Earnings: NYTCO Prepares For Slower Revenue Growth In ’07

As we reported this morning, the New York Times Company (NYSE: NYT) warned in its 1Q07 earnings release that online revenue growth would be lower than planned. During the earnings call with investors and analysts, executives explained how they hope to manage what they consider to be the impact of an industry-wide slowdown, particularly with respect to its About.com unit. Secondly, Janet Robinson, NYTCO’s president and CEO, noted that while the company is always on the lookout for smaller, tuck-in acquisitions, major acquisitions will take a backseat to other priorities, namely, reducing debt, completing a stock repurchase and investing in unspecified “high return” capital projects. Some of the issues discussed included:

About.com’s growth appears to abate: Martin Nisenholtz, SVP-digital operations: “From a broad-based perspective, the industry itself has trended down a bit coming into this year.” He cited research by eMarketer, which he said reduced its ad spend forecast by five points down to 19 percent. He also singled out Yahoo’s earnings report, which saw profits drop 11 percent in 1Q07, as a further indication of an overall slowdown. “About.com grew about 24 percent in the quarter, which is pretty good, but off a little bit from last year, when the volume at About was going through the roof. That’s principally related to the cost-per-click side of the business. The display side of About is doing much better this year than last.”

Potential to grow online CPMs: Nisenholtz: “We have consistently raised CPMs over the past few years in key positions. … The premium position of NYTimes.com has raised CPMs in double digits. We’ve had four price increases in the last 18 months. With About.com, overall CPMs are up dramatically. I don’t want this to be confused

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