The New York Times (NYSE: NYT) this week signaled its increasing focus on the online world by forming a separate business unit for its more than 50 Internet sites.
Some believe the company may eventually look to the exuberant Internet stock sector to raise funds to expand the unit. Known as the “gray lady” for its long and storied presence in print journalism, the Times is looking to build an equally strong reputation, as well as a profitable business, on the Internet.
“This step significantly advances our ability to build a high-quality, high-value Internet presence and to respond even more quickly to the fast-moving Web marketplace,” Chairman Arthur Sulzberger said. “By aggregating our portfolio of Internet assets into one business unit, we will sharpen our strategic focus and gain the flexibility to bring our digital future to scale.”
The new Times Company Digital division will consolidate all of the company’s Internet holdings under one leader: Martin Nisenholtz, president of The New York Times Electronic Media Company.
Times Company Digital will include nearly 50 Web sites such as The New York Times on the Web and boston.com, which is affiliated with The Boston Globe, also owned by The New York Times Co. Other oft-visited New York Times sites inlcude New York Today and Wine Today. The Times also operates Web sites for its regional newspaper, broadcasting and magazine holdings.
Under the new division, the Web sites will continue to focus on news, information and communications services, Nisenholtz said. “Our experience to date clearly indicates that users want to know they’re accessing information of the highest editorial integrity at trusted destinations. This is what our new business unit will deliver on a global scale,” he said.
Public or Private?
The Times has not offered any specifics as to its future plans for the new division, though the company agreed it is positioning the unit to created more value for its shareholders. The Times’ online businesses are showing promising numbers, which paired with the name of its parent company could help drive an IPO someday.
New York Times Co. stock trades at about $34 per share, and based on earnings per share the company ranks 10th among the top 20 public media companies. The stock only climbed as high as $35.25 on the news of the unit, perhaps reflecting investors’ uncertainty about the company’s long-term plans for the new division.
The Times estimates its new media properties will generate revenues of $24 million to $26 million (US) this year. More than 7 million people visit nytimes.com, with 553,000 new visitors checking it out in April. Users during business hours spent nearly 42 minutes per month at the site, which according to Media Metrix is more than any other comparable news site and among the top 10 visited sites of all types.
The company’s newest site, The New York Times Learning Network, launched last September and delivers lesson plans via e-mail to more than 1,700 teachers.