Facing Challenges From Glam, Other Verticals, MSLO Plans Major Website Revamp

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With vertical ad networks taking a sharper aim at women, Martha Stewart Living Omnimedia (NYSE: MSO) plans a major web overhaul this year, said CFO Kelli Turner during the company’s Q4 earnings call. Before the Q&A began, Turner also noted that while the publishing revenues are showing signs of stabilizing, Q1 online ad revenues are expected to be flat, after being up about 30 percent in Q4.

The investment on the website’s changes won’t be “enormous,” Turner said, though they could have a small impact on profits this year. When pressed for specifics about what parts of the website’s infrastructure MSLO wants to address, Turner said it would involve more “tagging, making the site more functional, adding greater search optimization.” In general, the revamp, which comes about three years after its last major online overhaul, is about “getting all our assets in the right shape to be used across all platforms.” Turner added.

During the Q&A, David Bank, an analyst with RBC Capital, asked about the challenge MSLO faced from other vertical ad nets. In particular, he asked if fashion and lifestyle network Glam Media’s recent $50 million mezzanine financing at a $750 million valuation was a factor in the decision to refurbish its website. “Obviously, this is a demo that you have incredible presence in, can you talk about your thoughts on vertical ad networks and the progress you’ve made?”

Turner acknowledged that asking about Glam was a good question. She also noted that there are a lot of other verticals in the women’s online space that have emerged over the last few years. With so many sites chasing a demo that MSLO is dominant in, Turner seemed to be saying that a natural part of maintaining the company’s lead rests on making sure its own web offerings are as up-to-date as possible.

“That’s the reason we’re investing in our website. We have a fantastic demo online, we have an incredibly engaged audience that wants to find us everywhere… Martha’s very engaged in this effort. Obviously, the Glam valuation is something that we have noted. Ultimately, that’s all good for us.” She added that MSLO has already sought to address the challenge from other lifestyle verticals with the creation of Martha’s Circle about two years ago and this week’s release of Martha Stewart’s first iPhone app. As for Martha’s Circle, Turner said there has been steady progress, but that the company would like to continue to “build it and make it more focused.”

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