London-based magazine publisher and radio group Emap PLC announced today that it is reducing its planned investment in online operations by 50 percent.
As a result of the reduction, the company said it would take a one-time £10 million (16 million euros) charge against earnings in the quarter that ends March 31.
This is the second, and perhaps not the last time Emap has re-evaluated its investment in Internet properties. The first cut came in November when it reduced its planned spending on new media from £200 million (320 million euros) over three years to £120 million (192 million euros), with £50 million (80 million euros) of that to be spent by March 31.
It had planned to spend the same amount next year, but in a climate of dwindling online ad revenue and a commitment to make Emap Digital profitable by 2003, even that investment began to seem too ambitious.
Now, Emap is planning to spend £25 million (40 million euros) in 2002, after which it expects its online properties to be cash-positive.
"These investment plans have been the subject of continuous review and it is now clear that not all of the planned investments will be able to achieve the rigorous financial returns required," the company said, in a statement.
All of Emap's "outdoor active sites" will be eliminated in the cuts, including golfermagazine.com, countrywalking.com and horseandpony.com. Also getting the axe will be online film site Screendaily.com, Mother & Baby, and TheClick.
Emap said that future digital investment would be concentrated on online properties where the group has a "strong competitive advantage" and where investment in online efforts is necessary to support its "traditional off-line assets."
Emap operates dozens of sites that support its popular magazine titles such as FHM.com, Q4music.com, thebox.co.uk and Mojo4music.com.
The move is the latest retreat of a traditional media company from loss-making online investments. Over the past year, United Business Media has sold off the bulk of its consumer-oriented online properties including Express.co.uk and Sportslive.co.uk.
Chrysalis Group similarly re-evaluated its online spending last month and decided to reduce its financial commitment to the medium by merging music site Puremix.com into its sport fan site, Rivals.net.