• by Erik Sass  @eriksass1, February 1, 2007

The Gray Lady just got grayer. The New York Times Co.'s troubled New England division, led by The Boston Globe, contributed to an overall $648 million loss for the company in the fourth quarter.

The New England properties cost the company $814 million in the form of "the write-down of intangible assets at the New England media group," says New York Times CEO Janet Robinson. The write-down means a 60% decrease in the value of the Globe and Worcester Telegram & Gazette, which the company bought for $1.4 billion in the 1990s.

Annual ad revenues at the New England division declined 9% from 2005 to 2006, as revenues dropped 11.5% in the fourth quarter. Separating the New England division's performance from the rest of the company, however, the company would have earned $87.9 million--an almost 40% increase.

"Despite this charge, we continue to view these properties as key assets of the company," said Robinson, who added that the company remains focused on improving their performance. Robinson noted that the "regional economy has been especially hard-hit over the last couple years," including the loss of Filene's, the Globe's biggest advertiser. However, new retail stores are coming to New England.

Noting higher-than-expected revenues from the company's other properties in the fourth quarter, Robinson cited the increase in Internet advertising for the mostly positive performance. But she also noted the price crunch that happens when ad dollars migrate from print to online.

"Increasingly, ad dollars are being allocated to the Web, and while we are capturing a sizeable part of those dollars, the differential between print and online ad rates remains significant."

On a year-over-year basis, ad revenues at the Times Media group grew 4.3% in the fourth quarter compared to 2005, topping $931 million--including advocacy campaigns, pharmaceuticals and book advertising. The company also enjoyed 10% growth in its digital business revenues, powered by a 36% jump in About.com's revenues in the fourth quarter caused by higher advertising rates and increased volume.

"In total, our digital businesses generated about 85% million, or 9% of the company's revenues" in fourth-quarter 2006--up from 6% in 2006. Robinson forecast 30% growth in online revenue to more than $350 million in 2007, mainly from organic growth. Overall, the Times' online properties attracted 44.2 million unique visitors in 2006, according to Robinson.