Online Publishers Post Q1 Gains

News publishers’ first-quarter financial results show their online units continuing to show solid growth.

Overall, news companies showed sluggish growth due to an uncertain economic climate and ad pullback during the Iraq war, but their online units continued to improve, following a solid fourth quarter that saw some begin to return operating profits.

At The New York Times Co. , the Internet arm saw revenue rise 21 percent year over year to $19.6 million. Operating profit at New York Times Digital (NYTD), which runs both the flagship site and the Boston Globe’s, rose to $3.2 million. The company attributed the increases to higher advertising revenues.

NYTD now seems to have turned the corner financially, coming off a solid year in 2002 when it returned an $8.3 million operating profit.

Knight Ridder Digital (KRD), which includes the Web sites of papers like the Miami Herald and Philadelphia Inquirer, also built on the profitability it established last quarter. For the first three months of the year, KRD revenues were up 33 percent with a $3 million profit. The company said it had notable success in coupling online and offline classified sales.

Likewise, Tribune Co. said revenues at its interactive division, which includes the Web sites of the Los Angeles Times and Chicago Tribune, were up 14 percent over last year. The company said the increase was led by demand for classifieds and national advertising.

On the local side, Davenport, Iowa-based Lee Enterprises , publisher of 38 local papers like the Billings Gazette (Mont.) and Lincoln Journal Star (Neb.), saw revenues from its online unit skyrocket 38 percent in February to $793,000.

Last week, Dow Jones highlighted an improved financial performance at the Online Journal as one of its bright spots in the quarter. The Wall Street Journal Online continued to see growth in its paid subscriber base, which rose 5.5 percent over the year to 675,000.

Some newspaper publishers, including The Washington Post Co., have not reported their quarterly results yet. Others, like USA Today publisher Gannett, did not break out their Internet operations.

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