While profits fell sharply because of comparisons with one-time sales in 2006, the company still enjoys a considerable advantage over other newspaper owners: Its Web-derived revenues appear to be poised to offset losses in print.
Print is still a weak spot for Dow Jones, with ad revenue declining 2.9%--partly because of a reduction in technology advertising. However, The Wall Street Journal Digital Network saw ad revenue increase 7.8%, while paid subscriptions to The Wall Street Journal grew 25.5% to 989,000, and paid subscriptions to Barron's Online grew 61.4% to 113,000. Looking to the fourth quarter, CEO Rich Zannino predicted a return to a roughly 20% growth rate in online revenues.
During the conference call, the success in recruiting online subscriptions prompted analysts to ask the obvious question: Will Rupert Murdoch, the company's new owner, decide to make The Wall Street Journal free online?
In a vague response, Zannino asserted that "we have had the right model" over the last decade. But he conceded: "times change, and things change, and the online space is rapidly evolving, as everyone knows. People's consumption on the Web is rapidly changing and evolving." He added that Murdoch and Dow Jones executives will be examining the issue closely in the coming months.