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NYT: Challenges abound, but luxury ads on rise

By David B. Wilkerson, MarketWatch

Last update: 4:11 p.m. EDT June 10, 2008

CHICAGO (MarketWatch) -- The weakened U.S. economy will pose ongoing problems for the New York Times Co. in 2008, the company's chief executive said Tuesday, but there are encouraging signs that sales of luxury-related advertising are improving thanks to the recent online launch of T: The New York Times Style Magazine.

"2008 is another challenging year for the New York Times Co. (NYT:

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NYT 16.66, +0.12, +0.7%) and for the newspaper industry, as technology alters the habits of readers and advertisers," said CEO Janet Robinson during remarks at the annual Deutsche Bank Media & Telecom Conference in New York. "The economic downturn has exacerbated print-revenue declines, particularly in classified areas."

However, Robinson said national advertising sales are up so far this year, thanks to improvements in sales of luxury goods, entertainment/media and financial categories, among others.

The online edition of T: The New York Times Style Magazine, launched last December, has been a major contributor to the increase in luxury goods ads, Robinson said, as companies like American Express, Bloomingdale's, Christian Dior, Hammacher Schlemmer and other high-end advertisers seek cross-platform buys across digital and print properties.

"It's also very clear that the New York Times has traditionally had a large national advertising base, and that's been a key differentiator," Robinson said. "That's also true in Boston," she said, despite the precipitous overall advertising declines at the Boston Globe.

The company will stay "focused on cost-reduction," Robinson said, as buyouts and layoffs at The New York Times continue this year.

New York Times has been able to grow its digital revenues to 11% of the company's overall revenue, up from 10% in 2007. Newspaper publishers have scrambled to take advantage of increased online readership of their publications, but have not been able to convert those readers into ad revenue fast enough to offset a drop in print ad revenue.

Separately Tuesday, Robinson said the two new members of the company's board -- from two private equity firms, Harbinger Capital Partners and Firebrand Partners -- have had "very good thoughts and ideas," and that New York Times looks forward to getting more of their input.

In March, New York Times moved to prevent a possible proxy fight with Harbinger and Firebrand by granting them two seats on the board. The funds had been mounting a campaign to win four seats.

Shares of New York Times rose 2.2% to close at $16.77 on Tuesday.

Also during the Deutsche Bank conference Tuesday, newspaper publisher Media General (MEG:

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