Blog Post

@ UBS Media Week: Susan Lyne, CEO, MSLO; Very Interested in Digital Acquisitions; Waiting on Mobile

Martha Stewart Living Omnimedia (NYSE: MSO) is “very interested” in acquisitions, particularly in the online space, according to CEO Susan Lyne. She delivered a standard stump speech for the UBS Global Media & Communications Conference, talking up the strength of the MSLO brand and the number of platforms it can deliver it across. In 2007, the company emphasized the ‘omni’ in Omnimedia, as it began transitioning its digital platform from one focused on e-commerce to one geared towards online ads.

Growth strategy: The company is looking for smaller internet companies that have tools and applications that “would allow us to jump ahead of our internet plan. … Planning tools in weddings and home living would be extremely valuable to us.” It also sees organic growth in both print and online.

Digital: The focus for 2008 is to turn Martha Stewart readers and viewers into internet users, with more site enhancements coming to aid this. Traffic was up significantly in fall 2007, after a slow summer post-relaunch. Previously the company’s online platform was geared towards e-commerce, but it’s made a strategic decision that advertising represents the big opportunity. After an adjustment period, during which the company did a lot of SEO work, traffic has started to trend up, which Lyne believes is “more than sustainable.” She also mentioned the company’s new ad network as an opportunity for growth. After the presentation, I caught up to Lyne to follow up on this: basically, the network is a way to deliver more inventory to its advertisers, so it’s mainly looking for sites that have a similar traffic mix to its own. She specifically mentioned that it has a different philosophy than the Glam network, in that it’s not just letting anyone in. Currently, the size of it is about 25 million page views across 25 sites. I also asked her where MSLO is in terms of mobile. Right now the company isn’t doing anything in that area, mainly because the profits aren’t there yet, and it’s not clear how the MSLO brand works best in the medium. But the company has had conversations with partners, and it may do something in the future when/if it makes sense.

Broadcasting: “The megaphone for our brand”. Consists of TV and radio programs. Company is able to repackage old content for new products, such as holiday specials. Radio programming is significant for promotional purposes.

Branding and licensing: MSLO takes the cake in terms of what it puts its name on. It’s not just home goods, but other kinds of items, like homes themselves (in partnership with KB homes) and food (its own hormone-free ham is launching this year), with more items to launch in the future..

Economy: The company has tried to diversify so that it’s not too tied to one area. Many of the company’s initiative are in “launch mode”, so growth in those areas is expected to be recession-proof