Thursday, September 27, 2007

Shedding Lights on the Newspaper / Yahoo Deal

Jennifer Saba writes at Editors & Publisher about a Deutsche Bank paper on the deal Newspaper/Yahoo Deal.

New Study Offers Surprising Numbers on Newspaper/Yahoo Deal

Deutsche Bank offers 3 Scenarios:

In the first estimate, it's assumed that online revenue will continue to increase at a strong clip about 25% because either the Yahoo deal doesn't significantly "move the needle" or helps but not enough to stanch print losses. Total newspaper revenue and EBITDA won't turn positive until 2012.

In the second scenario, online revenue advances about 40% starting in the second half of 2008 before settling back down to a growth rate of 25% in 2012. The surge is anticipated as newspapers add more Yahoo features, like the capability to sell remnant inventory for much greater CPMs. Total newspaper revenue and EBITDA will rise starting in 2010.

In the third scenario, online revenue growth is much more robust, increasing 40% in 2008, 50% in 2009, and 50% in 2010 before falling back down to a growth rate of 25% by 2011. Total revenue and EBITA growth will hit positive territory by 2009.

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