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The publisher of The Age and The Sydney Morning Herald wants to cut up to 55 editorial jobs and is understood to be hoping to axe about 50 non-editorial positions.

Fairfax remained focused on containing and reducing the costs of its traditional publishing business, a move that showed the company was more reliant on online revenue, UBS said.

"We believe that this is absolutely the right strategy, albeit remains to be seen to what extend Fairfax can position itself at the forefront on the online business."

With lucrative classified advertising dollars migrating to the internet, online businesses have become increasingly important to media companies.

Earlier this month, PBL said it would combine its own online classified business with Carsales.com.au to create a powerful new online trading business.

News Ltd, the Australian arm of Rupert Murdoch's News Corp, has launched a takeover bid for property website Realestate.com.au as part of the media group's aggressive hunt for internet acquisitions.

UBS says a successful redundancy program at Fairfax should lift fiscal 2006 earnings before interest, depreciation and amortisation by half a per cent to about $532 million and another 1.7 per cent in fiscal 2007 to $529 million.

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