• by Paul Gough , March 2, 2004

The publisher of the Financial Times isn't ready to say they'll start raking in the cash, but says it's "cautiously optimistic" about 2004.

Pearson is mostly known for its textbooks and school business, not to mention its Penquin book publishing unit. But 19 percent of Pearson's revenues come from its ownership of the Financial Times group, which also owns several other business newspapers in Europe and is half owner of The Economist magazine.

The Financial Times has been hit hard by the business-to-business recession, as has The Wall Street Journal and other b2b publications. Ad volume at The Financial Times has dropped by two-thirds since the recession began in 2000.

Advertising revenues at the Financial Times were down 18 percent in the first half of 2003, and down 12 percent in the second half of the year. Ad revenues are down by 15 percent in key categories such as corporate finance, technology, and business-to-business.

But revenues are only down 4 percent in the first two months of 2004, with the trend clearly moving forward at the Financial Times, which in recent months has been pushing to gain market share in the United States with a U.S. edition. Business-to-business advertising remains erratic, but seems to be going in the positive direction, said Chief Executive Officer Marjorie Scardino.

"That's a good sign, and our forward bookings are a little bit ahead," Scardino said Monday morning. "So we may be past the worst--but it's too early in our opinion to call it a recovery, so we've budgeted on the basis that our progress has to depend on cost efficiencies rather than revenue growth."

The Financial Times' circulation is 518,000 paying readers in 2003 when FT.com is taken into account--compared to 314,000 in 1997 and 509,000 in 2002. Print circulation is 433,000--down 4 percent compared to 2002. FT.com subscribers are up 50 percent to 74,000.

Yet the Financial Times continues to lose money, with 9 million pounds more in losses in 2003 than the previous year, due mainly to advertising revenue declines as Pearson attempts to expand the newspaper around the world. The Asian edition was launched in September, making four regional newspaper editions.

Business-to-business newspapers like The Financial Times and The Wall Street Journal aren't the only ones to enter 2004 decidedly down. Consumer magazines, Sunday newspaper supplements, and national newspapers like The New York Times and USA Today are still reporting unimpressive results.

January ad revenues dropped 3.6 percent at The Times; ad pages were down 7.4 percent at USA Today and 5.1 percent at The Journal. The Times' ad revenues rose 1.4 percent for calendar 2003, although its ad pages declined 3.8 percent. USA Today's ad revenues rose 4.0 percent, and its pages increased 1.0 percent during 2003. The Journal's ad volume erosion dropped to just 1.3 percent for 2003.