Martha Stewart aims to be an online leader

NEW YORK — Domesticity diva Martha Stewart aims to parlay her authoritative voice on everything about lifestyle to the millions of women who surf the Internet with the relaunch of her namesake Web site.

Martha Stewart Living Omnimedia Inc. — which scaled back its Web operation as a catalog/e-commerce business in 2005 — is set to officially relaunch marthastewart.com Tuesday as an information portal.

The overhauled site, quietly unveiled late last month, features more than 700 videos, including daily episodes of Stewart's TV shows and how-to clips, provides a community where users can chat about such ideas as the latest recipe for chocolate cake, and features a retooled search engine that allows users to browse either by interest such as the latest scrapbooking techniques or by media property from magazines to TV shows. It also allows users to search across 700 other Web sites to get the best resources.

This fall, Martha Stewart Living will be expanding its community sites and personalization features, which will enable users to save, share, review and collect content from the site as well as interact with each other through interest groups dedicated to specific passions like knitting.

"Martha Stewart is the most trusted lifestyle authority," Susan Lyne, Martha Stewart Living president and CEO, said in a statement. "We have a big leg up on other sites because our content libraries are so deep and our creative teams so prolific — we're a constantly renewed resource for consumers."

Martha Stewart Living has enjoyed a rebound over the past year and a half after seeing advertising revenue plummet amid the founder's personal legal woes. Stewart completed her prison sentence in March 2005 for lying to investigators about a stock sale. Since then, Martha Stewart Living has stepped up a number of initiatives, from new magazines to developing branded homes with builder KB Home and photo products with Eastman Kodak Co.

Such new ventures and the rebound in advertising revenue have helped turn around the business. Martha Stewart Living's profit rose more than fivefold in the fourth quarter from a year ago. Revenue rose 15 percent.

Shares are trading at the midpoint of their 52-week range of $14.76 to $23.21.

Martha Stewart Living's Internet business is one of the company's key pillars for growth. Marthastewart.com is expected to account for 10 percent of the company's overall revenue this year and should make up about 20 percent by 2010, Chief Financial Officer Howard Hochhauser said.

The Internet division, which broke even last year, should contribute one-third of the company's total EBITDA, or earnings before interest, taxes, depreciation and amortization, according to Hochhauser.

Based on the company's internal figures, marthastewart.com averages about 3 million visitors per month; the goal is to increase that figure to 10 million a month by 2010, according to Holly Brown, president of the Internet division.

As for its e-commerce ventures, marthastewart.com continues to sell flowers online, but the company has no intentions to be in the business of fulfillment.

Heather Dougherty, senior analyst at Nielsen/NetRatings Inc., said that because the online market is so fragmented, Stewart has the potential to be the leader of lifestyle online.

"Martha covers a lot of different areas," said Dougherty, noting that rivals offer specialized niches. "She has a loyal fan base that has stuck with her."

Brown noted that the company sees competitors such as ivillage.com, glam.com and foodnetwork.com, but none of them has a "figure head" like Stewart.

One of the key focuses at marthastewart.com is its Web community. The site has general message boards and highlights the company's latest publication, called Blueprint, with a blog called Bluelines. The site is generally limited to what is popular with Martha Stewart editors, but the company wants to let the online community connect with each other and talk about what they might do differently, Brown said.

Martha Stewart Living: http://www.marthastewart.com

Bluelines: http://www.blueprintmag.com/blog