Straight from the “world’s largest climbing wall”, as they were introduced, a panel led of senior executives led by CEO Janet Robinson talked strategy at the Deutsche Bank Media & Telecom conference. The key message, or perhaps hope: that cost cuts and digital growth and counterbalance the secular decline in print. After acknowledging what everyone knows, that 2008 won’t look any prettier for print than 2007 did, Robinson rattled off some bright spots for the company. Through April, the company had $117 million in digital revenues, up 13 percent, and online ad revenue was up 18 percent. Year to date, digital revenue is 11 percent of the total, compared to 10 percent last year. In order to increase growth, NYTCo (NYSE: NYT) has invested in key online verticals, including health, business and technology. Once again, she called out the massive social networking inventory that’s come into the market, but noted that quality inventory remained able to sell premium display ads (note: it’s not clear whether Robinson is suggesting that inventory on, say, Facebook, is actually depressing premium rates on a site like NYTimes.com)
– Cost cuts: Digital growth won’t do it alone, so there’s a lot of talk on taking costs out of the equation, just like at Tribune and every other paper publisher. The company is on track to reduce costs by $230 million in 2008 and 2009, $130 million of which will happen in 2008, said CFO James Follo.
– Acquisitions: Just once we’d like to hear the company that says: “We don’t think internet valuations are out of whack, and we don’t care about financial returns.” But NYTCo won’t be that company. Follo laid out the parameters necessary to judge a purchase: basically, an acquisition would have to fit into the company, provide a sustainable advantage, and be prudent on a financial basis. In 2007, the company made $45 million in new media acquisitions and investments. As for its existing portfolio, said Follo: “We are constantly evaluating our existing business. At a time of transition, is it incumbent on us to evaluate all of our companies to ensure that they remain a strategic fit.”