Mail Online expects to become profitable this summer

Mail Online is expected to turn a profit for the first time this summer, and is predicted to bring in £100 million a year in revenue within five years, the site's publisher has told investors.

Speaking at a Daily Mail and General Trust investor day in London yesterday, Martin Clarke said the website was "very close to breaking even" and said Mail Online no longer considered newspaper websites to be key rivals - but bigger online-only players such as AOL-Huffington Post and MSN.

He said: "Last year, our revenues were £16 million. This year, despite a considerable investment in the US, Mail Online is very close to breaking even on revenues of a little over £25 million. In fact, we expect to be in monthly profit from July.

"To get to a monthly operating profit will have cost us an investment so far of just £25 million to build the biggest newspaper website in the world.

"Next year, we expect revenues to approach £45 million. Within five years, we predict they will be £100 million a year."

He added: "If the last two years have proved anything, it's that we're actually quite good at this business."

"If the last two years have proved anything, it's that we're actually quite good at this business"

Clarke compared Mail Online's growth - and its late arrival on the scene - to a game of Monopoly, telling investors: "Two years ago, we running around the board like mad, as a late entrant into the game, just trying to buy whatever we landed on.

"We weren't being too sophisticated about it - we were in a landgrab. The revenue could come later. We've landed on some pretty decent properties."

He added: "Two years ago we asked you as investors and the market in general to back what some people may have considered to be just a massive hunch. We explained why we believed at DMGT that we had made the right decision not to put up a paywall around Mail Online.

"At the time, many in the newspaper business believed paywalls were the only viable digital future for newspapers. We didn't think that then and we certainly don't think it now."

Clarke said a large part of the Mail Online's growth was down to "crucial loyalists" who were "addicted to the home page" - and he said the site considered these visitors to be much more important than boosting traffic through search or social media.

He said: "What we're really driven by are the number of people who choose to visit our home page directly, rather than coming to us via a search engine or a social network.

"It's sometimes said by media commentators that Mail Online chases clicks. Well, yes, we do, but not on Google, Facebook or Drudge. Those sources of traffic are brilliant, but you can't build a business around them.

"We don't pay one penny in promotion, we've never paid one penny for search"

"Those third-party referers, we see as sampling opportunities. We don't pay one penny in promotion, we've never paid one penny for search. A one-off referral won't make a visitor come back time and time again so there's no point paying for that kind of traffic.

"We don't do stories because we think they'll be picked up on Google, or Facebook or Drudge, or go viral. That's not why we do content. We do the content that we think will delight and entertain the readers of our home page. It's those people addicted to the home page who drive our growth. They consume 80 per cent of our page impressions."

Clarke also said Mail Online today had a "new competitive set". He told investors: "Our aim is to become quite simply one of the biggest digital news providers in the world. We're already bigger than BBC News, the New York Times, Fox News and ABC News - and we're not that far behind digital-only giants like AOL-Huff Po and MSN.

"Every one of those rivals employs three, four, five or even ten times more online journalists than we do."

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