More NewsNYTCo: Digital Ad Revenue Strong in Q4

NYTCo: Digital Ad Revenue Strong in Q4

A 30 percent increase in digital ad revenue didn't keep profits from plunging after a big staff reduction charge.

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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