NEW YORK (Reuters) - U.S. newspaper publishers on Tuesday said growth at their Internet divisions would at last become a key contributor to revenue, helping to fill a profit shortfall at their traditional print operations.
Many publishers began experimenting with the Internet in the 1990s when readers started moving online to get their news. Though those operations have grown quickly, they still remain a small part of overall revenue.
Tribune Co., now in the throes of a boardroom battle over its future, said Internet operations could generate 12 to 15 percent of publishing revenue by 2010. That compared to a forecast $222 million in 2006, or 6 percent of revenue.
"We will expand our already significant Internet businesses and will invest in additional interactive ventures," Tribune Chief Executive Dennis FitzSimons told analysts at the Newspaper Association of America's (NAA) Mid-Year Media Review.
The publisher of the Los Angeles Times and the Chicago Tribune also seeks to increase its ability to share news, programs and other content among its Web sites, newspapers and television stations.
Media General Inc., which publishes the Tampa Tribune and owns 26 television stations, touted an Internet strategy that began over a decade ago and forecast online revenue of $50 million in 2008, up from an expected $30 million in 2006.
"Our online audience has grown significantly, and strong double-digit growth rates continue," said CEO Marshall Morton. "We expect the division in the aggregate to become profitable in 2007."
Newspaper publishers have grappled with making their Internet business a major profit source. Advertisers have followed readers to the Web, but competition is fierce due to a broad array of Internet sites and Web journals, or blogs.
The Internet accounts for about 5 percent of newspaper companies' revenue on average, but it is growing by about 30 percent annually, according to the NAA. At the same time, print operations have been plagued by declining readership and rising production costs.
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The New York Times Co., for example, on Monday said it still faced a challenging advertising market.
But the publisher of the New York Times and the Boston Globe said its online information venture About.com would begin to boost earnings this year, rather than next year as previously expected.
Defining a future strategy has become key for Tribune management as it faced opposition from the company's second-largest shareholder, the Chandler Trusts.
The Chandler family publicly urged Tribune to consider spinoffs of various division or an outright sale, claiming the company had failed to make good on a multimedia strategy. They have opposed a planned $2 billion buyback of Tribune shares that aims to increase value for investors.
FitzSimons said Tribune plans to increase its stake in online job site Careerbuilder.com after publisher McClatchy Co. acquires Knight Ridder Inc. Both are partners in Careerbuilder.
Magazine publisher Meredith Corp. forecast earnings per share for its fiscal fourth quarter of 96 cents compared with 83 cents a year ago, partly on the strength of its "Better Homes and Gardens" and "Ladies' Home Journal" titles.
Analysts on average had forecast earnings per share of 96 cents, excluding items, according to Reuters Estimates.
Tribune shares fell 21 cents to $31.72 on the New York Stock Exchange. Meredith slid 12 cents to $48.55, Media General slipped 3 cents to $39.90 and the New York Times declined 10 cents to $23.50.
(Additional reporting by Kenneth Li)
