Times Co. Forecasts Web Revenue To Surge 30%

The New York Times Co. this week projected its Internet revenue to grow 30%, or more than $80 million, next year.

This year, the company said it expects to generate nearly $270 million in revenue from Internet-related businesses, including About.com, NYTimes.com, Boston.com, and iht.com as well as sites associated with its regional newspapers. In total, Web businesses are expected to account for more than 8% of the company's revenues this year. About.com alone is expected to grow revenue by 26%. Last month, ad sales at About.com jumped 44% to $7.3 million.

The Times Company's forecast of 30% growth next year, while not exceptional, is in line with industry trends, said Gordon Borrell, CEO of Borrell Associates. Specifically, Borrell expects the local online ad market to grow 30.6% next year. (The Times does not disclose online ad revenue broken down into local and national categories.)

"Thirty percent is not phenomenal; it's actually pretty boring," said Borrell. "That said, the Times is the kind of company that will not only survive but thrive, because they're smart and open to change."

Overall, The New York Times Co. said November revenue dropped 1.7%, attributed to a beleaguered print advertising business. The company said it had $189.9 million in ad sales from continuing operations during the month--down 3.8% from $197.4 million year-over-year--while total revenue from continuing operations fell to $278.5 million from $283.3 million.

"The media marketplace has been challenging in 2006, and we expect it will continue to be next year," said Janet L. Robinson, president and chief executive officer, in a statement.

In response, Robinson outlined five initiatives for growth: brand-building through new multiplatform products and services; pursuing leadership positions in key content verticals; building a long-term "innovation capability" to help anticipate trends; reallocating resources to meet readers' changing demands; and increasing operational efficiency. Honing the company's focus on digital and print efforts, in September, the Times announced plans to shed its broadcast media group.

Recent online initiatives include two new real estate vertical Web sites, launched in September, which aggregate listings and articles from across the company's newspapers throughout the country. And in early November, the Times launched a daily ad-supported e-mail newsletter, Urbanite, which provides information on restaurants, shopping and other leisure activities for trend-happy readers.

For Merrill Lynch media analyst Lauren Rich Fine, the Times' numbers are solid, and a better representation of the company's health than its stock price. "New York Times' shares are trading more on speculation regarding going private, selling assets, or selling the company," Fine wrote in a client note.

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