Financial Internet sites staging big comeback

IHT - NY Times: "When L. Gordon Crovitz, president of Dow Jones's electronic publishing division, sat down last spring to assemble a three-year strategic plan, he foresaw a potentially costly gap about to open. If the demand for online advertising continued to expand, Dow Jones's Web sites, including The Wall Street Journal Online, would not provide enough page views for all the online ads the company could sell.

Last summer, Crovitz set out to solve part of his problem by acquiring CBS MarketWatch, a financial news Web site. The only problem: Three other media giants apparently reached the same conclusion. Gannett, Viacom and The New York Times Co., which owns the International Herald Tribune and The Boston Globe, all joined in the bidding for the site. Many of the same companies that were burned by Internet investments before are bidding for these sites not just because of the growing online ad business but also because, like Dow Jones, they are worried that their Web sites will not be able to keep up with demand.

Spending for online advertising is expected to reach $9.7 billion in 2004, or about 3.7 percent of all U.S. advertising spending, according to a recent Merrill Lynch report. That number is expected to rise 19 percent this year as the largest American advertisers shift budgets from print and network television to cable and the Internet, the report said.

Old media has been snapping up new. In August, Viacom spent $46 million for the rest of Sportsline.com, in which it owned a minority stake. In December, The Washington Post Co. bought Slate, the online magazine, for a price thought to be $15 million to $20 million.

Dow Jones executives say that MarketWatch is a good fit. The Wall Street Journal Online and the company's other consumer news Web sites contributed about $80 million in revenue last year, or about 5 percent of the company's total. Just under $30 million came from advertising on the WSJ.com site, Crovitz said.

The MarketWatch deal will triple Dow Jones's online reach to about nine million unique visitors, while giving it more personal finance content, which is popular with advertisers. More important, the mostly free MarketWatch site would allow Dow Jones to get a greater share of the booming online ad market. WSJ.com is profitable, but constrained from attracting new visitors by the $79-per-year it charges readers who do not also subscribe to The Wall Street Journal or the weekly business publication Barron's."