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Pearson “Happy” With Online Take-Up But Loses £188m in H1

News, 31 July 2002


There’s grey news and dark grey news from Pearson group, the London-headquartered international publishing and business information giant.

The grey news is that paid subscribers to FT.com (the online version of the Financial Times which has 2.8 million unique monthly users) now number 17,000 since the site went partially chargeable in May.

Chief executive Dame Marjorie Scardino declares herself “happy” with the takeup of just 0.6%, claiming: “The revenue is outstripping what we expected and more people are taking the more expensive service.”

FT.com’s main online news service remains free but users must now pay an annual subscription of either £75 or £200 to search the site’s extensive archives, dependent on the level of service. Given that the FT’s main online rival is the all-subscription WSJ.com (Wall Street Journal) with around 640,000 subscribers paying $79, some observers believe the FT to have adopted an unduly timorous business model.

To date Pearson has invested £200 million in FT.com and other web ventures which – despite the “tough” online ad market – it expects to break even in the last quarter of 2002.

And now for the dark grey news.

Pearson also announced a pre-tax loss of £188 million ($295.54m; €300.48m) for the first half of the year and would not rule out further job cuts or the sale of any part of the FT newspaper group – save FT Business.

Group operating profits plummeted by 24% to a total of £38m; while the flagship FT newspaper was worst hit with a 78% plunge from £32m to £7m year-on-year – this before the recession really began to bite.

Pearson has been badly hit by the downturn in business advertising and plans to implement “cost management” across its entire business publication portfolio.

Scardino also hopes to lure more luxury goods advertisers to the business bible: “We're trying to get Louis Vuitton into the pages of the Financial Times,” she confided.

Data sourced from: MediaGuardian.co.uk; additional content by WARC staff