Pearson rethinks FT website Richard Wray, communications editor
The proliferation of voices on the internet, with millions of people posting their views on blogs and online communities, has caused Pearson, owner of the Financial Times, to rethink opening up its flagship FT.com website.
Pearson chief executive Dame Marjorie Scardino, announcing a strong 19% rise in annual profits to £502m, admitted that FT.com is likely to continue to rely on subscription revenues, retaining its so-called 'chargewall'.
"As debate online has become more diffuse - hundreds of thousands or millions of voices on each topic - it has become less helpful in a way," she said. "The trend now online seems to be some sort of mediation and we think we might have a role there."
Her comments represent a U-turn. At the time of the company's interim results in July she voiced concerns that the FT's ability to take part in the growing online debate was being hampered by subscription fees.
But she said today that the 90,000 subscribers to FT.com represent a "rarified audience" including senior figures in business and politics across the world and "We have found that to some extent with the quality of audience we have got we can provoke the discussion".
"This is not a typical online discussion where people do not reveal who they are," she said of some recent FT.com forums.
Last year the FT newspaper and website saw profits jump by £9m to £11m due to rising advertising and a raft of cost cuts - including the axing of 50 journalists and the creation of an integrated web and newspaper newsroom.
Sales were up 8% to £238m, with advertising revenues increasing 9% and the advertising market remains buoyant going into 2007.
"Our forward books are up ahead of last year. We had very few forward bookings at all last year, it was all spur of the moment," she added.
Dame Marjorie also defended the FT's practice of printing three international editions - in Europe, Asia and the US - alongside its UK paper, despite speculation that it loses money on all of them.
The US, European and UK editions all sell about 140,000 copies, the Asian edition pulls in a mere 20,000.
But she said advertisers found the different editions attractive with almost half of the FT's advertising booked for all four editions worldwide.
Despite this, any further segmentation of the FT Group - such as into new specific industry areas - will be done online.
Pearson reported a record set of annual results with sales of £4.4bn up from £4bn in the previous year as its education business outperformed the rest of the market, book empire Penguin had a raft of bestsellers and the FT Publishing business put on a strong performance.
Profits at Penguin increased to £66m from £60m as sales rose £44m to £848m on the back of strong sellers such as The Kite Runner and A Short History of Tractors in Ukrainian.
This year Penguin is hoping for success from books by Alan Greenspan and Al Gore.
There has been talk that Pearson might sell off either the FT or Penguin. While refusing to be drawn on the issue, Dame Marjorie stressed that there are cost synergies to be made having them all within one group.
She also seemed to rule out becoming involved in the bidding for the educational publishing assets put up for sale recently by rivals Reed Elsevier and Thomson, although admitting that their sales will "give us the advantage of a period of disruption among our competitors".
Finally, there has also been speculation about Dame Marjorie's own future at Pearson. She has clocked up 10 years as chief executive and last month turned 60.
"I have been here for a while it's true but we have had a lot of work to do to make this the kind of company we wanted to," she said. "We have had to change a lot but it has never been as thrilling an atmosphere as we are now in."