The New York Times Company (NYSE:NYT) recently announced it would sell the Boston Globe and rename its foreign paper. This continues its push to streamline around The New York Times Brand. However, with little left to jettison, it might be time to ask when The Times gets sold and to whom.
Blame the internet
There is no question that the Internet has destroyed the newspaper industry. For example, news published online is instant, very often free, and easily accessible. Why wait for day old news printed on a piece of paper? National, local, and individual advertising also quickly shifted to the web through such services as Google Inc (NASDAQ:GOOG), Craig’s List, and Yelp.
A great brand
One thing that The New York Times Company (NYSE:NYT) has going for it, however, is its reputation. As the company tried to adapt to the online space, this proved less beneficial than the company hoped. In the end, it reached a little too much in its efforts to shift gears and now has little choice but to pare back.
The New York Times sold off About.com to Internet scavenger IAC Interactive (NASDAQ:IACI) in 2012 for over $100 million less than it paid. IAC, which focuses on turning around troubled web properties and investing in up and coming ideas, brought About.com together with its Ask.com business. Unlike the Times, IAC is focused exclusively on web properties, so the fit is probably better. Add to this that About and Ask have similar businesses and the transaction looks even better, for IAC anyway.
In addition to this sale, The Times has been shedding print businesses, too. The Boston Globe and its related assets are pretty much the last papers to go. Mark Thompson, president and CEO of The New York Times Company, stated that the company has a plan to “…concentrate our strategic focus and investment on The New York Times brand and its journalism.” Clearly, there isn’t much left other than that to focus on.
Back to Basics
So it looks like it is going to be back to basics, of a sort, at The New York Times Company (NYSE:NYT). The company has been seeing some notable success at getting customers to pay for its content, which is a good thing. However, it is still feeling the pinch of advertising declines.
It is hard to see how the company continues down this path without having to alter its business model even further. Indeed, if it can’t get advertising going in the right direction, it may not have a business. IAC, for example, has a huge collection of sites that it monetizes through advertising. The New York Times has only its own branded site. There is value in that, but how much?
Could the Times be sold?
After the company has sold everything else, the only thing left to sell is the Times itself. There are notable ownership issues that potentially block such a sale, but that didn’t stop Wrigley’s from getting sold. If things get “bad enough,” the Times, too, will go. But to whom?
Google Inc (NASDAQ:GOOG) would be an interesting fit. It is clearly buying up content assets, including the Zagat business, among many others. Imagine how much content would come along with a purchase of The New York Times and its entire back catalog. This would give the company a treasure trove unmatched in the world that it could exploit, or make free, to increase advertising sales. Moreover, Google Inc (NASDAQ:GOOG) is easily large enough to handle such a transaction.
It might be harder for Google Inc (NASDAQ:GOOG) to handle such a material switch from aggregating to creating content, but it could handle that if it were to keep the Times as a separate entity. By walling off the publisher, it would also protect the integrity that is key to the storied brand.