Pearson Halves Net Spend As Investors Call For Closure Of FT.com

Pearson is planning to cut investment in its flagship web business, FT.com, by half following a dip in market confidence on the release of the group’s financial results last week. According to reports in the Daily Telegraph today, the group is expected to slash spend in the financial portal from £113m to just £40-50m.

Shares in the group fell 7% last week despite producing a set of results above analysts’ expectations (see Pearson Embraces The Internet Where Others Falter). The group reported that FT.com would start to break even next year, but profits in the company as a whole were 17% lower than last year following heavy investment in its internet arm.

The group spent a total £200m on its net businesses last year, a figure which is one of the highest amongst major media companies. With confidence in the internet sector at an all-time low (see Yahoo! Issues Further Profits Warning), some investors have called for FT.com to be closed.

Pearson has rejected this option saying it would be “completely nuts to give up at this point”, but it is looking at significantly cutting marketing spend for the site, which reached £40m last year. Plans for a hiring freeze have also been mooted.

Yesterday was business as usual, however, with the group announcing a content sharing deal with Hoover’s, a US business information service specialising in company profiles.

Pearson: 020 7411 2000 www.ft.com www.hoovers.co.uk