Good day and welcome to The New York Times quarter one 2006 earnings conference call. Today's call is being recorded. (Operator Instructions) For opening remarks and introductions, I would like to turn the conference over Ms. Catherine Mathis. Please go ahead. Catherine Mathis: Thank you and good morning, everyone. Welcome to our earnings conference call. We have several members of our senior management team here today to discuss our results with you. They include Janet Robinson our President and CEO; Len Forman, our Executive Vice President and Chief Financial Officer; Scott Heekin-Canedy, President and General Manager of The New York Times. Martin Nisenholtz our Senior Vice President of Digital Operations couldn't be here today so we have Scott Meyer who is the CEO of About.com; Karen Messineo who is the CFO of NYTimes.com; and John Cantarella, the Group Director of Marketing and Operations from NYTimes.com. We also have Jim Lessersohn our Vice President of Finance, and Corporate Development; Stu Stoller, Vice President of Process Engineering and Corporate Controller; and Tony Benten, our Vice President and Treasurer. Our discussion today will include forward-looking statements and our actual results may differ from those predicted and the factors that may cause them to differ are outlined in our 2005 10-K. Our presentation today will include non-GAAP financial measures and in our press release, we provided reconciliations to the most comparable GAAP measures. Our press release is available on nytco.com. This conference call is being webcast and an archive will also be available on our website, as will a transcript. An audio replay will also be available and the directions to access that are in our earnings press release. For the first time, you can also download our conference call to your MP3 player, so we are truly becoming multi-platform. With that, let me turn the conference over to Janet Robinson.

Thank you, Catherine and good morning, everyone. Today we reported first quarter earnings per share of $0.24 based on GAAP compared with $0.76 in the same period in 2005. In the current quarter we had a charge of $0.04 per share related to staff reductions we announced in September, while last year's EPS included $0.46 from the sale of property. Our GAAP earnings came in at the high end of the range we provided in March. Advertising revenues at the news media group varied significantly from property to property. Overall advertising revenues rose 2% at The New York Times Media Group. Strong categories included residential real estate, where advertising increased as a result of greater inventories of homes to sell. Telecommunications, where we have stifled the effects of AT&T/Cingular merger and advertising for voice over Internet protocol technology is increasing rapidly; and hotels, where we have seen increased business from some of the major chains as well as tourist destinations. Advertising was soft in entertainment, which declined as a result of weak box office and fewer dollars being spent for Oscar-nominated and winning films. Media, which declined as networks reduced advertising during the Winter Olympics and classified automotive which was soft at our other properties as well. New products continue to increase ad revenues at The Times. One example is Play, The New York Times sports magazine which debuted Super Bowl Sunday and was a hit with national advertisers as well as sports participants and enthusiasts. It will appear three more times this year, with the next issue appearing during the World Cup in June. Another example is our special real estate themed Sunday Magazine. Based on it's strong success we plan an additional issue in the fall. At the International Herald Tribune advertising revenues grew 18% in the quarter…

Thanks, Janet. Total cost increased 6% in the quarter. Much of the increase came from staff reduction expenses and the acquisition of About.com, which we owned for only nine days in the first quarter of 2005. Excluding those two items, total costs rose 3.2%, driven primarily by higher distribution and outside printing expense, higher raw material expense, and increased promotion expense in support of our circulation initiatives. Newsprint expense rose 5.9% with 8.2% of the increase resulting from higher prices, which was partially offset by a 2.3% decrease from lower consumption. We continue to look for ways to conserve newsprint. In addition to the annual savings of approximately $4 million that we have achieved as a result of process improvements such as the use of lighter weight newsprint and waste reduction, earlier this month we changed the stock tables in the print version of The New York Times. As a result, we expect to save approximately $3 million in newsprint in 2006, and $4 million on an annualized basis from this action. We also introduced new tools on NYTimes.com to help people better manage their investment portfolios, as the Internet becomes the place where people look for financial information. Rigorous expense management remains a priority. We are achieving it with our efforts to improve efficiency in our operations and to redeploy our resources more effectively. Excluding staff reduction charges, About.com, raw materials, and D&A, non-raw material cash costs rose 2.4% in the quarter. To our various process mapping initiatives, we expect to achieve both revenue gains and cost reductions. As Janet said we are committed to improving our margins. This process of systematically reviewing all of our operations that we began in late 2004 is now fully integrated into our management systems. We expect to save approximately $45 million in…

(Operator Instructions) We go first to Brian Shipman of UBS.

Thanks, good morning. Just wondering if you could reflect a bit on the success of Times Select. Give us an update on how many subs you stand at there; what percentage of your subscribers to Times Select are paying? In other words, subscribers to the print addition obviously get it free. Also, I think you're giving away a 50% discount to university students or just students in general. What percentage are full paying subscribers? Thank you.

We are very pleased with our Times Select efforts. We currently have 465,000 subscribers, about 62% of those are home delivery subscribers. The remaining is paid subscribers, which of course is creating a brand new revenue stream for NYTimes.com. We do offer a 50% discount to college students for Times Select that has been very well received in the marketplace as well.

Can you indicate what percentage of the paying subscribers are full price payors?

Full price. It's $49.95 in regard to that 38%. The Times Select university which is the 50%, has just started. So the results of those are still coming in. The 38%, Brian, really reflects the $49.95.

What are your goals for how big this can get?

I think that's very hard to say. We are continuing to promote this. We are continuing to put new programs around the content that is available. You are seeing more video. You are seeing more podcasting. You are certainly seeing more opportunities for the columnists to do more with the Times Select offering. To put an exact number in regard to how large we think this is going to be, I think would not necessarily be in keeping with what our plan would be, but from a perspective of how we are looking at the initial effort, really, only six, seven months into it we are extremely pleased with what we have seen. In fact, we are constantly asked by our peers in regard to how well Times Select is doing.

Thank you, Janet.

We go next to Lauren Fine with Merrill Lynch.

Thank you. I just have a few questions. On the newspaper side just broadly, we know online was up over 20%, but were print ad revenues down in the quarter? If so, by how much? Then I'm wondering if you could give us a better sense of April trends on the newspaper side?

Lauren when you were talking about print revenues, could you repeat that? I didn't quite hear the question.

Yes. You indicated that the news media online ad revenues were up over 20%. Were the print revenues, therefore, down?

Lauren, they were down slightly, but they were up at The Times and they were up markedly at the regionals as well.

April ad trends at the newspaper.

It's very early -- at The Times newspaper or the newspapers overall?

I'll take both.

Okay. We'll give you both. It's very early in the month and it's important to remember that this is a five-week month, so giving a prediction certainly wouldn't be appropriate. But what we are seeing are similar patterns to what we saw in March, and we are still coping with challenges, needless to say, as I've noted in Boston but at The Times and the regionals I think we're seeing a pattern similar to what we have seen in March.

Do you want to comment on The Times? Scott Heekin-Canedy : I agree with that.

I guess the follow-up is, if you could help us quantify in the Boston market, the Macy's/Filene change. How big of an impact has that been? Can you quantify it either in dollars or what percent of the decline is it causing?

It has a very large impact on the Globe's revenues, as you can understand. I think it's important for me to put some information around the Boston situation. It's very clear that large metropolitan newspapers are more challenged than the mid and small market newspapers and we certainly are recognizing the factors that are contributing to the weakness in Boston. You all know we're dealing with the consolidation of many categories there, department stores being one of them. But airlines, telecom, banking, we're dealing with a migration to the Internet in very key categories, such as help wanted in automotive. We're dealing with exceptionally heavy penetration in broadband connection in that market which contributes very nicely to Internet growth, but it does hurt our print product and as I said earlier, there is slow population growth and a very weak economy there. Recognizing these factors are one thing, taking action to drive performance is certainly another. That's exactly what we're doing. As I noted earlier, there have been several senior leadership changes in Boston within the first quarter. There's a new President of The Globe, there's a new President of Boston Globe Media. There's new leadership at Boston.com. There are new senior advertising executives, new senior circulation executives, and through a retirement at the end of this month we have a new publisher of Worcester Telegram & Gazette. In fact, it is a publisher coming up from one of our Florida papers in our Regional Group. In that market we're also looking at a very strong cross platform sell that we just announced in the first quarter called Boston Globe Media, which really is a complete portfolio of products that we have there, including online, print, events, to mention just a few. This reaches 70% of the Boston market. A very strong drive towards productivity and efficiency in that market, very strong drive towards new product and service development and new revenue streams such as commercial printing, and a strong focus on acquisitions -- needless to say -- with the contributions that [Nesa] makes and Metro. It's important to note that we are having a pronounced discipline in effect in Boston for rigorous expense control and extensive revenue generation. The sizing of our cost structure there I think will certainly improve performance as the days go on.

Great. Thank you.

We'll go next to the site of Christa Quarles with Thomas Weisel Partners.

You have experienced some pretty dramatic increases and I think a lot of those are due to pricing, given that it hadn't been fully monetized as well. Do those begin to mitigate as you cycle over some of those price increases? Can you communicate what your volume versus CPM increases have been during the year? Also, can you remind us what percent of the traffic that goes to About.com is generated from search engine optimization? Thanks.

I didn't hear the last piece you said about search engine optimization?

Just a percentage of traffic that gets driven to the site?

Sure, I'll start there. 80% of the search comes in through search engines. In terms of revenue growth when we look at the quarter it has been about evenly divided between rate, volume and new products that we've introduced that we didn't offer a year ago.

Can you go through some of those new products, are they display format or are they--?

They are a mix of both display and cost-per-click products.

And when you say 80% from search engines, is that all natural or is there paid in there?

It's almost all natural. We basically spend a non-material amount on purchased traffic.

With the $1 million that is non-advertising, what does that relate to?

It is through our e-commerce partnerships and our SCO consulting and we have a small hosting business.

Thank you.

You're welcome.

We go next to the site of John Janedis with Banc of America Securities. John Janedis - Banc of America Securities: Hi, good morning. It sounds like you are moving toward maybe somewhat of an alternative distribution platform for content given the Discovery Times announcement. Does that mean you are considering selling the TV segment given that it is less targeted than cable networks? If not, why?

We do not comment on acquisitions or divestitures. I think that as Len noted in his remarks, we're very, very pleased with the relationship with Discovery. They were excellent partners, very similar values in regard to their commitment to quality journalism and quality programming. At this time we are focusing on short form video programming that indeed feeds the web. As I noted earlier, John, there is a very strong demand for video streaming on our websites. We're seeing more and more and more of that, advertisers are really coveting that, and in light of that, we are going to put a strong emphasize on that development. In fact when we announced our research and development team early this year, it was for the major purpose to look at ways in which we can extend content across the portfolio. That meant leveraging content in mobile, leveraging it in video as well. So the reason for that exercise of the put was primarily focusing on why indeed we wanted to put more emphasis in regard to video streaming. It's important to note that our broadcast business is very well managed and there are healthy margins and strong cash flow. Because of their focus on local news, they are very compatible with our regional newspapers. The tax basis on these properties is so low that if we did sell them, a considerable portion of the proceeds would go to the government. John Janedis - Banc of America Securities: Okay. Thanks. What kind of impact, if any, related to the release of the customer information in New England have on circulation or advertising?

There was a strong effect on the decline in home delivery. We were starting to see, in fact some very nice gains, John, at the very beginning of the year until this happened. It did have a substantial effect, but I will tell you that we are right now in the market in the last two weeks with a very strong win-back program that we're starting to see some very nice return on. As the year goes on, we expect that we are going to get most of those subscribers, if not all of them back. We took great care in regard to how we handled the response to the credit card situation. We were commended by the Attorney General's office in the way we handled it. We have received very positive response from our subscribers who were affected in regard to how we have treated them during this difficult situation. John Janedis - Banc of America Securities: Thank you, Janet.

You're welcome.

We go next to the site of Craig Huber with Lehman Brothers.

Thank you. How is your TV pacing is looking for the second quarter? The other question is, can you give us a preview of your March circulation volume numbers for the ABC for both The Times and Globe? Can you just quantify your non-newsprint cash costs in the newspaper division adjusting for these one-time items? Thanks.

The April pacings, I believe are in the 3.5% range with KAU TV. That's what we have as far as the pacings as they exist right now. The second quarter is flat with KAU TV and your second question was ABC-related I believe, Craig?

Yes, the circulation volume numbers for The Times and Globe audit coming up. Len Forman : The Times will be up slightly on this March statement for both Daily and Sunday.

In regard to the Globe, the Globe will be down both Daily and Sunday. We are fine tuning those numbers due to the credit card situation, so I don't have those numbers available to your right now, but we will definitely be down both Daily and Sunday.

But do you suspect it would be down as much as much as it was, roughly 8%?

I still don't have the numbers, Craig, so I wouldn't want to quote them.

I think you asked a question about our non-raw material costs?

Yes, in the newspaper division, yes, adjusted for the items.

Yes, we adjusted for About.com, depreciation and amortization we were up 2.4%. If you took KAU out we would be up 2.2%.

Is that the pure newspaper division number, up 2.2%?

That's total company costs.

So newspaper is probably pretty close to that then.

The newspapers would be very close, yes.

Thank you.

Craig, I just want to remind you that until we've filed with the Audit Bureau of Circulation we're not permitted to give out numbers. We can give you directional guidance but that's the extent of it.

Okay. Thank you.

We go next to the site of Alexia Quadrani with Bear Stearns.

Thank you. If you can give us some more color on your comments on the cost for the back half of the year. Could you give us a sense of how much lower you expect costs to trend for the back half of the year? Are these largely coming from incremental benefits from the staff reductions? Do you think we can actually see a margin expansion in the back half of the year?

I'll take the last question first. The answer is yes. We expect margin expansion. The cost savings that we're seeing are coming from a variety of sources, clearly we're beginning to see the staffing kick in. All of the process mapping initiatives that we are undertaking are beginning to have an effect. The first quarter had some cost increases that were discretionary that will not be there at the balance of the year. So we're very optimistic that even with modest revenue growth, you will see cost expansion over the balance of the year that will be less than revenue growth. As we may have said on another call, we have actually committed the Company to that as a goal, and it's a commitment that we're going to meet.

Could you remind us where you are on the color capacity and what your goal is for year end?

All our color capacity is in place as of fourth quarter last year. As a percentage of our total revenue base for the first quarter, we were about 27%. Our color premium growth year-over-year was in the high single digits. The first quarter traditionally tends to be a slower start to the rest of the year, but close to 10% growth year-over-year.

We go next to the site of Lisa Monaco with Morgan Stanley.

Yes, can you just quantify what the percent change was in movie studio advertising in 1Q? And what that category represents as a percentage of total for The Times right now? How do you expect that category to fare in 2Q? Thanks. Scott Heekin-Canedy : The entertainment category declined significantly for us in the first quarter, in large part due to the Oscar season this year, the uneven release schedule, the small distribution platforms, and the generally soft race among the contenders. We've continued to see weak holdover in the releases in the first quarter. All of that added up to a quarter that was significantly down for us in double digits. But for that decline, we would have realized close to mid-single digit growth overall for the business.

It's about 14% of the advertising revenues -- the entertainment category, Lisa.

Great. Thanks.

We go next to the site of Frederick Searby with J.P. Morgan.

Yes, thank you. Len, given your comments about your share price and your thoughts about the valuation, your share repurchase has been notably light, and I wondered -- I know this is not the easiest time for you to do that, but what your thoughts are going forward on share repurchase? Whether you are willing to leverage up the balance sheet a little bit to do that? Secondly, on help wanted it looks like online you haven't raised prices in quite a while. What is the pricing outlook on your online classified and what are your thoughts there? Thank you.

Fred, to be as straight-forward as possible we have clearly always said that share repurchase is done for two reasons. One it is to offset dilution from the issuance of options and exercise of options; and two, when we see it as a high return, alternative investment. We frankly see high alternative uses of our cash. If we're going to leverage our balance sheet, we would prefer to see another About.com. Our goal is to look for those kind of digital investments in our businesses, and I wouldn't rule out increasing share repurchases. Obviously at a certain price it becomes very attractive and a high return, but we think the share price will take care of itself as we drive our business going forward.

With regard to the online postings, job postings, Fred, we have not raised the prices on job markets since January of '05, but that's a relatively small percentage of the total. We had given increases in July of '05 and in January of 2006 on other products on the job market site. So those other products are packaged with our print product.

Thank you.

We'll go next to the site of Debra Schwartz with Credit Suisse.

Thank you. Another question on cost for you. I was wondering if you would give us a better sense on how costs in Boston specifically are trending? That entire balancing cost cuts with spending on the new product initiatives, that you mentioned earlier?

I'll do a brief one and Janet can jump in. Basically costs in Boston are flat to down, and we don't give that kind of information out specifically. But they are doing Yeoman work on managing what is a very difficult environment and we expect those trends to continue in Boston.

We are specifically -- and we have said this often -- about 18 months ago this Company took a very strong commitment to looking at productivity and efficiency in a very, very disciplined and rigorous way. Boston has been one of the poster children within our organization in doing so, they have done outstanding work. They have utilized not only a look at process mapping and efficiency, they have also looked at better use of technology, they have looked at staff reductions, they have exercised outsourcing options when appropriate. They have used every tool to their advantage, and they are continuing to do so. As I said earlier, they are sizing the cost structure of their business, but they are doing so with the core value in mind in regard to great journalism and how, indeed, they can create a richer experience for the reader. They are doing that, as I noted, by adding new products, but they are very careful in regard to how they are adding product and what costs of those products are being analyzed.

Thanks, that's helpful.

Thank you.

We'll go next to the site of Peter Appert with Goldman Sachs.

Two financial questions. First, the About margins at 40%, very impressive this quarter. Is that the target level? Is that the sustainable level of margins for About? And then on Discovery Times, was that a profitable enterprise? Did it contribute anything to the equity earnings line?

Peter, you didn't quite come through on the first question with regard to About. I thought I heard you say something with regard to margins but I wasn't clear. Could you repeat that?

Sure, the question is, is 40% the sustainable level of margins for About?

I'd say yes, at a minimum.

Okay. How about in '06, Len?

This, as you know, is a business that drops a lot of revenue to the bottom line, and we would expect those trends to continue, we would expect the revenue growth to continue. I would only wish it would grow as rapidly over the next couple of years as it's growing this year, but I just want to remind you that when we did the deal, the projections we used were very modest, essentially about what industry projections were. We said at the time that if we can achieve those that this would have a very high return. Well, clearly the numbers have been much, much greater than that, so while we don't think 70% to 90% is sustainable year in, year out, we are quite optimistic about the growth over the next couple of years and we think that as we look back five years from now, this will turn out to be an extremely inexpensive acquisition.

There is a very disciplined road map in place, Peter, in regard to the growth of About that I think supports what Len said in regard to not only sustaining these margins, but growing them. We are adding 100 guides this year and will continue to do so for many years to come. There is wonderful rate flexibility as well as our traffic increases, as I noted earlier, just within the last year the traffic has increased 40%. We are building out strong verticals in About, health being one where there is very strong traffic coming now, but there is real opportunity for that specific vertical and others to grow quite dramatically in the days to come. We also have international aspirations for About and very strong opportunities in regard to video and mobile with About as well. So there is a very robust game plan in place for what we can do with About, not only today but certainly for tomorrow.

Peter, I think you asked the question about Discovery and if it was profitable. It did turn modestly profitable this year, but as we looked in totality at our investments and uses of cash and took a very disciplined approach to it, the better move for us, the smarter move for us was to exercise our put.

Right. Got it. Len, a follow-up to an earlier comment you made. You guys have obviously done exceptionally aggressive work on the cost side, what do you think is a reasonable expectation over the next several years in terms of what the baked-in level of cost growth is we should assume? I'm thinking about '07, '08 timeframe.

Well, you're thinking way ahead of what we're thinking publicly. I think what you can assume is that the modest levels of expense growth that you have seen will continue going forward. We're committed to that. We don't believe that our process improvement work has run its course. We think there is still an opportunity to continue to leverage our shared service center, and we're looking at ways to involve the data centers and IT operations. So these are, we think, incremental gains on the expense side that will be with us for some time. We continually look to see those kind of improvements.

The discipline and the commitment, Peter, to this side of our business and consequently margin improvement is extremely robust within our Company. I think what I said earlier about The Globe holds true of the entire Company. We are utilizing every tool possible to make sure we are looking at cost reduction in a smart way for the Company. I'd also just add to Len's comment in regard to Discovery Times, we were very pleased with this relationship, they are great partners and we look forward to working with them on future opportunities going forward. But it's very important for us to constantly look at what we own within our portfolio and one of the things that we did was to look at this in regard to how that would fit with our future needs and what indeed we were focusing on in regard to the web and that short-form video that is becoming so lucrative for us, not only at NYTimes.com, but About.

Got it. Len, is it sort of 1% to 3%? Is that what I should think in terms of --?

Good try, Peter.

Okay. Thanks.

Next to the site of Paul Ginocchio with Deutsche Bank.

Thanks, Jan, recognizing what you said about Boston and broadband and the upgrade to The New York Times website. Just wondering what you thought of Jack Schaeffer's comments from Slate, he said the website was so good he was going to drop his print subscription… And sort of continue to think of how you monetize, get more revenue out of the website?

I may buy Mr. Schafer a subscription just as a gift so he can have the pleasure of reading it in a tactile fashion. From a perspective of him really praising our redesign at NYTimes.com, we're thrilled. It's very important, I think, for everyone to realize that we are very pleased with what we have done with this redesign. It is an extremely robust user experience. As I noted earlier with My Times being a real differentiating feature of the redesign, we really think that it will increase traffic quite dramatically. One of the things that I noted that you may not have heard, but I want to make sure that I reiterate it, is that advertiser opportunities with the redesign are much more robust than they were before. Not only in regard to the home page in regard to the size of the units, but also in regard to how much more inventory we think we will get by this redesign. The early responses not only in the press but even in regard to traffic analysis really bodes well in regard to what this redesign will mean for traffic consequently monetizing what the website can really mean for us.

Just sort of thinking back to your comments about Boston, what are the other opportunities for monetizing subscription revenue online? Thanks.

We are looking at Boston.com very closely, particularly to search. We have a huge search project in play right now that Michael Zembalist in fact is working very closely on with his colleagues in Boston to really accelerate our ownership of that market. We intend on being all things Boston, whether it be in print or whether it be online and we are investigating ways in which we can monetize Boston.com even more than we have right now. There are many learnings that we know we will get from the redesign of NYTimes.com that will migrate to what we see at Boston.com. We also see, because of search engine optimization and what About has brought to us in that area strong increase in traffic in Boston.com that's increasing inventory and consequently increasing their percentage of growth.

Thank you.

We go next to the site of William Bird with Citigroup.

I was wondering if you could talk a little bit of what is driving the improvement in pricing power at About? Thanks.

We have a five-point strategy and I think each of the five parts contribute to that rate growth. Content quality as Janet mentioned, we have added a number of new guides. We continue to make improvements in the site's design. We're investing in marketing the site both to the trade and to consumers. I think particularly there by explaining more clearly what About represents and the value we deliver to advertisers, it's giving us more flexibility in rates, and being a part of The Times Company definitely helps. It gives us more presence with the advertising trade and it's also enabled us to recruit better guides.

We go next to Michael Kupinski with A.G. Edwards.

Hi, this is Chris Ferris calling in for Mike Kupinski. Two questions on advertising if you will. You guys had some significant price increases at the beginning of the year, and I was wondering if any of the weakness that you are seeing in terms of New England or New York, could that be any push back from advertisers, or do you really see it as sort of a still more of a challenge to advertising environment? What do you think is the issue there? Secondly on help wanted, you were down 1.8% in the quarter, I believe. I think that's the weakest number you have had in quite sometime. I was wondering what do you think is going on with help wanted? Is it any particular market and do you see it improving? Was January and February just an aberration? Thank you.

Let me just comment on the rate increases. The rate increases at the beginning of the year were not peppy. At the regionals it was only 3%. At New England it was only 2%. At The Times it was only 5% which is in fact a little bit lower than in 2005 and certainly lower than 2004. So these are not robust rate increases and the softness in the advertising market is more a function of consolidation in key categories as opposed to rate structure. We are continuing, certainly to work with our advertisers, many of whom are on contract, but these rate increasing really aren't out of the ordinary in any way, shape, or form.

If you look at The Times ad performance against the backdrop of the industry, we're certainly in the median with where we're advertising growth has been. On the help wanted question, it's clearly related to markets. Our regional group is doing quite nicely on help wanted. Boston, as Janet noted, is a very, very tough economic environment and they are struggling with recruitment advertising at the moment, and New York is having a bit of a soft spot as well. So I think this is driven by economic conditions locally. It's not a reflection of changing shift from print to digital.

This is Scott Heekin-Canedy I'll just add a little bit to what Janet said. The rate increases we put in place for '06 are in a modest range, I would suggest, and in the first quarter we're realizing those rate increases. As I said in one of the earlier questions, but for the performance of the entertainment category our overall performance would be solidly in the mid-single digit range. We're seeing volume declines attached to a couple of categories that have their own industry specific challenges. That's best exemplified by entertainment and then recruitment, just adding to what Len said the New York marketplace is a challenged marketplace. There is no dominant market leader. It's a very competitive marketplace among the recruitment services offered. This has been a challenging category, I believe, for everybody in the market.

It just seemed to turn pretty quickly on you in January and February, but then it rebounded a little bit in March. Do you think January and February was an aberration? Should we look for better growth going forward? Or do you think it's a challenge going forward?

Our overall business in this category in particular has been extremely volatile with limited visibility for a couple of years now, and I wouldn't dare give you a direction with regard to that answer.

Okay. Thank you.

We go next to the site of Edward Atorino with Benchmark.

My questions have been answered a couple of times. Thank you very much.

We go next to Kurt Alexander with Media Group Investors.

Two quick questions. Can you quantify the first quarter benefit that you received presumably on the TV side for the Winter Olympics? Looking ahead to the fourth quarter, can you give us your anticipation of the revenue benefit from the extra week? And I have a quick follow-up.

Olympic revenue was about $1.5 million. It was small.

The extra week in the fourth quarter, that's just essentially 1/52 of the year or is that a particularly strong extra week you are getting, because it's the holiday season?

No it tends to be less. Obviously it's at the end of the year. It's at a time when I would not expect it to be quite as robust.

So sort of less than 2% then?

I wouldn't quantify it, but I would say just from a qualitative standpoint that certainly it's a softer period.

My follow-up is the stock over the last two years has gone straight down over 50% and yet total executive compensation has risen every year. This year I noticed in your prospectus that you doubled and in some cases tripled stock option grants to senior executives. Can you explain that philosophy?

I think from a standpoint of executive compensation, we look to be competitive in the marketplace, and it's extremely important for us to evaluate those compensations in regard to what is being paid in the marketplace within our industry. We are very, very focused not only in regard to looking at -- and it's important to note actual pay and target pay. Because when indeed you are analyzing executive compensation, many people make the mistake of not looking at what the actual pay really is as opposed to target. So I think that's a very important point to remember in regard to this.

Well, I notice that you haircut the bonuses because of the failure to reach certain targets and I guess that's commendable, but it looks like you made up for that by tripling the stock option grants. Would that be fair to say?

Our long-term compensation is very specifically tied to goals, and as I indicated earlier, we set for ourselves one of those financial goals of revenue growth over expense growth. So that when you look at actual compensation at the end of the year, as opposed to targeted compensation to Janet's point, the numbers will be reflective of whether or not we deliver on the financial goals. The only other comment I would make is that when it comes to executive pay, the Compensation Committee of the Board takes on that responsibility. They have a very rigorous methodology they follow, looking at where we fit or fall against a whole slew of companies, not all of which are media companies. They target the 60th percentile, and many of those increases that you saw were related to the targeting of the 60th percentile.

Okay. Thank you.

We have no further questions at this time and I would like to turn the conference back over to our host for any additional and or concluding comments.

Thank you everyone for joining us today and if you have additional questions please give me a call. Bye now.

Ladies and gentlemen, this does conclude today's conference call we thank you for your participation. At this time you may disconnect and have a great day.