A Case Presentation on

New York TimesPresented to : Presented By:Prof.Krunal Joshi Jagruti Gammar (A-13) Neelam Malik (A-19) Ankit Mehta (A-29) Minesh Prajapati(A-43)

Introduction About CaseScott Meyer ,GM of NYTimes.com website

for New York Times NewspaperLisa Desisto ,GM of Boston.com website

for Boston Globe which is England’s largest regional portal.

Both websites were operated by New York Times Digital(NYTD),a division of New York Times Company.

Meeting on September 28,2001,the main focus is on Possible changes to NYTD’s Organizational structure.

Martin Nisenholtz,CEO Of NYTD

The New York Times Company In 2001,Company owned a variety

of media properties like New York Times newspaper, the Boston Globe, Worcester Telegram & Gazzate and 14 other regional newspaper,located primarily in the southern U.S.

Broadcast media Properties accounted 5% of Revenues and NYTD Accounted for 2% of Total Revenues.

The New York Time -Brand as a most valuable Asset

Won 79 Pulitzer Prizes more than any other newspaper

Profitability of newspaper operations sensitive to Economic Conditions.

Organizational structure and leadershipSteve luciani, 2 employees from the news

desk and an advertisement executive were assigned to the new web side project.

Expert Martin Nisenholtz was hired as a president of NYTD.

There was “Chinese Wall” between Editorial and business side of org.

Company increase investment in online operation.

AS newspaper staff and NYTimes.com was supervised closely there was similarity in culture and decision making biases.

Insufficient resources devoted to NYTimes.com

Two major decision:New operating decision which report directly

to Corporate rather than news paper management.

“tracking stock” which raise capital at internet valuations.

NYTimes.com experimented with several org structure.

Culture and valuesThe NYTNP was steeped in tradition and

operationally vary conservative.AT the time of separation distinct internet

culture created.Experimental culture. Bureaucratic

controls,procedure and paper work minimized.

Team approach was emphasized.Culture was modern and diff from corporate

HQ in NYTD.

Hiring and CompensationHiring policy were modified to support

distinct culture.Young, smart, ambitious and with .com

experience were hired.Remove of pension program.

The Budgeting Process

•Budgeting process was completely integrated with the corporation.

•Financial commitment.

•NYTD invested aggressively in creating a world class IT infrastructure which is dedicated to interactive media, that supported news paper operation.

Cont……• NYTD developed bottom-up approach

to budgeting.• To help generate ideas, NYTD

constantly reviewed usage data for its websites.

• Promising ideas were assigned to product manager.

• Evaluation would be done by senior executive team, by using combination of loose net-present- value analyses and experienced judgment.

Lot of guesswork involved in projecting revenues.

In late 2000 and early 2001, the financial resources become primary constraint.

Performance Evaluation• Financial performance vs. forecast and

budgets, and long term path to profitability would influenced the performance.

• Other dotcoms revenue growth become the most significant influencer.

• In 2000 they get the revenue which is double what they had budgeted.

• Positive impact on the value of the New York Times brand.

Conflicts with the core business Editorial Operations and New York Times Brand

Newspaper industry had adopted the separation of editorial and business operation

Some of more innovative and successful additions are coming from cross functional collaboration

Advertising Sales Traditional newspaper customers were not ready because

1. They Don’t understand the new media2. Hesitant to put customer relationship at

risk3. Digital sales were expected to be very

small

Subscription Sales offering free newspaper content on the

internet would have a negative impact on subscription sales

Compare the readers of website and newspapers

web readers are different audience- younger, affluent & geographically dispersed

Survey & focus group failed to support fear of online newspaper

Websites are viewed as complementary assets than as competitors

Websites become trial use of the newspaper & become the source of new subscription

Questions

Question 1:Describe NYTD’s evolution to

date.What is the strategy of NYTD?Are the Organizations and control

consistent with the strategy?

New York Times Digital’s EvolutionNYTD had developed and was operating two

websites: NYTimes.com and Boston.comNYTD also responsible for managing the

Company’s Digital Archive Distribution Business

There is a Sophisticated Information Technology systems automated significant portions of the process of converting newspaper content to website content.

Access to NYTimes.com free .User Registration to website with Demographic

information which serves advertisements to Target Audience.

All Revenue for NYTimes.com was generated by selling Advertisements on websites.

NYTimes managed its own sales force and selling display ads.

New products were introduced regularly to website.

Strategy of NYTD1.Advertisement related strategy2.Free online Registration3.Decentralize to Centralize4.One website for all information5.Classified advertisements6.Crossfunctional operationYes, the organizations and control

consistent with the strategy.

Que.2 What the impact had on the rest of the company?

Many senior newspaper executives would have been actual uncomfortable with entrusting priceless New York Times brand to an operating unit that they didn’t control.

Developed values and culture similar to newspaper

Decision making biases“Tracking Stock”(Tracked the performance of

division within a corporation) ,NYTD enable to raise capital at Internet Valuations rather than newspaper Valuations.

A team approach and a spirit of openness were emphasized/

Information was shared. Decision making was Transparent.

Hiring Policies were modified to support the effort to create a distinct culture.

Budgeting Process was completely integrated with that of corporation.

Performance evolution more based on financial data or other qualitative metrics.

Several Areas of friction were at top of mind due to overlap between the operations of core business and NYTD.

Q-3 : How does the way NYTD is managed compared to the way a Venture capital firm manages a Start Up? What insights if any, do

you draw from this Venture Capital: 1. Different stages of finance2. It might bring culture which may not be suitable

for growth3. Increased intervention may increase lead time

of product development

Company: 1. Company management’s decision would be the

final decision 2. Company can increased its investment in any

condition3. They can choose their own culture4. Bottom up Approach

Que .4 What Impact do internal perception of NYTD’s performance have on its operations? Initially they focus on revenue generation only, not

concerned about expenses. Performance evolution based on forecast revenue-achieved revenue Company revenue- competitors revenue By the end of 2000, they are having pressures to

achieve profitability, and for that they were increasing the operating efficiency by centralizing operations.

Performance evolution based on operating problems

Initially the two divisions editorial and business were operating separately. But Some of more innovative and successful additions are coming from cross functional collaboration

Que :5Would you change in NYTD’s existing organizational structure?

Yes as a manager I would change organizational structure.

Environmental changes and organization’s increased product line compel to change in structure.

Que.6(A)How would you change the culture and leadership style?

There should be informal culture as they are hiring young employees to retain them.

There should be some necessary distance between senior executive and other employees.

Internet’s culture should meet with culture of head corporate.

Should be coordinating leadership and decentralized functionality.

(B)How would the change in NYTD’s likely Budget?

AS there is already lot of investment in IT infra, there should be less investment in it further.

Employees salary structure should be revised.Outsourcing of HR activities which are

necessary for new projects of NYTD.There should be long term budget but changes

should be updated weekly or when most necessary.

Senior staff should be paid as per there experience and caliber.

Proper allocation of finance to have necessary resources.

(c).The way NYTD’s performance is judged?????

NYTD’s performance is primarily evaluated by the following questions:

1. Can we tolerate the loss we are generating?

2. Are we having any significant operating problems?

3. If any damages being done to the core business or the core brand?

(d). The way new ideas for the websites are generated?????

Cross functional culture Innovative ideas from

employees are appreciated.