FRANKFURT (Reuters) - After its failed bid to buy the Financial Times, Germany's biggest news publisher Axel Springer (>> Axel Springer SE) will concentrate on digital expansion through small and medium-sized deals, the company said on Tuesday.

Springer was outbid last month by Japan's Nikkei in an attempt to buy the FT from Pearson (>> Pearson plc). Nikkei's bid of $1.3 billion (833.92 million pounds) pipped Springer's by just 100 million euros ($110 million).

Chief executive Mathias Doepfner did not rule out large deals in future, but he said he saw few assets on the market similar to the FT, with its strong brand name and significant digital potential.

"We gladly would have bought the FT," Doepfner told reporters on Tuesday. "But in the end the price was too high ... It is important to regard price discipline."

Doepfner had long sought to buy a big English language title, but the FT deal slipped away because of the family-controlled company's financial prudence and conservative bidding strategy.

Springer now wants to expand further in international digital journalism and said foreign revenues grew to almost half its total sales.

The company owns 50 percent of the European edition of U.S.-based political news site Politico, which was launched in April, and Springer said the website politico.eu had over 1.5 million visits and more than 1 million unique visitors in July.

Springer is increasing subscriber numbers, including at its tabloid Bild, Europe's best-selling daily. Its number of digital subscribers for Bild and broadsheet Welt rose by 9 percent to 348,000 in the quarter from 320,000 in the previous quarter.

That compares with half a million for the Financial Times' FT.com at the end of 2014, according to the FT's website.

"The strong organic growth of our digital activities confirms our strategic course," Doepfner said.

Springer earlier reported second-quarter core earnings that beat the most optimistic analyst forecasts, driven by classified ads, while its newspaper subscription profits fell. Springer's shares rose by more than 6 percent.

Core profit for Springer's subscription businesses, which includes newspaper subscriptions, fell by a third due to lower revenues and higher restructuring charges and investments, it said. Classified ads core profit rose 45 percent.

In the second quarter, digital products, especially classified ads, accounted for more than 63 percent of company sales and three-quarters of core profit.

Overall, second-quarter earnings before interest, tax, depreciation and amortisation, excluding special items, slid 1 percent to 147 million euros ($161 million).

That was above all the estimates in a Reuters survey of five analysts, which ranged from 120 to 141 million euros and averaged 133 million.

Shares in the publisher, which also confirmed its full-year forecast, were 6.1 percent higher by 1150 GMT at the top of a flat STOXX Europe 600 Media index <.SXMP>.

(Reporting by Harro ten Wolde; Editing by Georgina Prodhan and Jane Merriman)

By Harro Ten Wolde

Stocks treated in this article : Axel Springer SE, Pearson plc