The New York Times Should Sell About.com

April 24, 2007 11:29 AM EDT Send to a Friend
From 247WallSt

Arthur Sulzberger, Jr., Chairman of The New York Times Company (NYSE: NYT) made this comment in the company's proxy: "we believe About.com is now worth at least twice what we paid for it."

Fine. Then sell it. NYT paid $410 million for About.com in 2005.

According to Comscore, the New York Times Digital sites have over 70 million unique monthly users. And, the visitors to NYTimes.com, Boston.com, and IHT.com belong in the group. They are strategic online extensions of the company's print properties.

About.com is not even doing particularly well. During the first quarter, its revenue rose less than 24% to $22.5 million. But, expenses grew faster, so operating profit rose less than 16% to $11.5 million.

Sulzberger is saying that About.com is worth almost 9x revenue. It has no strategic connection to the company. And, NYT needs to pay down debt.

For $800 million, About.com should be dumped.

Douglas A. McIntyre

For more calls go to http://www.247wallst.com/

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