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BREAKING NEWS & VIEWS

The Knot Ties In Profits From Diversification, Localism
Friday, August 7, 2009
Steve Smith

More national magazine properties are looking toward e-commerce and local markets to drive the next generation of growth, and bridal planning company The Knot’s modest gains in the second quarter suggest there may be profit down both of those business paths. The Knot, a publisher of national and local magazines as well as TheKnot.com, reported today a net revenue increase of 3% over Q2 2008, with local ad dollars leading the way with a 7% rise over 2008. Merchandise revenue rose 14% from the purchase in May of a wedding supplies e-commerce company. Operating income rose 10% over the year ago period despite pressure from the registry and publishing side, which was down 9% from Q2 2008.

The Knot’s extension into local media seems to be paying off. The company developed 160 niche sites that aggregate wedding planning information, sponsors and services, often down to the county level in a given state. The Knot says its goal is to reach 200 such niche sites this year and it is already seeing a 17% increase in traffic to the local sites. In fact, local online revenue for the company in the first six months of 2009 was $17.2 million compared to national revenue of $9.8 million. Nevertheless overall net income fell from $2.87 million in the first six months of 2008 to $403,000 same period this year. CEO David Liu said in a company statement, “Macro-economic conditions continue to negatively impact our local wedding vendors, retail clients and national advertisers, creating a challenging climate for our media business and unpredictable results for our retail-dependent revenues. We do not anticipate a general recovery anytime soon.”

The Knot also claims its social media outreach is gaining traction. A Facebook app for expecting and new moms, Mommyhood, has attracted 200,000 users in two months. It was developed by a company The Knot acquired in January, WedSnap, which has a WeddingBook Facebook app that has been adopted by 550,000 users. With cash in hand of $73.2 million and no debt, The Knot’s CFO John Mueller also said the company would continue to look at “opportunistic acquisitions.”

If you have breaking news to share please contact Steve Smith at ssmith@accessintel.com

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