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Reader's Digest spins Web
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February 25, 1999: 12:42 p.m. ET
Publisher plans to invest $100 million in Internet as part of growth program
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NEW YORK (CNNfn) - Reader's Digest said Thursday it wants a stronger Internet presence and will spend $100 million to make it happen.
The Pleasantville, N.Y.-based publishing company said it will make investments in Web sites that "fit the Reader's Digest brand and strategy." It also said it will use its magazine and directing marketing operations to drive traffic to those sites, which it said would be re-branded or co-branded with the Reader's Digest name.
The publisher also plans to enrich the content of its 20 existing Web sites and enhance their interactivity and turn them into "online communities."
"With all of these online activities, we will constantly learn more about our customers, their interests and their needs," said Reader's Digest Association (RDA) chairman Thomas Ryder.
The Interest investment is part of a new strategy to enhance the company's growth that was described to financial analysts and company employees by Ryder.
The company chairman said Reader's Digest will focus more on five targeted areas of consumer interest: home, health, family, finance and faith. He also said the company will start selling products other than magazines. Among its plans are direct marketing of pharmaceuticals and the marketing of branded insurance and credit cards.
Ryder also said Reader's Digest would develop new avenues to market its products, including direct response TV and mail that doesn't include the company's popular sweepstakes.
"Our plan will allow Reader's Digest to deepen the relationship we have with millions of customers who are 50 and older - the fastest growing and wealthiest demographic -- and to attract new customers to a range of new products under the Reader's Digest brand," Ryder said.
Reader's Digest Association had revenue of $2.6 billion in the fiscal year ended last June 30. But the company has been struggling a bit. It was forced to implement a restructuring plan last year that included layoffs, a sharp reduction in its dividend and the sale of a portion of its art collection.
Reader's Digest stock was up 1/4 to 30-13/16 in midday trading Thursday.
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Reader's Digest
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