New York Times’ (NYSE:NYT) online visitors and online page views could see a rise with the forthcoming launch of Apple’s (NASDAQ:AAPL) new tablet PC, the iPad, which offers a better reading experience compared to the iPhone and iPod Touch. Taking cues from the positive impact of smartphones on nytimes.com viewership, we expect that the iPad can have some impact on the website’s unique visitors if iPad sales trend as we forecast.
With higher online viewership and page views, New York Times’ online advertising business could improve and replace the print advertisement business as the most valuable business for the company.
Below we explain the importance of the online advertising division for New York Times, and how Apple’s iPad could increase unique visitors to nytimes.com in the future.
Online advertising business 30% of NYT’s stock
The New York Times is one of the most popular newspapers in the US. Its website, nytimes.com, is as popular as the print version of the newspaper. The company’s online advertising business earns revenues mainly by selling advertisements against its web content. We expect the online advertising business to constitute 30% of $10.3 Trefis price estimate for New York Times.
iPad’s success could increase nytimes.com unique visitors and page views per visitor
We believe that iPad’s success can have an impact on the New York Times for two primary reasons:
1. NYT website has benefited from smartphones to date
- According to NYT management, nytimes.com had 75 million page views from smartphones alone in December 2009
- There have been more than 3 million downloads of the NYT iPhone app since the launch of the app in July 2008
2. iPad is better than smartphones for reading websites like the NYT
A few key features of the iPad make it better for reading text-heavy sites like the NYT:
- Bigger screen, more vibrant colors and sharper text compared to iPhone and iPod Touch
- Ability to view page in portrait or landscape view
- News sites can better preserve their formatting and typography (compared to mobile-only views for some smartphones)
Online unique visitors per month to increase to 60 million
We estimate that New York Times’ Average Number of Unique Online Visitors per Month was about 28 million in 2009 and that this will increase to around 60 million by the end of the Trefis forecast period.
We estimate that Apple will sell about 4 million iPads in 2010 and that this will increase to 12 million by the end of the Trefis forecast period.
You can modify our forecast here to see how New York Times’ stock would be impacted if its nytimes.com unique visitors were to increase more than we forecast as a result of iPad users.
Furthermore, the number of page views per visitor on nytimes.com could increase as existing online readers increase their usage of the site as a result of the iPad and greater mobile access to the NYT website. You can modify our forecast to see how higher page views can impact NYT’s stock.
For additional analysis and forecasts, here is our complete model for New York Times’ stock.
Disclosure: No positions