For Times, Journal, Online Revenues Outshine Print

by Gavin O'Malley, Jul 22, 2005, 6:00 AM

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Online revenue growth trounced print in the second quarter of this year for both The New York Times Company and the Dow Jones Company, their earnings reports revealed Thursday.

For the Times Company, online ad revenues were up 27 percent, while its new property About.com is estimated to have increased ad revenue by 39 percent. About showed an operating profit of $2.5 million on total second-quarter revenue of $12 million. The Times Company purchased About.com from Primedia earlier this year for $410 million.

"The online revenues for these groups once again showed exceptional growth," President and CEO Janet Robinson said in a statement, referring to the Times' different operating units. "We were particularly pleased with results of About.com."

Overall, net income at the Times Company--which publishes the Times, The Boston Globe, and the International Herald Tribune, among others--dropped to $60.8 million (including a $10 million charge for staff-reduction costs), compared with $75.7 million last year.

For Dow Jones, online revenues leaped to $128.4 million--up 33.5 percent since last year--and subscriptions for The Wall Street Journal rose 8.8 percent to 744,000. Operating income was up 28.1 percent over last year, while the operating margin dipped to 22.9 percent from 23.8 percent in second quarter 2004.

The company partly attributed such stellar online revenues to MarketWatch, which it acquired in January for $519 million.

Print revenues were down 7.2 percent--or $18.3 million for the quarter and nearly $40 million for the year--while operating income fell 58.2 percent.

Overall, Dow Jones reported second-quarter revenue of $454.2 million, up 3.7 percent year-over-year, while operating income was down 30.9 percent at $38.9 million, due in part to a write-down of its stake in CNBC's overseas operations.

Dow Jones on Thursday said it would end its partnership with CNBC's overseas operations, while maintaining its U.S. licensing deal with the cable news channel.

As a result of this second-quarter performance gap, online operations grew to represent almost half as much revenue as print--up significantly from a year ago, when online represented just a fifth as much revenue as print.

Peter Kann, Dow Jones chairman and CEO, attributed print's poor performance to a weak business and technology ad market. "Our results continue to be adversely affected by declines in B2B advertising in our Print Publishing segment, a situation we see improving in the third quarter 2005," Kann said in a statement.

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