Digital Revenue Won't Save The New York Times

Management at The New York Times Company (NYT) wants Wall St. to know that its digital revenue will rise 30% to $350 million this year. That includes revenue from its odd-ball search operation About.com. So, the number derived from properties like NYTimes.com and Boston.com will be something well under the figure of $350 million. In 2006, revenue from digital properties was 8% of the company’s total.

Investors don’t seem to care. Over the last two years, NYT shares are down about 33%. By way of contrast, Gannett’s (GNI) stock is only down 9% over that period. NYT revenue has barely moved over the last four years. In 2002, the topline was $2.939 billion. In 2006, that number hit $3.29 billion. The operating profit numbers have been worse.

Revenue at the company’s New England Media Group is down from $701 million in 2004 to $635 million last year.

An internet group that is even 10% of the revenue at the NYT may fill the hole that it print properties are creating. About.com could be close to $100 million of that revenue in 2007. That means that the online properties at the newspapers are not growing quite as fast at Times management would have it appear.

The NYT has a hole and it has some dirt, but getting the ground back to flat just doesn’t hack it.

Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.