Ad sales on Web sites owned by The New York Times Company jumped 30 percent in 2005’s fourth quarter, but that didn’t keep profits from plunging 41 percent after a $35 million staff reduction charge.
Overall ad revenues rose more modestly, to 6.2 percent. Ad rates rose by 5 percent in 2005, and will do so again in 2006, executives said.
About.com, acquired in March 2005, continues to impress. The unit brought in $16.7 million in revenue for the quarter, and showed an operating profit of $5.2 million. For the full year, revenues came in at $52 million (of which $43.9 million went to the New York Times Company), compared with $36 million in 2004, when it was owned by Primedia.
In comments during the Q4 earnings call, CFO Leonard Forman described the purchase as having a “huge pay-off.” “Many people viewed our investment in About.com as a highly risky investment. We didn’t,” he said. “We continue to expect to see leverage on both rate and volume in 2006.”
The company expects the unit to post double-digit revenue and profit growth next year. It will increase ad rates for all digital media.
Additionally, the company used ad inventory on both NYTimes.com and About.com to cross-promote its own subscription services.
Earnings per share for The Times Company were $0.45, compared with $0.75 for the year-ago period, on profits of $64.8 million. Full-year profits dropped 11.2 percent, to $259.8 million.
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