Online Leads Growth at NY Times

Ad revenue at the New York Times Co. rose slightly overall, but online ad revenue showed solid gains in the second quarter.

Overall, the company’s ad revenue rose 1 percent to $578.0 compared with $572.4 a year ago. Ad revenue on sites in its News Media Group, which includes nytimes.com, boston.com, rose by 25 percent over last year.

Total revenue for its online properties grew by 35 percent to $66.1 million, up from $49.0 million a year ago. That figure includes digital archives, newspaper and broadcast property Web sites, and About.com. Much of the online revenue is contributed by advertising, though the company also offers some subscription and fee services.

“Results in the quarter benefited from the redesign of NYTimes.com, which has provided enhanced features for readers and improved placements for advertisers,” said Janet L. Robinson, the New York Times Co.’s president and CEO. “At many of our sites we have added videos, podcasts and blogs that have been very well received by our readers and advertisers.”

About.com performed even better than the company had expected, with a 62.7 percent jump in revenue to $19.4 million, up from $12.0 million in last year’s second quarter. Operating profit at About.com increased to $7.3 million from $2.5 million. Much of About.com’s success is due to a 22 percent increase in visitors. The site reached 40 million unique users in June, Robinson said. That traffic allowed About.com to increase pageviews from 420 million in June 2005 to 543 million this June, according to Martin Nisenholtz, SVP of digital operations for New York Times Co. That growth has allowed the company to sell more ads, both CPM-based and CPC-based.

“About.com turned in another quarter of outstanding performance. All three of its revenue streams — display advertising, cost-per-click advertising and e-commerce — were strong in the quarter, resulting in an overall revenue increase of 63 percent,” she said.

The company has also layered in CPM price increases over the past year, increasing the price of its ads by 33 percent overall. Some of this was due to an increase in video inventory, which fetch higher rates than other ads, Nisenholtz said.

“As much inventory as we can generate, we can sell,” he said. “There’s a continued demand for rich media.”

Internet businesses now account for 7.7 percent of The New York Times Co.’s total revenue, compared to 5.8 percent in the same quarter a year ago, she said.

Total online and offline revenue in the News Media Group increased 0.5 percent to $800.2 million from $795.9 million. Advertising revenue decreased 0.7 percent, mainly due to weakness in print advertising at the New England Media Group partially offset by higher online revenue across the News Media Group.

The company’s Times Select online subscription offering has reached 513,000 subscribers since its launch in September. The company is planning an anniversary promotion for the service, which will include additional original content, video, and special archive opportunities, Robinson said.

Overall, diluted earnings per share (EPS) were flat at $.42. Total revenue rose 1.6 percent to $858.7 million, compared with $845.1 million last year, and net income rose slightly over last year to $61.3 million, compared with $60.8 million in the same period of 2005.

The company also announced today that it would close down its Edison, New Jersey plant and consolidate its metro New York printing at its new facility in Queens in 2008. The print edition of the Times will also shrink to 48 inches wide, reducing its available news space by 5 percent.

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