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New York Times Outage, WSJ Takes Advantage

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A sudden technical snag led to the non-functioning of The New York Times Company’s (NYT) website for about two hours on Wednesday, Aug 14, 2013. The problem, which occurred at around 11:10 a.m. was restored by 1:15 p.m.

The outage took place between 10 a.m. and 4 p.m., when most people search for news, online.  Certain sources believe that the non-availability of the website was due to a cyber-attack. The New York Times Company, however, claimed that it was due to a server problem.

The technical glitch happened when the news of the Egyptian unrest was making headlines. As a result, The New York Times Company used online social media platforms to bring the story to their readers. In the meantime, The Wall Street Journal, the flagship newspaper of News Corporation (NWSA) gave rest to its pay-and-read model for a few hours to attract online readers.

Most of the publishing companies started charging readers for online content, to offset shrinking advertising revenue. The publishing industry has long been grappling with sinking advertising revenue. This comes in the wake of a longer-term secular decline as more readers choose free online news, thereby making the print-advertising model increasingly irrelevant.

Despite hiccups in the economy, what still promises a guaranteed revenue generation avenue is The New York Times Company’s pricing system for NYTimes.com, which was launched on Mar 28, 2011. The company notified that the number of paid digital subscribers for The New York Times and the International Herald Tribune reached 699,000 at the end of the second quarter of 2013, reflecting a jump of about 35% year over year. Another diversified media conglomerate, Gannett Co., Inc. (GCI) also initiated a subscription based model.

In order to focus more on its core newspaper group and pay more attention to its online activities, The New York Times Company has been offloading assets. The company entered into a deal to sell its New England Media Group, including The Boston Globe and its allied properties to an acquisition company spearheaded by John W. Henry, who owns Fenway Sports Group.

The New York Times Company on Sep 24, 2012 completed the sale of About Group, which it acquired in 2005, to InterActiveCorp (IACI) for a consideration of $300 million. In October, the company sold its stake in Indeed.com, a job portal, for approximately $167 million. Another example of asset divestiture by the company is the sale of Regional Media Group in Dec 2011.

The New York Times Company remains committed to streamline its cost structure, strengthen its balance sheet, and rebalance its portfolio. The company is also adapting to the changing face of the multiplatform media universe, which currently includes mobile, social media networks and reader application products in its portfolio. Currently, the company carries a Zacks Rank #3 (Hold).

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