The current economic situation doesn't seem all well for
publishing companies, who are bearing the brunt of waning
advertising demand. So, the companies are streamlining their cost
structure, strengthening their balance sheet, and rebalancing
their portfolio. Moreover, they are looking for new revenue
generating avenues to lessen their dependency on traditional
Publishing companies have been divesting assets that have no
direct relation to the core operations.
The New York Times Company
) recently completed the sale of About Group, which it acquired
in 2005, to
) for a consideration of $300 million. The About Group segment
comprises the websites About.com, ConsumerSearch.com and
Caloriecount.com, along with other related businesses.
The decision came on the back of declining revenues. About
Group's revenue dropped 8.7% in the second quarter of 2012 due to
fall witnessed in both cost-per-click and display advertising.
During the first quarter, the revenue declined 23.1%.
Prior to this, in May 2012, The New York Times Company
divested its remaining stake (210 Class B units) in the Fenway
Sports Group, the owner of the Boston Red Sox and the Liverpool
Football Club, for $63 million.
Another example of shedding the assets by the company is the
sale of Regional Media Group in December 2011, - consisting of 16
regional newspapers, print publications and associated ventures -
to Halifax Media Holdings LLC, the proprietor of The
Daytona-Beach News Journal in Florida, for approximately $143
The publishing industry has been struggling with sinking
advertising revenue as more readers are gradually choosing free
online news, thereby making the print-advertising model
increasingly irrelevant. To curb shrinking advertising revenue
and seek new revenue avenues, the publishing companies
contemplated charging readers for online content.
Despite hiccups in the economy, what still promises a
guaranteed revenue generation avenue is The New York Times
Company's pricing system for NYTimes.com, which was launched on
March 28, 2011. The company notified that the number of paid
digital subscribers for The Times and the International Herald
Tribune reached 509,000 at the end of the second quarter of 2012,
reflecting a jump of about 12% since March 18, 2012.
The company also launched a pay and read model for
BostonGlobe.com for a weekly subscription of $3.99. The number of
paid digital subscribers reached 23,000 at the end of the
quarter, representing an increase of 28% since March 18,
Currently, we have a long-term "Neutral" recommendation on the
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