Ad revenues drop at Sun and Times owner

by Tristan O'Carroll, mediaweek.co.uk 05-Nov-09, 10:59

LONDON - News International's ad revenues fell 15% year on year in Q3, although parent News Corp returned to profit growth in the quarter.

Unveiling its Q3 financial results, News Corp said its UK newspaper operation, News International - owner of The Sun, News of the World, The Times and Sunday Times - posted a fall in pre-tax profits, termed by the company as operating income, due to a 15% fall in ad revenue and a 6% decline in circulation revenue. It did not specify its actual ad or circulation revenue. By comparison, News Corp's Australian newspaper group reported a 17% decline in ad revenue.

News Corp's newspapers division - which houses News International, its Australian newspapers and Wall Street Journal owner Dow Jones - posted Q3 pre-tax profit of $25m, a decrease of $109m compared with the same period a year ago.

Rupert Murdoch, News Corp chairman and chief executive, surprised analysts and the media by admitting that plans to charge readers of newspaper websites by next June could be delayed.

He gave no reason for the delay, but said he "can't promise" that he'll meet his own deadline.

News Corp did not provide significant detail on the performance of its digital operations such as MySpace. However, it said revenue from its Digital Media Group, which houses its digital offerings, decreased $22mn from a year ago, "principally due to lower search and advertising revenue".

News Corp reported Q3 pre-tax profit of $1.04bn, a year-on-year increase of 9%, on the back of double-digit percentage profit increases at its movie, US cable programming and book publishing segments.

Murdoch said "the strategic steps we took last year to ensure stability during the downturn have proven successful".

He added: "The economies in which we do business are clearly in better shape than they were a year ago and we have further positioned our operations to take advantage of the improvements we are seeing globally."