Belo Restructuring Will Streamline Interactive Staff

In another indication of how traditional media companies are seeking to capitalize on the growth of the their online divisions, Belo Corp. has begun consolidating its separate Belo Interactive division into its parent company.

The integration will result in a much more streamlined interactive staff handling national advertising sales from its Dallas headquarters, reshuffling its remaining staff to the offices of its various flagship divisions, said Belo Vice President Carey Hendrickson.

While the company is not yet disclosing details of the changes, Hendrickson confirmed the reintegration of Belo Interactive, which achieved positive EBITDA for the first time in 2004, is already underway and will be completed in the first quarter of 2005.

“We have completed a strategic review begun in March,” Hendrickson said. “Having now taken Belo Interactive to the break-even point, it is no longer important for us to separate out our online activities to focus on them properly. We believe this is the best way going forward.”

The first word of the shakeup came from Belo Chairman Robert Decherd’s presentation at Credit Suisse First Boston’s Media Week Conference held last week. Decherd said that the goal for the restructuring is “to maximize revenue growth and ensure the staying power of the company’s very important classified verticals.”

Classified advertising at The Dallas Morning News — still managing the fallout of having overstated its print subscription numbers this fall — is one such vertical. Job postings on the newspaper’s Web site are the leading revenue generator, accounting for 47 percent of its total earnings in online classifieds. Offline, employment ads account for 27 percent of its print classified revenues, ranking second behind automotive, which accounts for 35 percent, according to Hendrickson.

An industry source that does business with a number of media companies nationwide, said the reintegration signals Belo’s attempt both to bridge that performance gap between on- and offline and to tidy up the balance sheet of such individual holdings.

“With their traditional franchises declining in terms of circulation and viewership, integrating the interactive division pads Belo’s overall numbers more,” said the source, who asked not to be named. “The move also addresses a tension between the staff of its media assets, where traditional media were losing ground, while the interactive counterpart was growing. The Dallas Morning News is a great example.”

Belo’s decision coincides with a similar move by ESPN, which is reportedly restructuring its online sales force under its television business umbrella, a process expected to be completed by January.

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