The New York Times had apparently been trying to offload About.com and related properties for quite some time, and it seems to have done exactly that today. It has sold off About.com to IAC, the company which also owns Ask.com, Match.com, and Vimeo.
The sale price is rumored to be $300 million, which is significantly lower than the $410 million NYT paid for it in 2005. Bundled with About.com in the deal were other properties like CalorieCount.com and ConsumerSearch.com.
Arthur Sulzberger, Jr., Chairman, The New York Times Company, said:
“About.com has been a strong contributor to our company since its acquisition in 2005. About’s early expertise in search engine optimization, expert content and revenues from cost-per-click and display advertising made it a valuable component of our portfolio for the past seven years. This sale will allow the Times Company to focus on the development and growth of our core brands locally, nationally and on a global scale.”
This deal should be good for both NYT and IAC, as NYT can now focus on its core business, while IAC has a better shot at turning About.com around. It also gives a good cash infusion to NYT, which could help it out in these trying times.
NYT reported its earnings for the second quarter of 2012 on July 26, bang in the midst of the earnings season.
It posted revenues of $515 million with advertising contributing nearly $244 million and its traditional print circulation business contributing $233 million to the mix. It managed to grow its revenues only by a marginal 0.6% this quarter, which is what usually happens when you operate in a declining industry trying to make sense of how the internet works.
It posted an operating loss of $143 million, and a net loss of $88 million. While its print ad revenues continue to decline, it isn’t doing very well on the digital ad front either. Circulation revenue growth is being driven primarily by its increasing traction in digital subscriptions. It managed to increase its digital subscriber base to 532,000, up 13% over the last sequential quarter.
NYT’s CEO said:
“Our second-quarter results reflect our ongoing strides in repositioning the Times Company for an increasingly multiplatform future. The growth in operating profit, excluding depreciation, amortization, severance and special items, was largely driven by continued strength in circulation revenues, which offset advertising revenue declines and led to overall revenue growth of about 1 percent. Total Company circulation revenues rose 8 percent, led by the nearly 11 percent growth at The New York Times Media Group as we continued to expand our digital subscription base and grow our robust consumer revenue stream.
At quarter end, total paid digital subscriptions across the Company were approximately 532,000, up 13 percent from 472,000 as of March 18, 2012, which was the one-year anniversary of NYTimes.com’s digital subscription launch. The growth in paid digital subscriptions benefited from our decision to move the gate on NYTimes.com from 20 to 10 free articles a month, and from a host of marketing and product initiatives that we have been rolling out this year.
While the advertising market remains challenging, the rate of decline for the Company’s total advertising revenues moderated, due primarily to improved digital advertising revenue trends, compared with first-quarter 2012 levels. This was mainly due to more favorable advertising trends at the About Group, particularly for cost-per-click advertising.”
via NYT – SEC