thereto) filed with the
SEC. As of their respective dates, the Company Reports complied in all material
respects with the requirements of the Securities Act and the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and did not contain any untrue
statement of a material fact or omit to state

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a material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances in which they were made,
not misleading. Nothing has occurred since November 13, 2003 which would require
the filing of any additional report or of any amendment to any of the Company
Reports with the SEC, or which would cause any of the Company Reports to contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements made therein,
in light of the circumstances in which they were made, not misleading.

                        (b) Disclosure. No representation or warranty by the
Company in this Agreement, or in any document or certificate furnished or to be
furnished to the Purchaser pursuant hereto or in connection with the
transactions contemplated hereby, when taken together, contains or will contain
any untrue statement of a material fact or omits or will omit to state a
material fact necessary to make the statements made herein and therein, in the
light of the circumstances under which they were made herein and therein, in the
light of the circumstances under which they were made, not misleading. The
Company has either filed with the SEC or fully provided the Purchaser with all
the information necessary for the Purchaser to decide whether to purchase the
Shares.

            5. Representations and Warranties of the Purchaser and Restrictions
on transfer Imposed by the Securities Act. Purchaser represents and warrants to
the Company as to itself as follows:

                  5.1 Power. Purchaser has all requisite corporate power
necessary for the authorization, execution and delivery of the Agreement and
Warrant to which it is a party. Each of the Agreement and the Warrant to which
the Purchaser is a party is a valid and binding obligation of the Purchaser,
enforceable against the Purchaser in accordance with its terms, except as the
same may be limited by bankruptcy, insolvency, moratorium, and other laws of
general application affecting the enforcement of creditors' rights.

                  5.2 Authorization. All corporate action on the part of the
Purchaser, its officers, directors and stockholders necessary for the
authorization, execution and performance of the Purchaser's obligations
hereunder and under the Warrant to which it is a party have been taken.

                  5.3 Compliance with Other Instruments. The execution, delivery
and performance of and compliance with this Agreement and the Warrant to which
Purchaser is a party will not result in any violation of or default in any
material respect under the terms of any mortgage, indenture, contract,
agreement, instrument, judgment or decree to which the Purchaser is a party or
is otherwise subject.

                  5.4 Consents. No consent, approval or authorization of or
designation, declaration or filing with any governmental authority or other
third party on the part of the Purchaser is required in connection with the
valid execution and delivery of the Warrant to which it is a party.

                  5.5 Investment Intent. This Agreement is made with the
Purchaser in reliance upon the Purchaser's representation to the Company,
evidenced by the Purchaser's execution of

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this Agreement, that the Purchaser is acquiring the Shares for investment for
the Purchaser's own account, and not with a view to, or for resale in connection
with, any distribution or public offering thereof within the meaning of the
Securities Act.

                  5.6 Shares Not Registered. The Purchaser understands and
acknowledges that the offering of the Shares and Warrant issued pursuant to this
Agreement will not be registered under the Securities Act or qualified under
applicable blue sky laws on the grounds that the offering and sale of securities
contemplated by this Agreement are exempt from registration under the Securities
Act and exempt from qualifications available under applicable blue sky laws, and
that the Company's reliance upon such exemptions is predicated upon the
Purchaser's representations set forth in this Agreement. The Purchaser
acknowledges and understands that, except for transfers to Affiliates of the
Purchaser, the Securities must be held for at least 12 months after Closing and
thereafter indefinitely unless the Securities are registered under the
Securities Act and qualified under applicable blue sky laws or an exemption from
such registration and such qualification is available.

                  5.7 Knowledge and Experience. The Purchaser (i) has such
knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risks of the Purchaser's prospective investment in the
Shares; (ii) has the ability to bear the economic risks of the Purchaser's
prospective investment; and (iii) has not been offered the Shares by any form of
advertisement, article, notice or other communication published in any
newspaper, magazine, or similar media or broadcast over television or radio, or
any seminar or meeting whose attendees have been invited by any such media.

                  5.8 Accredited Investor. The Purchaser is an "accredited
investor" as that term is defined in Rule 501(a) under the Securities Act.

                  5.9 Legends. Each certificate representing the Shares may be
endorsed with the following legends:

                        (1) Federal Legend. THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT") AND ARE "RESTRICTED SECURITIES" AS DEFINED IN RULE 144
PROMULGATED UNDER THE ACT. THE SECURITIES MAY NOT BE SOLD OR OFFERED FOR SALE OR
OTHERWISE DISTRIBUTED EXCEPT (i) IN CONJUNCTION WITH AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SHARES UNDER THE ACT OR (ii) IN COMPLIANCE WITH RULE 144, OR
(iii) PURSUANT TO AN OPINION OF COUNSEL, THAT SUCH REGISTRATION OR COMPLIANCE IS
NOT REQUIRED AS TO SAID SALE, OFFER OR DISTRIBUTION.

                        (2) Other Legends. Any other legends required by
applicable state blue sky laws. The Company need not register a transfer of
legended Shares, and may also instruct its transfer agent not to register the
transfer of the Shares, unless the conditions specified in each of the foregoing
legends are satisfied.

                  5.10 Removal of Legend and Transfer Restrictions. Any legend
endorsed on a certificate pursuant to subsection 5.9(1) and the stop transfer
instructions with respect to such

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legend Shares shall be removed, and the Company shall issue a certificate
without such legend to the holder of such Shares if such Shares are registered
under the Securities Act and a prospectus meeting the requirements of Section 10
of the Securities Act is available or if such holder satisfies the requirements
of Rule 144(k).

            6. Conditions to Closing.

                  6.1 Conditions to the Purchaser's Obligations. The obligation
of the Purchaser to purchase the Securities at the Closing is subject to the
fulfillment to the Purchaser's satisfaction, on or prior to the Closing Date, of
the following conditions, any of which may be waived by the Purchaser.

                        (1) Representations and Warranties Correct; Performance
of Obligations. The representations and warranties made by the Company in
Section 4 hereof shall be true and correct when made, and shall be true and
correct in all material respects on the Closing Date with the same force and
effect as if they had been made on and as of said date (except to the extent any
such representation or warranty expressly speaks of an earlier date). The
Company shall have performed in all material respects all obligations and
conditions herein required to be performed or observed by it on or prior to the
Closing Date.

                        (2) Warrant. The Company shall have executed the
Warrant.

            7. Conditions to Obligations of the Company. The Company's
obligation to sell and issue the shares at the Closing is subject to the
fulfillment to the satisfaction of the Company on or prior to the Closing Date
of the following condition, which may be waived by the Company: The
representations and warranties made by the Purchaser in Section 5 hereof shall
be true and correct when made, and shall be true and correct on the Closing Date
with the same force and effect as if they had been made on and as of said date
(except to the extent any such representation or warranty expressly speaks of an
earlier date). The Purchaser shall have performed in all material respects all
obligations and conditions herein required to be performed or observed by it on
or prior to the Closing Date.

            8. Affirmative Covenants of the Company - Registration Rights. The
Company represents that, within two hundred fifteen (215) days from the initial
closing, the Company will file a registration statement covering the shares of
Common Stock issued upon conversion of the Shares, and will use its best efforts
to cause such registration statement to be declared effective as soon as
possible thereafter.

            9. Miscellaneous.

                  9.1 Governing Law. This Agreement shall be governed in all
respects by the laws of the State of California.

                  9.2 Survival. The representations, warranties, covenants and
agreements made herein shall survive the Closing of the transactions
contemplated hereby, notwithstanding any investigation made by the Purchaser.
All statements as to factual matters contained in any certificates or other
instrument delivered by or on behalf of the Company pursuant hereto or in

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connection with the transactions contemplated hereby shall be deemed to be
representations and warranties by the Company hereunder as of the date of such
certificate or instrument.

                  9.3 Successors and Assigns. Except as otherwise expressly
provided herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors, assigns, heirs, executors and administrators of
the parties hereto.

                  9.4 Entire Agreement. This Agreement and the other documents
delivered pursuant hereto constitute the full and entire understanding and
agreement between the parties with regard to the subjects hereof and thereof and
they supersede, merge and render void every other prior written and/or oral
understanding or agreement among or between the parties hereto.

                  9.5 Notices, etc. All notices and other communications
required or permitted hereunder shall be in writing and shall be delivered
personally, mailed by first class mail, postage prepaid, or delivered by courier
or overnight delivery, addressed (a) if to the Purchaser, to the address such
Purchaser shall have furnished to the Company in writing or (b) if to the
Company, at 22 Fourth Street, 16th Floor, San Francisco, CA 94103 Attention:
Chief Financial Officer, or at such other address as the Company shall have
furnished to the Purchaser in writing. Notices that are mailed shall be deemed
received five days after deposit in the United States mail.

                  9.6 Severability. In case any provision of this Agreement
shall be found by a court of law to be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions of this
Agreement shall not n any way be affected or impaired thereby.

                  9.7 Finder's Fees and Other Fees.

                        (1) The Company (i) represents and warrants that it has
retained no finder or broker in connection with the transactions contemplated by
this Agreement and, (ii) hereby agrees to indemnify and to hold the Purchaser
harmless from and against any liability for commission or compensation in the
nature of a finder's fee to any broker or other person or firm (and the costs
and expenses of defending against such liability or asserted liability) for
which the Company, or any of its employees or representatives, are responsible.

                        (2) Each Purchaser (i) represents and warrants that it
has retained no finder or broker in connection with the transactions
contemplated by this Agreement and (ii) hereby agrees to indemnify and to hold
the Company harmless from and against any liability for any commission or
compensation in the nature of a finder's fee to any broker or other person or
firm (and the costs and expenses of defending against such liability or asserted
liability) for which such Purchaser, or any of its employees or representatives,
are responsible.

                  9.8 Expenses. The Company and each Purchaser shall each bear
their own expenses and legal fees in connection with the consummation of this
transaction.

                  9.9 Titles and Subtitles. The titles of the sections and
subsections of this Agreement are for convenience of reference only and are not
to be considered in construing this Agreement.

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                  9.10 Non-Recourse. No partner, limited partner, member,
officer, director, shareholder, employee or agent or other holder of an
ownership interest in any party to this Agreement shall have any liability in
respect of any such party's obligations under this Agreement by reason of his or
her status as such partner, limited partner, member, officer, director,
shareholder, employee or agent or other holder of an ownership interest in any
party to this Agreement. The obligations under this Agreement shall be limited
to the assets of each of the Purchaser and shall not exceed the Purchase Price.

                  9.11 Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be an original, but all of which
together shall constitute one instrument.

                  9.12 Delays or Omissions. No delay or omission to exercise any
right, power or remedy accruing to the Company or to any holder of any
securities issued or to be issued hereunder shall impair any such right, power
or remedy of the Company or such holder, nor shall it be construed to be a
waiver of any breach or default under this Agreement, or an acquiescence
therein, or of or in any similar breach or default thereafter occurring; nor
shall any delay or omission to exercise any right, power or remedy or any waiver
of any single breach or default be deemed a waiver of any other right, power or
remedy or breach or default theretofore or thereafter occurring. All remedies,
either under this Agreement, or by law otherwise afforded to the Company or any
holder, shall be cumulative and not alternative.

                  9.13 Attorneys' Fees. If any action at law or in equity is
necessary to enforce or interpret the terms of any of the Transaction
Agreements, the prevailing party shall be entitled to reasonable attorneys'
fees, costs and disbursements in addition to any other relief to which such
party may be entitled.

                  9.14 Venue. The parties hereby irrevocably submit to the
jurisdiction of the courts of the State of California and the Federal courts of
the United States of America located in the State of California solely in
respect of the interpretation and enforcement of the provisions of the Warrant,
and in respect of the transactions contemplated hereby, and hereby waive, and
agree not to assert, as a defense in any action, suit or proceeding for the
interpretation or enforcement hereof or of any such document, that it is not
subject thereto or that such action, suit or proceeding may not be brought or is
not maintainable in said courts or that the venue thereof may not be appropriate
or that the Warrant may not be enforced in or by such courts, and the parties
hereto irrevocably agree that all claims with respect to such action or
proceeding shall be heard and determined in such a California state or Federal
court. The parties hereby consent to and grant any such court jurisdiction over
the person of such parties and over the subject matter of such dispute and agree
that mailing of process or other papers in connection with any such action or
proceeding in the manner provided in Section 9.5 hereof shall be valid ad
sufficient service thereof.

            [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

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            IN WITNESS WHEREOF, the parties hereto have executed this Securities
Purchase Agreement as of the date first written above.


                                     SALON MEDIA GROUP, INC.


                                     By: /s/ Elizabeth Hambrecht
                                         ---------------------------------------
                                             Elizabeth Hambrecht
                                             President & Chief Financial Officer






























          [COUNTERPART SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT]

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                                     PURCHASER


                                     By:  /s/ John Warnock
                                         ---------------------------------------
                                     Name:  John Warnock
                                     Title:
                                            ------------------------------------







































          [Counterpart Signature Page to Securities Purchase Agreement

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                                   SCHEDULE A
                                   ----------


<TABLE><CAPTION>
                                                 Purchase Price /
                                               Principal + Accrued
Purchaser / Noteholder                               Interest          Shares      Warrant Shares
----------------------                               --------          ------      --------------
<S>                                                 <C>                   <C>        <C>
Alacrity Management Corporation                      28,800.00             36

Arthur H. Bruno                                       3,200.00              4

Brian Dougherty                                      53,600.00             67

Elaine McKay Family Partnership                     126,400.00            158

Eu Revocable Trust                                   24,800.00             31

GCWF Investment Parters II                           10,400.00             13

HAMCO Capital Corporation                           101,600.00            127

Ironstone Group, Inc                                674,400.00            843

John Warnock                                        500,000.00            625        1,500,000

John Warnock                                      2,279,200.00          2,849

Octavia, LLC                                        172,800.00            216

Richard R. Jeffrey                                      800.00              1

Shea Ventures LLC                                   357,600.00            447

E&M RP Trust                                        102,400.00            128

The Hambrecht 1980 Revocable Trust                   51,200.00             64

The Sarah & William Hambrecht Foundation             86,400.00            108

The Timken Living Trust U/A/D 9/13/99                28,800.00             36

Wenner Media LLC                                    200,000.00            250

William E Mayer Holdings, Inc                        40,800.00             51

WR Hambrecht+Co LLC                                  51,200.00             64
                                             ----------------------------------------------------

TOTAL                                             4,894,400.00          6,118        1,500,000
</TABLE>