Martha Stewart Living Omnimedia (NYSE: MSO) reported a 1Q loss of $12.6 million, or 23 cents per share, versus a loss of $7.7 million, or 13 cents per share, in the year-ago period. The growing loss was partly related to investments in the company’s syndicated TV program, The Martha Stewart Show. On a positive note, revenue rose 7.4 percent to $66.7 million from $62.1 million, driven by gains across its publishing, merchandising and internet businesses. Other highlights:

-- Online revenues rose 20 percent year-over-year to $3.5 million in 1Q from $2.9 million the year before, driven by 38 percent growth in ad revenue.
-- Also in the online segment, the operating loss was $2.5 million in the quarter, which the company attributed to higher expenses as we invested in staff and technology related to the relaunch of its primary website.
-- MSLO said that the decline in traffic was anticipated as web search engines re-index the new site. Still, the company claimed that the falloff was more modest than expected. During the first quarter, MSLO had, on average, 35.5 million pageviews per month and 2.5 million unique visitors per month. The average time spent per visit was 10 minutes. In 1Q06, those figures were 39 million pageviews per month and 2.3 million unique visitors/month in the prior year’s quarter when the average time spent/visit was 9 minutes. More to come. Earnings release |Webcast | Transcript (SeekingAlpha.com)

-- Update: MSLO has three online revenue drivers, CFO Howard Hochhauser told listeners on the morning conference call (according to the SeekingAlpha transcript): advertising, digital products and its flowers business. The company plans to spend an incremental $500,000 to $1 million into additional marketing programs to help drive traffic in the second-half of 2007. “Over the past year, we have grown our internet cost base to a level that we think positions us well to drive meaningful revenue growth in 2007 and 2008. Ad revenue growth is our key focus and we continue to believe we can double our online ad revenue in 2007. Much of that revenue will come in the second-half of the year,” Hochhauser said.