Äripäev: In the Black and Gaining Market Share

In 2007, Äripäev enjoyed their most successful year ever, with a turnover of 14.5MM EUR and a profit margin of 20%. So what did they do next? They started laying people off.

"The outlook was very dark, and we were one of the first companies to start to fire people, thank God," says Äripäev Editor-in-Chief Meelis Mandel.

It may have seemed untoward at the time, but as everyone now knows, their preemptive measures proved prescient. The business-to-business market is down 70% and the business-to-consumer market is down 50%. Many media companies in Central and Eastern Europe are now deeply in the red given the world financial crisis. But Äripäev continues to turn a profit in 2009 - an extraordinary achievement by any measure.

"It's management skills and the skills from all the employees in Estonia that make this possible," says Casten Almqvist, CEO of Bonnier Business Press. "They are still constantly looking for new opportunities, new revenue streams, even when it's a little bit unorthodox."

That entrepreneurial tenacity has translated into broad portfolio of products that now includes business-to-consumer mailings, medical web acquisitions, and even a lifestyle magazine for affluent men, Gentleman.

Since its inception in 1989, Äripäev's business has expanded into almost every possible channel. From handbooks to events to Russian-language subsidiaries to business-to-consumer supplements, diversification has played a key role in the company's continuing profitability.

"We have to be innovative all the time," says Äripäev CEO Igor Rõtov. "You need to make life interesting and fun."

The company has written its own road map from the very beginning. In the summer of 1989, Dagens Industri Editor-in-Chief Hasse Olsson was one of the first people to sail into the harbor of Estonia. His grand idea - to publish the first economic newspaper on the territory of the former Soviet Union.

What began as more of a philanthropic project to bring free press to the Baltics soon turned into a money-making enterprise. "It's been from very early days the most profitable company outside Dagens Industri in Sweden - money-wise, not just margin-wise," says Almqvist.

Estonia has a total population of 1.4 million, making it one of the smallest countries in the EU. How could anyone have guessed that a project started in good will could begin to generate profit within four short years? "It was a surprise to people in Stockholm, but it was not a surprise to me," says Rõtov. By November 2006, paid circulation was up to 21,600, making Äripäev the newspaper with the highest penetration in the world.

This fall, Äripäev celebrate their 20th anniversary with the publication of a new book, 20 Years of Estonian Economy, participation in Blogfest, Estonia's biggest meeting for bloggers, the Äripäev 20 Business Open Golf Tournament in Otepää, and more. "We have a great future after this. We will recover faster than others. Our target is to increase our market share, including consumer markets," says Rõtov. "This is no secret - we want to be the biggest media company in Estonia, and that means growing by four or five times."

Staying profitable means being able to position themselves for growth once the economy recovers, though Mandel doesn't expect the downward slide to level off until the summer or next autumn.

"In editorial, the atmosphere, the mood is even better than I expected," says Mandel. "Journalists are programmed to find the negative in everything. Now we need to find something good, give people something good to read."

"Especially now, our readers need economic news," Rõtov says.

Also:

Meet Igor Rõtov, Äripäev CEO