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Can The New York Times Company (NYT)’s New Mobile Website Bolster its Earnings?

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The New York Times Company (NYSE:NYT) recently re-launched its mobile website as an initiative toward creating more responsive and engaging content across all its digital platforms.

The New York Times Company (NYT)The restructuring is also expected to revive the declining revenues from other divisions such as print advertising. The New York Times Company (NYSE:NYT)’s mobile website relaunch is its first step toward developing a more robust and loyal user base in a highly competitive digital news industry.

This is the first revamp of its mobile site since it was first launched six years ago. The site is now perfectly angled to offer mobile users an extensive range of articles, which were previously only compatible with PC and desktop browsers.

I expect this change to have an escalated user count across its website; in addition, this will enable the company in incrementally developing on its subscriber base by acquiring more users through international markets. Moreover, the growing broadband penetration coupled with increased usage of smart phones is expected to bolster its revenues.

It must be comprehended by investors that online media is gaining in popularity, as it offers more information at a faster rate and cheaper prices relative to print media. I believe such developments in the online media space will make printed newspapers obsolete in the coming future.

According to a recent publication offered by eMarketer, as online reading through tablets and smartphones is easier for subscribers, both physical circulation and print advertising will witness a massive decline. Social networks such as Facebook and LinkedIn will drive the future growth of this segment.

How will the revamped website add to earnings?

In order to comprehend how the new revamped website will contribute toward the overall earnings, it’s imperative to examine the revenue streams of The New York Times Company (NYSE:NYT). The company generated approximately $2.0 billion in revenues during the previous fiscal year, out of which highest percentage of revenues was generated through Print Circulation & Digital Subscriptions at around 48%. This was followed by Print Advertising and Online Advertising at around 34% and 17% respectively.

The new revamped website is expected to bolster revenues generated through online ads. It should be noted that the $340 million in revenues generated by The New York Times Company (NYSE:NYT) through online advertising during fiscal 2012 primarily depend on the unique user count and number of page views. The revamped mobile site is expected to increase the unique user count with consistently growing popularity of smartphones and tablets. Furthermore, the increase in users will be spurred through the access of desktop compatible website content on the mobile platform.

As more and more users access its new website, the number of page views will increase exponentially, translating into a higher number of ads viewed. The higher number of ads on its website will increase The New York Times Company (NYSE:NYT)’s RPM (revenue per 1,000 impressions) in the future.

The print circulation and digital services contributed $956 million to the overall revenues during the previous fiscal year. As per the valuation offered by Trefis, this division holds approximately 46% value in The New York Times Company (NYSE:NYT) present stock price.

With the launch of the new website, the mobile and tablet users can access the same content as desktop users. Therefore, the new revamped website will enable the company in charging a premium by offering digital subscription services to users that access its website content through smartphones and tablets.

According to the projections made by Trefis, by the end of 2012 the online subscriber count stood at around 668,000; however, the new website is expected to escalate the user count close to 1.4 million in the next few years. In any case, if the new initiative to revamp the website manages to grab even more appreciation resulting in the user count blowing past the 2 million mark, then there may be a huge upside to its stock price. This clearly exhibits the significance of its new mobile website.

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