Web Buoys a Weak Quarter for NYT

It’s become a refrain in newspaper earnings reports: Digital revenues provide one of the few bright spots in an overall dreary financial picture.

So it is today with The New York Times Company’s third quarter numbers, in which digital revenues soar while other units were relatively flat.

Web sites in the company’s News Media Group — including NYTimes.com and Boston.com — brought in ad revenues 31 percent higher than in the year-ago quarter. About.com results were also particularly strong, with Q3 profits of $3.8 million on revenue of $14.2 million. That’s a 67 percent jump from the year-ago period.

“We knew when we bought the company that [About.com] was underleveraged in terms of rates,” said Martin Nisenholtz, CEO of New York Times Digital. “We have increased rates, but we think there’s more to do. We’re pushing both sides of the business model — volume and rate — to get the numbers we’re able to report.”

Taken together, NYT Co.’s digital properties accounted for 35 million monthly unique visitors in September, despite the fact that many of its popular op-ed columnists went behind a paid wall with the launch of TimesSelect on September 19.

President and CEO Janet Robinson attributed the jump in traffic to public interest in hurricane Katrina and improved search engine optimization. Nisenholtz repeatedly emphasized the company’s SEO refinements as well.

Speaking on TimesSelect, he said the initial reader response has been good, and he predicted the market would adopt such a “highly differentiated, specialized tiering approach.”

“I think we’ve hit on a model that is well balanced to provide advertising revenue increases as we’ve seen them over the last several years, as well as diversified [revenue] on the pay side,” he said.

On the topic of NYT Co.’s recent investment in job listings aggregator Indeed.com, Nisenholtz noted the company is now distributing Indeed listings to About.com.

“The strategic synergy is already clear,” he said. “We’re helping it grow through this incredible engine we have at About. We don’t know what’s going to happen with this meta-research model. [Our goal] is to be a part of what we believe is a very important trend. [We’re] looking at additional opportunities in meta-search as well.”

Overall net income for the company was down by half, as reflected in per-share earnings of $.16 compared with $.33 in Q3 2004. Revenues were actually up slightly, from $773 million to $791 million; but so were costs — due to a hit from expenses related to job cuts — resulting in a slight drop in operating profit. Ad revenues grew four percent year over year, and were up 2.9 percent for the first nine months of the year.

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