The New York Times Company is a leading media company that publishes popular newspapers The New York Times, The International Herald Tribune, The Boston Globe and 15 other daily newspapers. The Company also owns nine network-affiliated television stations and two New York radio stations. NYT owns approximately 35 Web sites, including NYTimes.com, Boston.com and About.com. The Company’s revenues for 2006 were $3.3 billion. The Company has decided to sell the Broadcast Media Group and radio stations to focus on print and digital media.
NYT is in a transition phase, moving from print media to the online platform. I wrote an earlier piece on NYT, when private equity buy-out speculations had heated up. In this piece, we will assess their digital media strategy.
According to Nielsen//NetRatings, NYT is ranked 11th in unique visitors. The company website attracted 42.56 million unique visitors in January 2007. The strategy of the company to focus on online business is paying off. The online revenues of the company have grown from $118 million (4% of total company revenues) in 2004 to $274 million (8% of total company revenues) in 2006.
NYT is working on organizing its online business on the basis of key verticals, which will allow the company to extend its popular classifieds sections like luxury real estate, travel, and entertainment, increase user engagement and aid in monetization of the sites. The recent partnership with Monster to build its online recruitment product offering is a step in the right direction as it will allow the Company to be present in a key vertical, clearly one of the biggest revenue generators online. [Read Newspapers Losing Verticals to Online]
About.com with over 47.5 million average monthly unique visitors worldwide is one of the top 15 most visited websites and earns 50% of its revenues through cost-per-click advertising. The site witnessed a 50% jump in revenues to $80 million in 2006 and is among the best sites in health, food, and education. The projected increasing of the number of guides to 700 by end 2007 will enable About.com to increase traffic and grow revenues significantly.
NYT expects online revenues to be $350 million in 2007 and grow by 30% year over year in the medium term.
The development and successful launch of a local search offering and mobile websites in New York, Boston and Gainesville and development of new tools and services like data mining and web analytics are evidences of the steps taken by the company in tecnical advancements.
Keeping in line with its business strategy, NYT has made strategic investments in “Indeed” a vertical meta-search for help wanted (14% ownership), “RootMarkets” a mortgage lead generation company (2.1%), “Day Life” a news aggregation site (13.3%), “NewsStand” (8.2%), “Wide Orbit” (8%) and “FM Publishing” (3.3%) and acquired “Baseline Studios” (a B2B supplier of entertainment information), which will hopefully pay off in the long term. In the short term, they have made invaluable contributions to the organization’s learning about new media.
NYT experienced a 2.1% fall in its total advertising revenues and a 1.8% growth in circulation revenues for the month of January 2007. The online business, however, witnessed a growth of 26.2% and About.com grew by 22.5% in the same period. Clearly, online media is the growth driver and the company’s investments and strategies seem to be on the right track.
These are positive indications and many within the industry believe that NYT has finally got its strategy right and the change will be visible from 2008 onwards. They can also seriously expand their online position by rolling up various verticals, as well as adopting a more aggressive strategy wrt user generated content, by encouraging more Anchor Content – User Content / Pro-Am interplay.
This segment is a part in the series : NYT