The New York Times Company (NYSE:NYT) is seeing increased traffic to its site from mobile users. Management attributes the surge in part to new iPhone and iPad apps, such as the Editors’ Choice app, that allow mobile users to access specific content in new ways.
The New York Times competes with Yahoo (NASDAQ:YHOO), Google (NASDAQ:GOOG), Microsoft (NASDAQ:MSFT) and AOL (NYSE:AOL), among others, in the online advertising business. We believe that mobile phone apps will help NYT attract more unique visitors. In part for this reason, we are raising the Trefis price estimate for NYT’s stock from $10.75 to $11.35. Our analysis follows below.
Mobile Traffic on the Rise
Online ads have become a more important business for the New York Times in the last few years. They now contribute up to 26% of total ad revenues, according to the company’s second-quarter earnings report, compared to 22% in the second quarter of 2009. We estimate that online advertising constitutes around 21% of the $11.35 Trefis price estimate for NYT’s stock price.
The New York Times site attracted 106 million page views from mobile users in June alone. We estimate that the average site visitor views around 100 pages per month. This suggests that the site is now drawing more than one million monthly unique visitors from mobile phones.
We expect total monthly unique visitors to increase from 28 million in 2009 to 60 million by the end of the Trefis forecast period. You can drag the trend-line in the chart below to create your own unique visitor forecast and see how it impacts the New York Times Company’s stock price.
As smartphone usage rise, we believe the New York Times could attract unique visitors from mobile phones at a faster rate. If the Times site attracts a total of 70 million monthly unique visitors in 2016, instead of the 60 million visitors that we currently forecast, there could be a 5% upside to the company’s stock price.
New iPhone and iPad Applications
In the last quarter, NYT released several new iPhone and iPad apps that have been downloaded 4.5 million times so far. They include:
- NYT Editors’ Choice: NYT released this app in the last quarter for iPad. The Editors’ Choice app provides the latest news, opinion, features, arts articles, and videos. It has been downloaded more than 400,000 times already.
- Calorie Count: In the last quarter, NYT launched this dieting app on iPhone.
- Scoop: This is another iPhone app which was quite popular and has already been downloaded 100,000 times. It gives information about restaurants, bars and events happening around the city.
Disclosure: No positions