The New York Times (NYSE:NYT) showed yet another disappointing year as it failed to turn around its advertising revenues for 2011, which declined by 4.7% compared to the decline of 4.1% in 2010.  Although the company’s digital subscriptions fell short of our target of close to 500,000, NYT’s paywall remains the best bet as the company sheds its other non-strategic assets like the Regional Media Group. The New York Times operates in an intensely competitive online advertising market, with players like Google (NASDAQ:GOOG) and Facebook.
Time for About.com To Go?
NYT’s information and advice site, About.com, saw a steep decline of 19% in revenues this year. It’s quite clear that user engagement on the site is on a downward slope, which might be driven by users seeking other sources of information on smartphone/tablet devices. Hence we think NYT urgently needs to invest further in developing mobile-based apps for About.com. Otherwise this declining trend may prompt the company to consider a sale of this division, much like the Regional Media Group.
We currently have a price estimate of $7.50 for NYT’s stock, which is roughly 6% below the current market price. We will update our analysis for NYT based on the Q4 2011 earnings in the next 3-4 days.Notes: