• by Gavin O'Malley  @mp_gavin, January 26, 2007

Dow Jones claimed 811,000 paid subscribers to The Wall Street Journal's Web site during the fourth quarter, marking a 5.6% increase from last year, the company reported Thursday.

Overall, revenue surged 6.1% to $485.4 million, while profits rose to $192.9 million, or $2.30 a share for the quarter--up 49 cents year-over-year. While much of that increase was due to the sale of several newspapers and the acquisition of Factiva's news database business, analysts also said the company's effective Web strategy played a role.

"Dow Jones is one of the few publishers with an aggressive, proactive attitude that incorporates a variety of online strategies," Merrill Lynch analyst Lauren Rich Fine said in a research note released Thursday.

"Dow Jones has a number of levers it can pull, and it is seemingly doing just that," she added. Fine, however, did not upgrade the stock's rating from "neutral," because the company's worth is already reflected in its stock price.

Credit Suisse analyst Debra Schwartz commended Dow Jones for placing less emphasis on print operations as consumers increasingly favor digital copy.

"The company is moving aggressively away from print and reiterated its target of print revenue exposure of under 60% in 2007," said Schwartz in a note released Thursday.

"Overall, we like the mix shift of the business, increased visibility of stabilization in local media, and superior growth potential from consumer media for 2007," Schwartz added, maintaining her "outperform" rating on the stock.

"The upside in the quarter came from better than expected consumer media profit," Schwartz said. Dow Jones' consumer media business--including the Journal, Barron's and MarketWatch--saw a 4.6% increase in revenue.

For 2007, Dow Jones said it expected total revenue growth of 3% to 5%, excluding the effect of adding the Factiva stake. (Dow already owned one-half of Factiva.) On a net basis, revenue is expected to grow 18% to 20%, Dow Jones said.