To Win the Lady

More critically, the Times Co. has little to fall back on as its newspapers struggle. Though it owns the About.com Web properties, which had revenue growth of 27 percent last year, the company derived 97 percent of its 2007 revenue from its news group division; chiefly, the Times, the Globe and other papers. Over the past several years, the company sold off cash-producing magazines such as Family Circle and Golf Digest to concentrate on its Times brand. Last year, the company sold its television stations to pay down debt.

Despite a recent run-up in stock price -- Times Co. shares closed at $19.69 yesterday, up more than $4 since mid-January -- the company's stock has lost more than 60 percent of its value in the past six years, down from a high of more than $50 in 2002.

By December, Times Co. stock was approaching a longtime low.

Enter Galloway and his hedge fund backers, smelling value.

Firebrand and Harbinger bought their first shares late last year. By January, their stake was 4.9 percent; by early this month, it stood at 9.96 percent and was growing seemingly by the day. As of Tuesday, the Firebrand-Harbinger stake had reached 11.82 percent.

And according to an SEC filing yesterday, Galloway and his hedge fund partners now own 15.61 percent of outstanding Times Co. shares, eclipsing T. Rowe Price for the top spot.

Galloway likes the Times newspaper but has no particular attraction to journalism or its mission. He targeted the Times Co. by using a mathematical ratio he employs to identify undervalued properties.

In his ratio, the number on top is the sum of a company's brand attributes -- how aware consumers are of the brand, how relevant it is, what people associate with the brand and how they feel when using the brand. Galloway assigns a value from 0 to 10 for each category. In his formula -- non-scientific and fungible as it may be -- the Times Co. gets a 9.5 for awareness, but a 4 for relevance because it's a newspaper, a declining medium.

The number on the bottom of Galloway's ratio is the sum of the company's financials -- its free cash flow, its earnings multiples, how it compares to other companies in its sector and so on.

If the top number is much larger than the bottom one -- in other words, if a company has a very strong, very positive brand but weaker financial performance, as with the Times Co. -- Galloway targets the company to determine "if there's some active intervention that can bring the ratio into equilibrium," said a source familiar with Galloway's thinking.

It was while getting his MBA at the University of California at Berkeley that Galloway learned the semi-science of branding, starting with his own.

He jokes that he has read the Economist on airplanes so passengers will think he's smarter than he is, as he has told people. At 6 feet 2, with the well-maintained physique of a college rower and an impressive patter about retail, Web strategies and return on investment, he makes a memorable first impression.