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| Management, Organization |
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Messages from Management
MESSAGE FROM AYDIN DOĞAN, 
CHAIRMAN OF THE BOARD OF DIRECTORSHürriyet will lead the way for future generations... National economies were significantly impacted by the globalizing world economy during this past year. Growing uninterruptedly since 2002, the world economy entered a tumultuous period in the second half of the year due to the financial crisis in the US stemming from the problems in the mortgage loan market. Esteemed Members of the Hürriyet Family and Dear Shareholders, National economies were significantly impacted by the globalizing world economy during this past year. Growing uninterruptedly since 2002, the world economy entered a tumultuous period in the second half of the year due to the financial crisis in the US stemming from the problems in the mortgage loan market. The slowdown that has so far plagued developed economies appears to be spreading to a much wider geography than first thought and is on its way to influencing the entire global economy in the upcoming period. Turkey weathered this turbulent period without slipping into an economic crisis during 2007, thanks to the economic program in effect as well as the lack of pervasiveness of mortgage loans in its banking sector. However, after growing an average of 7.2% annually since 2002, the Turkish economy performed below the forecasts as of third quarter of 2007. Also impacted by the volatility stemming from the general elections as well as the presidential election, the Turkish economy grew 5% in 2007. The primary factor that negatively affected growth in 2007 was the insistence of the Central Bank of Turkey for high interest rates to meet its inflation target and the ensuing adverse impact of this tight monetary policy on domestic demand, especially on the automotive and electronics sectors. However, due to rapidly rising oil and natural gas prices, inflation rate reached 8.4%, significantly above the Central Bank's target of 4%. Given the continual global price increases, it looks highly likely that the Central Bank's target inflation rate of 4% for 2008 will be exceeded as well. 2007 was a significant year in terms of renewed trust in macroeconomic stability despite the elections and other political and economic turmoil during the year. The achievement of the Turkish economy in maintaining its stability also helped Hürriyet reach its goals. The advertisement market grew 17% in 2007. The uncertainty caused by the two elections that were on Turkey's agenda impacted the advertisement sector as well. However, once the elections were over and the outcome feared by the market participants did not come to pass, the deferred demand began to turn into spending from the second half of the year on and the sector had a successful second half and an even better last quarter. Last year witnessed explosive growth especially in the online and outdoor ad channels. The share of online ads in the overall ad market reached 5% this year for the first time, up from 2% a year ago. Primary drivers of this growth were the rapid increase in Internet penetration and the commencement of Google Turkey. Factors driving the rapid growth in the outdoor channel were the increases in the outdoor advertising tools and areas, as well as technical improvements. 2007 has been a year of growth for Hürriyet. An important regional player in the global economy, Hürriyet stood out as the first and only media company in Turkey to be assigned a credit rating by an international rating agency. Moreover, the international corporate governance rating agency ISS assigned Hürriyet a corporate governance rating of 8 out of 10, after an assessment process that takes into account more than 530 criteria. Among the newspapers published in Turkey, Hürriyet has the strongest financial structure and is the first print media company in the world to announce its corporate governance rating. Daily average net circulation of Hürriyet reached 572,000 in 2007 with a 4.6% increase whereas its average market share reached 11%. Hürriyet's market share was 12.2% in total advertising revenue and 39% in newspaper advertising revenue. Hürriyet, with the largest share of the ad market among the media companies in Turkey as of year-end 2007, registered 17.3% growth in ad revenue during 2007 and maintained its market leadership in both sales and advertising revenue. Playing a major role in Turkey's modernization, Hürriyet has always stood out as a solution partner in overcoming social problems. Hürriyet's success stems from its journalistic approach that takes the public's pulse without deviating from its principles and core values. Many generations have grown up with Hürriyet in Turkey since 1948. Deriving its power from its 60-year history, Hürriyet will continue to lead the way for the future generations as well. I would like to thank all of our employees, shareholders and readers for their contributions, that has made Hürriyet what it is today. Respectfully yours.
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