CEOs Discuss Media: CNET, McGraw-Hill, Dow Jones, Getty Images

Quotes from CEOs and CFOs on recent earnings conference calls, discussing their companies and markets:

CNET CEO Neil Ashe

Total revenues were $118.4 million, up 14% from the year-ago quarter and ahead of our expectations. We saw strength in both existing and new business during the quarter, with strong performance from our focus on general consumer advertisers. The fourth quarter is a seasonally strong quarter, especially for general consumer ad dollars, and we saw increases in spending from several notable categories including auto, consumer packaged goods and financial services...

Today, emerging media is taking many forms: blogs, podcasts and vodcasts to name a few. Crave is a fantastic example of our ability to generate emerging media. Crave is a gadget blog that we launched in October at CNET. We chose some of our passionate editors and we turned them loose at crave.cnet.com.

The results have been impressive. Averaging 20 posts per day, Crave has close to 2,000 posts so far. Most importantly, users have flocked to Crave. In December, just two months after launch, over 800,000 unique users visited Crave; and during CES, Crave had a record day with over 350,000 page views. At this pace, Crave will be the largest tech-related blog very soon...

The ZDNet blog network is another example of combining one of our market-leading brands with industry-leading voices to the benefit of our users. Launched in late 2004, ZDNet now hosts over 30 industry-recognized writers and commentators who host the conversation on the most important topics in business technology. Some of the bloggers are CNET Networks employees -- and some are not -- but importantly, all are chosen by us.

Again, the results have been impressive. According to internal logs, the ZDNet blog network reached over 2 million business technology decision-makers in November. We are the friend of high quality content producers and these examples demonstrate our desire and ability to incorporate independent content producers into our branded media environment. As we embrace emerging media, we remain true to who we are and what makes our brand special.

• Excerpted from the full CNET conference call transcript.

The McGraw-Hill Companies CEO Harold McGraw, III

We reported that earnings per share increased 8.6% to $2.40 for 2006 and by 12% to $0.56 for the fourth quarter. Revenue grew by 4.2% for the year to $6.3 billion and 3.4% to $1.6 billion in the fourth quarter...

With continued strength in financial services and a rebounding education market, we’re poised for double-digit earnings growth in 2007. All segments will contribute to this performance with improving operating margins...

Off a small base, revenue at BusinessWeek.com grew by 45.7% last year, and we are looking for more growth in 2007. Business Week’s ad pages were essentially flat in 2006 and up 1.6% in the fourth quarter. We expect some improvement at Business Week this year. In total, advertising contributed slightly less to the corporation’s revenue in 2006, about 5.3% of our revenues is in advertising, and that compares to 5.6% of the total revenues in 2005.

• Excerpted from the full The McGraw-Hill Companies conference call transcript.

Dow Jones CEO Richard F. Zannino

Our long term strategy is straightforward. We want to:
- Transform Dow Jones from a company heavily dependent on print revenue to a more diversified content-driven company, meeting the needs of its customers across all consumer and enterprise media channels;
- We want to attract more customers and encourage them to use us across all media channels;
- We want to diversify our reliance on unpredictable print revenue;
- To smartly manage our costs; and finally
- To generate superior value for all our customers and shareholders...

...At our Consumer Media Group, fourth quarter revenue increased 5% on a 6% gain in ad revenue and 2% gain in circulation revenue. Expenses declined 3.6% due to lower marketing, depreciation and compensation costs as a result of our restructuring and outsourcing initiatives.

We’ve said in the past that $0.80 of every incremental ad dollar flows thru to the bottom line. In the fourth quarter at CMG, this “flow-thru” was 176%. This, together with strong profit performances at Dow Jones Online and our international operations led to a 217% increase in operating income in the quarter and a 760 basis point improvement in operating margin to 11.3%.

For the full year, CMG revenue was up 8% on a 9% increase in ad revenue and 5% increase in circulation and other revenue. Expenses were up about 4%. Flow-thru, adjusted for a full year of Weekend Edition and newsprint prices, was 105%. This drove a return to profitability at this critically important segment, though the operating margin is still unacceptably low at only 3.0%.

In the quarter, the print Journal posted a 5% ad revenue gain despite a 1% drop in ad linage. For the full year, the print Journal’s ad revenue was up 9% on a 6% increase in linage. We’re very pleased to have increased our ad yield in such a tough and highly price-competitive print environment. We’re also pleased to have taken market share from our primary print competitors.

• Excerpted from the full Dow Jones conference call transcript.

Getty Images CEO Jonathan D. Klein

Turning to our Editorial Imagery business which, as you know, is news, sport, entertainment and archival imagery, we had another very good quarter and grew 18% year over year on a currency-neutral basis. All parts of this business did well, but entertainment led the charge. Growth in revenues was more than 50% in the quarter. This is the third consecutive quarter of growth in entertainment imagery in excess of 50%.

Our world-leading sports photography business goes from [strength to strength], and we continue to be delighted by our news business. More importantly, the customers are very happy with a product and service which, of course, we know will move to an altogether new level with the launch of the new website, but more on that later.

Footage or Film continues to represent what we think is one of our best and biggest growth opportunities. In the quarter, we grew film sales about 11% on a currency-neutral basis. We’re adding content, continuing to enhance the digital workflow for film, educating customers and potential customers about the advantages of using pre-shot film clips for their project. We will continue to invest in this product line to drive growth. In fact, 2007 will be a very big year for film and is one of our five key initiatives.

• Excerpted from the full Getty Images conference call transcript.