About.com, a collection of 500 online "guide sites" run by experts informing consumers about 57,000 topics ranging from gadgets to baby care, was ridiculed as a mishmash of pedestrian info-junk-a poor fit for the high-brow, elite news-gathering machine that is The New York Times.
At the time of the purchase, Janet Robinson, president of The New York Times Co., summed up the rationale: "About doubled its ad revenues last year. ... [W]e believe About.com's revenue and operating profits will continue to show strong growth."
About did not disappoint. The site's revenue was $52 million in 2005, up from $36 million in 2004. In the fourth quarter of last year, About's revenue climbed 51%, and it grew all three of its revenue streams-display, advertising and cost-per-click-according to the Times Co.'s earnings statement.
The overall increase was driven by higher rates and greater spending from blue-chip brands. All of this helped the Times Co.'s ad revenue grow 6.2% in 2005, and offset a decrease in circulation revenue of 2.3%. About.com's traffic climbed by 10 million since January 2005 to 31 million, ranking it No. 12 among the top 15 Web brands, according to Nielsen/NetRatings.
For 2006, the first full year of revenue for About as a Times unit, the parent expects "strong double-digit revenue."
Besides delivering a reliable revenue stream, About.com is a corporate sibling that has kept its identity. To be sure, there are a few kinks to be worked out. But most surprising, About.com has actually upgraded the Times Co.'s status as a newspaper company that understands how to invest in and benefit by the Web.
Interactive agency Avenue A/ Razorfish, among the biggest online media buyers, named New York Times Digital the publisher of the year for the eastern region in its annual Digital Media Outlook, an analytical report on the state of online media, saying, "The About.com acquisition was the latest sign of the New York Times Co.'s digital commitment." As a media buyer, said Jeff Lanctot, VP-general manager of the agency, "you get the brand association of The New York Times coupled with the brand efficiency of About.com-it's a pretty good one-two punch."
In the recent hiring of blogosphere guru Jeff Jarvis, president of Buzz-machine.com, to consult with About.com, the Times Co. also acknowledged that About.com's content, produced by individual guides, has been a precursor to consumer-generated media that's the rage today, media buyers said.
Mr. Jarvis' influence is evident in a daily blog about the Olympics from Turin, Italy. And a handful of guides not only list their favorite blogs on their home pages, but engage in blog-like conversations with those bloggers.
"The Times continues to push the boundaries in the digital space," said Jeff Marshall, senior VP-director, Starcom Mediavest Group. "Some of it has a Times brand stamp on it and some of it doesn't."
The Times imprimatur is evident in the way pop-ups have been permanently banished on About.com. Cost-per-click sponsored links, which accounted for about half of About's revenue when it was owned by Primedia, are a mainstay on each page, and relate contextually to each page's contents. Display ads crept ahead of links in 2005, though, as the largest revenue source, said Scott Meyer, CEO of About.com.
And blue-chip brands for the first time have sampled About, including Microsoft, Nissan, Honda, American Express, Wal-Mart and Intel. "It's a huge endorsement for the quality of About.com," Mr. Meyer said.
Some of these were already Times advertisers. But About facilitated a deal between its client Wal-Mart and Times Digital, resulting in a holiday 2005 display ad campaign.
Links to paper
Also during the fourth quarter, major Times client Intel sponsored a microsite designed to promote its convergence technology by featuring articles from the Times news archives and About's gadget and technology staffers.
The two sites now share an inventory-management application so clients can plan campaigns across both properties. The sites' sales staffs remain separate. "That's important because there are two different products," said Mr. Meyer. But "if an advertiser wants a shared program, we can provide it."
Such synergy can be attributed to Mr. Meyer's skilled shuttle diplomacy. A former Times man (he was general manager of the paper on the Web and ran planning at the Times Co.'s Boston Globe), he said, "My DNA is Internet, but I've learned to speak newspaper."