Overall advertising revenue declined 8.9 percent but the company did see a bright spot in the form of a 7.4 percent increase in circulation revenues. Digital subscriptions to the New York Times and the International Herald Tribune were up 11 percent since the last quarter to a total of 566,000. The Boston Globe added 3000 new digital subscribers for a total of 26,000 at the end of the last quarter.

The numbers come at a time when the New York Times Company is looking decidedly smaller than a year ago, having divested regional papers and its interest in the Fenway Sports group. The company completed the sale of About.com in the early fourth quarter of this year.

Overall, the earnings raised the familiar questions of whether the New York Times — the flag bearer of digital newspaper hopes everywhere — can raise subscription revenues fast enough to offset declining ad revenues. The good news is that digital subscriptions are growing robustly even after the paper tightened its paywall to permit readers to see only 10 free articles a month rather than 20. The biggest area for concern appears to the weakness in digital advertising which actually fell 2 percent from a year ago.

The company will be hosting an earnings call at 11am. We’ll bring you the highlights later today.

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In a release issued after markets closed on Tuesday, the Times cited Thompson’s track record developing new products and revenue streams across multiple platforms. Most recently, he led the BBC’s multi-media coverage of the London Olympic Games.

The company’s announcement repeatedly touts Thomson’s background in digital media, an area that is central to the Times’ efforts to become profitable at a time when print advertising continues to collapse. It is perhaps a fitting symbol that Thompson’s arrival coincides with the first time that the Times’ subscription revenue (much of it digital) eclipsed its advertising revenue.

Thompson’s arrival may also close a tumultuous period for the Times. Since former CEO Janet Robinson departed abruptly last December, a reporter’s leaked memo described the company as a “ghost ship” and New York magazine ran a pot-boiler tale of intrigue among the family factions who control the paper. There have also been widespread complaints from the paper’s staff and readers about Robinson’s $24 million golden parachute.

The initial reaction to Thompson’s appointment has so far focused on how he will adapt to a corporate America setting. Some wags have predicted he will impose a BBC-style universal licensing and others joked that Thompson will be swapping one master (the UK Parliament) for another, Arthur Sulzberger (who remains chair of the board of directors).

More seriously, Thompson’s challenge will be to leverage the New York Times’ prestige and huge digital readership into a long-term business plan. It now has more than 500,000 digital subscribers (including the International Herald Tribune), and continues to post quarter-over-quarter subscriber increases.

The company has also been strategically divesting non-core assets in order to focus on its flagship product. This process has included the sale last week of About.com for $270 million and the sale of a group of regional newspapers for $143 million last December.

Sulzberger’s memo on Thompson’s hiring is circulating on the internet and includes the following passages:

And importantly, under Mark’s direction, the BBC also became known as a place of constant innovation. Mark will work closely with the board and with me as we work to extend our own culture of innovation and transformation and as we continue to expand our reach both around the globe and onto new and emerging digital platforms. [...]

Mark is in the process of relocating to New York from London, and we expect him to start in November. When he arrives, we will schedule employee town halls, so you will have the opportunity to meet him in person.

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And although the Gray Lady both disputes the figures and looks down its nose at the Mail (it “is not in our competitive set,” a Times spokeswoman snooted to Buzzfeed), it’s fair to say the British tabloid’s rise to prominence online has been quite incredible. After all, just a few years ago, the site hardly existed at all.

So how did a provincial outlet whose editor once described the idea of online newspapers as “bullshit dot com” manage to get more traffic than its rivals? And what can other media businesses learn from its rise to power?

There is no secret formula, just a lot of hustle and plenty of shamelessness. Anyone who thinks the Mail can show them how to succeed in online news must understand its increasing prominence has been the result of editorial choices that not everybody will be prepared to emulate.

However, if you do want to understand how to emulate its success, here are five crucial tactics it has used to reach the No. 1 spot:

Be relentless

The core of the Mail’s success is down to its planet-sized ambition and incredibly aggressive approach to the news. The Mail’s journalists are notorious for stopping at nothing to tell a dramatic story, sometimes regardless of the facts. But though breaking ethical boundaries, ignoring copyright or trampling over sources are bound to be controversial, the paper is entirely unashamed by its desire to win at all costs. That tone is set right from the top with rapacious editor-in-chief Paul Dacre, who retains an iron grip over the paper’s output and is regarded as one of the shrewdest — and most vindictive — editors around.

Be broad

Over time, the Mail’s web operation has gone from being a local concern to being deliberately built to appeal to foreign readers, in particular, Americans. This was a decision taken by the site’s boss, MailOnline editor Martin Clarke, a Fleet Street veteran who now splits his time between New York City and London. Headlines and stories are often written in such a way that the stories transcend location, class and gender.

Love linkbait

The site now has a well-developed editorial outlook that can appeal on both sides of the Atlantic, and to most levels of reader. Its trademarks are straightforward: jaw-dropping, salacious headlines (“Swinging couple in drug-fuelled orgy with sex partner sprayed him with bear repellent after he refused to let them take explicit photos”); paparazzi shots of attractive women and fame-hungry celebrities, often in various states of undress (“Snooki poses in tiny black skirt”); and a constant stream of stories about personal health (“Eating chocolate can stave off bowel cancer”). Sure, it’s not exactly high-end — more TMZ than Times — but it brings in traffic and drives engagement. And even though it does little to pander to SEO with its long, sensational headlines, they have served it particularly well in terms of visibility through social media and sharing online.

Stay free

Although the Mail does operate some paid-for services, such as an iPad app and Kindle delivery, it has regularly said it doesn’t intend to hide its website behind a paywall. In fact, quite the opposite: A little more than a year ago, Clarke said he didn’t believe offering its stories for free on the web harms print sales at all. Instead, he told the New York Observer, he has focused on scale: “The way the web works is that it only makes sense to be free if you’re big.” Competitors may snark that the site doesn’t link out, or that it rips off stories without attribution. And it’s true; they are shameless about it… but hardly alone.

Financial muscle

Perhaps most important to the Mail’s success, however, has been the ongoing financial support from its corporate parents. Although print boss Paul Dacre has little appetite for the web, the broader company has backed the online team and invested millions in their ideas over the years — and it has let them just get on with their job, instead of interfering constantly or switching strategies mid-stream. In particular, the teams who operate the Mail’s website remain largely separate from those who produce the printed product: something which challenges the cost-saving approach of many competitors but allows the teams to focus.

Ultimately, anyone who wants to copy the Mail’s success is in for a tough time. The reasons for its rise are many, but they are either things that are hard to replicate (corporate backing) or rely on editorial choices that many large media companies find distasteful (a fiery mix of right-wing politics, celebrity gossip and prurience).

Still, success is success — whatever you think about its brand of journalism, it is certainly not high church — yet while upmarket audiences and rivals sniff at it, the rest of the world, it seems, couldn’t care less. and in a media industry that is struggling, it is not hard to imagine some who are looking at what the Daily Mail has achieved and thinking they can do the same. Whether anyone has the stomach for it remains to be seen.

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Kouwe describes in an interview with the New York Observer how he felt under pressure to cover offbeat news items for the blog as they came up, and would pull together bits and pieces of coverage from elsewhere on a story and then rewrite them into his own post or story. This, he says, is how the plagiarism occurred: by not realizing which pieces of text he had pulled from somewhere else, and which he had written himself. As Salmon notes, what a blogger would do in this case (or at least a good blogger) is link to other sources of material on the same topic rather than rewriting them:

Anybody who can or would write such a thing has no place working on a blog. If it’s clear who had a story first, then the move into the age of blogs has made it much easier to cite who had it first: blogs and bloggers should be much more generous with their hat-tips and hyperlinks than any print reporter can be.

Linking isn’t just a matter of etiquette or geek culture (although it is both of those things); it’s a fundamental aspect of writing for the web. In fact, the ability to link is arguably the most important feature of the web as a communications or information-delivery mechanism. Before the web came along, journalism and other forms of media were like islands unto themselves, each trying to pretend that it existed alone, without any connection to what came before it. Links are like bridges and roads, allowing these islands to connect to each other, and making it easier for readers to draw connections.

Links also make it easier for readers to understand a writer’s perspective, and thus are an important tool in disclosing bias (in an eloquent discussion of how transparency is the new objectivity, author David Weinberger said that objectivity was something “you rely on when your medium can’t do links”).

Unfortunately, however, those bridges and roads can also take readers elsewhere, and if your business depends (or you think it depends) on keeping those readers on your island, you might think twice about building that bridge. So you might recreate information that exists elsewhere, in the hope that readers won’t notice. Is that part of what pushed Kouwe to rewrite material for the blog? Salmon suggests that it might be. And if it did, the NYT writer is far from alone.

That’s not to say web-only sites are free from this kind of behavior. Some news sites have become notorious for either rewriting an entire post from a competitor, or excerpting huge portions of the content on their own sites, with just a small link that credits the original source. The economic incentive is the same, whether it’s a web-only outlet or a traditional media web site: to aggregate page views and sell them to advertisers. But at least most web-only sites that do this tend to include links (even if they are in small print at the bottom). Similar behavior in print publications usually comes with no links at all.

Plenty of mainstream publications have avoided linking out until relatively recently, or at least have linked as little as possible. The New York Times is in that group, despite its status as a leader in so much of what we think of as “new media” online. For a long time, the newspaper’s web site would only link (when it linked at all) to internal NYT topic pages. It has started adding more links to external sites, but many stories still contain no links at all. Lots of newspapers do the same thing.

In some cases this is a technical issue, in that print-based content management systems often make it difficult to include links. But an even bigger part of the problem is cultural. Traditional print media workers are used to thinking of themselves as the be-all and end-all of information, the only source that anyone could possibly need (despite the fact that many stories are based either wholly or in part on reporting by wire services such as the Associated Press and Reuters), and are loathe to give anyone else credit. That has to change.

The ethic of the web, as Jeff Jarvis repeatedly points out, is “do what you do best, and link to the rest.” If Kouwe or his employer had fully embraced that approach, he might not have had to apologize for anything.

Thumbnail photo courtesy of Flickr users Skedonk and Lujaz

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This article also appeared on BusinessWeek.com.

The New York Times announced yesterday that it’s planning to launch a “metered access” system for its web site next year, in which readers will be able to see a certain number of articles for free, but after that will have to pay a monthly subscription fee (unless they’re print subscribers, in which case there is no charge). No one yet knows how many free articles a reader will get, or how much they will have to pay per month, but there has been much written about the decision to start charging. If you want to see what I think of the move, you can read my original post, and if you want to see know what readers of the New York Times think, check out the comments on this blog post. And for additional analysis on the decision, check the links below.

– Jeff Jarvis: The journalism professor and author says the NYT is going to charge its most valuable customers, while not charging its least valuable ones, and this doesn’t make sense.

– Rick Edmonds: Poynter Media’s business analyst says the economics of the NYT’s move actually make a lot of sense, and that the paper was right to implement some form of paid access.

– Felix Salmon: Reuters’ media writer isn’t optimistic about the NYT’s chances of making metered access work, and says it is a “sad day for online journalism.”

– C.W. Anderson: Journalism professor wonders how metered access and paywalls will affect the relationship that journalists have with society as a whole.

– Ken Doctor: The news industry analyst answers nine questions that have been raised about the NYT paywall.

– Steve Yelvington: Veteran newspaperman has a list of things we won’t learn from the NYT paywall.

Photo courtesy of Flickr user itspaulkelly.

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• Mail for Exchange can now actively switch between WiFi and GPRS connections automatically if your phone supports Destinations.
• Much better battery life in adverse network conditions. If the Mail for Exchange client can’t maintain a connection to the Exchange Server, it automatically switches to polling every 15 minutes. The client will switch back to Always on at the next scheduled period.
• Mail for Exchange setting tabs are no longer dynamically displayed, instead all tabs are always displayed.
• Pictures in contacts are now synchronized.
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• Guatemalan Daylight Savings Time calendar events were ‘off’ by 1 hour: Calendar events in Guatemalan Daylight Savings time are now correct. [Proving that there's something for everybody in the new release! ;) ]

Mail for Exchange is part of a pretty convoluted — but free — setup that I’m using with the E63. I use the client for my GigaOM work mail on Gmail. To keep things separate between work and personal, I’m actually using the Google Mobile Gmail client for my personal Gmail. Contacts are coming in through the Google Sync application while I have three calendars in sync by using the previously mentioned NuevaSync beta. Told you it was convoluted! GooSync is likely a far better approach, but I really don’t want to buy an annual service for a loaner phone.

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It’s possible that this kind of thing escapes the notice of traditional journalists because it involves programming, and terms like API (which stands for “application programming interface”), and is therefore not really journalism-related or even media-related, and can be understood only by nerds and geeks. But if there’s one thing that people like Adrian Holovaty (lead developer of Django and founder of Everyblock) have shown us, it is that broadly speaking, content — including the news — is just data, and if it is properly parsed and indexed it can become something quite incredible: a kind of proto-journalism, that can be formed and shaped in dozens or even hundreds of different ways.

Doing this with all of the various elements of the news — names, places, events, details — on a large enough basis can reveal hidden patterns or connections that might not only improve an existing story but lead to new and completely unexpected ones. At the moment, only the research departments of newspapers have the tools to do this, but opening up an API the way the New York Times has can put those tools into anyone’s hands, allowing them to pursue projects and avenues that newspaper reporters and researchers might never think of. And from the point of view of the Times as a media outlet and business, it turns the paper into a kind of platform for other services and features. That makes the paper and its content more valuable, and could lead to all kinds of commercial licensing possibilities and partnerships — not to mention being good marketing.

This kind of thinking is at the core of Jeff Jarvis’s book “What Would Google Do?” His main point is that virtually any business can benefit from thinking about making its data more open, allowing others to remix and manipulate it to see what comes out, and then taking advantage of what can be learned from those experiments. All the New York Times is doing is using its article database in the same way that Google uses its map database, or the Google Earth satellite-imagery database — as a foundation upon which other things can be built. The Times deserves kudos for pursuing such a open model rather than locking its articles up and trying to charge people for every view. I have no doubt that they will benefit far more from such an approach in the long run than would ever be possible with a pay-per-view strategy.

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Is this a strategy, or a laundry list? With all due respect to Munster, rattling off a bunch of names as possible acquisitions doesn’t amount to a realistic strategy for the company at this point. I get the idea — Yahoo needs quality content, and the NYT has that in spades; Yahoo needs to get bloggy, and Gawker owns that territory in numerous key market niches; and Yahoo needs to get more social, hence Twitter and FriendFeed. But isn’t this just going to spread Yahoo’s peanut butter even thinner? It’s already gotten so thin that even peanut-butter manifesto writer Brad Garlinghouse is gone. More importantly, gobbling up Twitter or the New York Times doesn’t actually make a whole heck of a lot of sense.

Take the New York Times. Yahoo already gets to aggregate content from the Times and other publications through Yahoo News, and is free to strike deals with the newspaper or any other web site to provide special content, etc. What possible benefit could buying the Times provide? It’s not as though the newspaper is spinning off boatloads of cash, or producing content that Yahoo can’t get by other means. And buying the Times could actually make it harder for Yahoo to strike deals with other content providers, which would actually put the company further behind. An acquisition makes no sense whatsoever. Sorry, Gene.

And what about Twitter and FriendFeed? Getting more social would be an excellent idea, but hasn’t Yahoo tried that already with Flickr and Delicious? Yes, indeed. And what has the company gotten out of it so far? Very little in the way of synergies, as far as I can tell, and there’s no reason to expect that Twitter and FriendFeed would add any more value. What’s Yahoo going to do — hope that it can somehow convince people to Twitter links to Yahoo content? Good luck with that. About the only thing Yahoo would be likely to do with either service is gum it all up with spammy content and lace it with ads, which would kill either one dead. Nice try, though.

I understand the desire to find some kind of magic bullet (or bullets) that could rescue Yahoo from its predicament — or even make things a little more exciting than they have been for the last couple of years, as the company has stumbled and bumbled from one pothole to another. But the reality is that there is no magic cure. Yahoo has to find a way to do what it does better, that’s all, and neither the New York Times nor Twitter would help.

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This is something that most of the blogosphere, or at least the part of it that cares about accuracy and integrity, does pretty well. Sites like GigaOM and others update their posts when information is added or corrected, and in many cases link to critical or differing opinions (and if they don’t, they should). In that sense, truth — to use a loaded word — is not absolute, nor is it something that a single entity has a monopoly on, particularly around a developing or complicated issue. The most we can hope for is that an outlet of any kind, whether it’s a blog or a traditional newspaper’s web site, does its best to represent an issue fairly and completely, and that requires additions, updates, links and discussion.

The WSJ arguably failed that test on Monday, with its story on Google and how its position on “net neutrality” had allegedly softened.

There has been, and will no doubt continue to be, debate about whether the Journal’s perception of Google’s behavior is correct. Some believe that Google is actually giving itself a benefit that others can’t match (except, of course, other large web companies such as Microsoft, Yahoo, Amazon, etc.). Others see it as a natural move by a large Internet company, and no threat to net neutrality at all. Whether you agree depends on what you think net neutrality is supposed to mean, and what Google’s role in it is. If you want to understand more about the issue and the way the Journal described it, read some of the links in David Weinberger’s post.

What isn’t in dispute, however, is that Google completely disagreed with the implications in the article, as company representatives made clear in a blog post written not long after the story went up on the Journal site. It’s understandable that Google might take issue with the story, of course, since it paints the company’s behavior in a negative light. But that’s not really the point.

What is important is how the Journal responded to these criticisms, both from Google and Lawrence Lessig (who was also quoted in the Journal story and noted, in his own blog post, that the description of his views was simply not accurate), and from other sources. Was the story itself updated? No. Were any links to the blog posts in question included, even as supplementary material? No. There was a blog post on the Journal site that mentioned how the story had “gotten a rise” out of the blogosphere, which included a couple of links, and then on Tuesday there was as second one, also with links to additional posts at Wired and elsewhere, as well as a description of what “edge caching” is.

No response to Lessig’s factual assertions about his views and the way they were described was provided. There is no acknowledgment of it apart from the Journal’s second blog post (which someone reading the original story might or might not even find). To any self-respecting blogger, this seems like a failure. Why not put all of that information, whether they be links to critical blog posts, updates on factual errors, or something else that is relevant, inside the original story? Why not allow those responses to help expand the way people look at the story? They’re going to do so anyway, once they come across them on their own. Is the Journal simply hoping that they won’t, and the story will remain pure and unsullied by criticism?

That’s an old-media approach. It’s a way of saying, either directly or by implication, “The truth is whatever we say it is.” Any critical responses, even from two of the major players in the story, are relegated to a blog post that gloats about the reaction the story got, but does little to treat it as valid or worthy of inclusion. As Scott Rosenberg of Salon points out, online media provides the tools for a real conversation, one that changes the way people look at an issue, and for a real “journalism as a process” approach to the news. It’s a pity the Journal couldn’t spot — or take advantage of — such an opportunity when it presented itself.

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