Bertelsmann, Europe's biggest magazine publisherhas announced a 30% decline in profits due mainly to a loss of advertising
Julia Kollewe writing in guardian.co.uk, Monday 31 August 2009 16.22

The advertising slump has hit half-year profits at Germany's Bertelsmann, whose media empire spans television, magazines and book publishing.

Its Random House publishing division, home to bestsellers such as Danielle Steel and Dean Koontz, also saw revenues and operating profits fall while Bertelsmann's service division Arvato – the only business to see any growth – posted a slight gain in profits.
Bertelsmann, which has been controlled by the Mohn family for the past century, said cost-cutting measures had cushioned the impact of the global downturn on its businesses, although it still expects revenues and operating profits to fall over the whole year. "The extent of the year-on-year change will be determined by the severity and duration of the cyclical downturn," said finance chief Thomas Rabe.
The media company is taking 2,500 austerity measures to save more than €900m (£792m) across the group this year.
For example, it has cancelled its lavish party at the annual Frankfurt Book Fair, one of the most sought-after invitations of the year. The party is usually held jointly by Random House and DirectGroup, which runs Bertelsmann's loss-making book club interests. The decision is a further indication of the tough market in publishing and book clubs. Bertelsmann sold its UK book club business at the end of last year.
Hartmut Ostrowski, Bertelsmann's chief executive, said: "Our strict cost discipline is beginning to have a significant positive financial impact. Every division, including group headquarters, has systematically reviewed all costs and structures. We are resolutely countering the decline in advertising-related revenues."
He added: "The second half of the year will still see cost cuts, but at present we expect that the programmes we introduced will be sufficient to steer Bertelsmann safely and successfully through this difficult economy."
The full story at The Guardian online.