# Newspaper Roundup: NYTCO, Media General Post Double-Digit Online Revenue Growth; Others Struggle

The New York Times (NYSE: NYT) Company’s latest monthly revenue figures showed the paper doing slightly better than its newspaper peers. A much smaller publisher, Media General (NYSE: MEG) experienced struggles on its print side, but double-digit growth for its interactive unit. Meanwhile, both Gannett (NYSE: GCI) and McClatchy (NYSE: MNI) seem to be more deeply plagued by reductions in classified ad revenue, though promises of respective turnarounds keep coming. Lastly, another look at the last month’s Borrell Associates report on local advertising has some wondering whether or not it’s too late for newspapers to take full advantage of the internet. More details about each below:

NYTCO: Like many papers, online advertising is the main bright spot. And the NYTCO’s internet activity has been particularly bright lately. The News Media Group’s online revenues rose 21.4 percent last month, thanks to growth in display advertising. While that wasn’t enough to offset the segment’s overall ad revenues, which were down 1.2 percent $180.5 million, online was credited with boosting national ad revs 8.2 percent to$95.8 million. Looking at the NYTCO as a whole, the picture was mixed: revenues from continuing operations were up a modest 1.7 percent to $283 million compared with the same month a year ago, while advertising revenues decreased 0.2 percent to$189.5 million. Circulation revenues were up 3.7 percent.

About Group: The NYTCO’s online guide segment, which includes the web properties About.com, ConsumerSearch.com, UCompareHealthCare.com and Calorie-Count.com, posted revenue gains of 23.7 percent to $9 million, attributed to healthy display and cost-per-click rates. Release Gannett: The company does not break out online revenues – except for its TV properties, where internet revs were 16.2 percent higher. But whatever they were elsewhere within the company, internet revs did little to stanch the flow of across the board advertising declines. Gannett’s operating revenues fell 4.6 percent to$634 million, while classifieds dropped 11.2 percent to $3.4 million, as real estate revs were down 17 percent, employment revs decreased 14.4 percent, and automotive revenues were 10 percent lower. On a positive note, local advertising revs grew 1.6 percent in November. For its USA Today segment, ad revenues dimmed a slight 1.6 percent on paid ad pages of 364 compared to 392 last year. Release Media General: While faced with the usual print declines, Media General’s interactive media division saw revenues climb 34.8 percent, citing its adver-gaming business and solid growth in national/regional advertising. In particular, Media General singled out its partnership with Yahoo’s (NSDQ: YHOO) HotJobs, which helped it mitigate the weakness in classifieds, which declined 13.1 percent. Local online revenues grew 42.5 percent over last November, thanks to its focus on direct sales as opposed to convergence-related print upsells. National/Regional online ads rose 40.6 percent. Release McClatchy’s Reversal: Many newspaper stocks have fallen because of classified and circulation troubles, but McClatchy’s has fallen much more deeply. As a Forbes piece points out, its shares closed Monday at$12.75, down more than 80 percent from the ’05 peak. This was McClatchy’s poorest finish in more than 15 years. The decline leaves McClatchy, the nation’s third-largest newspaper publisher by daily circulation, with a market cap of barely $1 billion, right behind Belo (NYSE: BLC) ($1.7 billion) and Gannett at the top with \$8.2 billion. All this has sparked talk of the McClatchy family, which owns 80 percent of the company, considering the possibility of going private. CEO Gary Pruitt says privatization remains “a long-term option,” but nothing is in the works at the moment.

Too Late For An Online Rescue?: Confident of a turnaround for McClatchy and the industry in general, Pruitt emphasizes his publishers’ solid position in local ad markets, which has been strengthened and expanded by newspapers’ online holdings. In particular, he points to McClatchy’s 14 percent stake in jobs site CareerBuilder, which it shares with Gannett, Tribune (NYSE: TRB) and Microsoft (NSDQ: MSFT) as a source of hope. A WSJ article examines those kinds of collaborations and concludes that online newspaper alliances won’t have a significant impact on companies’ as a whole. Secondly, the WSJ piece argues that while local online ad spend has been rising, newspapers have failed to leverage their local market presence, citing the recent Borrell Associates report criticizing the practice of convergence ad sales, which have wasted papers’ internet properties by using them to support existing print sales instead of attracting new ones. In their place, “pure-play” internet companies have swooped in and taken the lion’s share of the local market, suggesting that it may be too late for newspapers to catch up, despite individual success stories like Media General or the NYTCO.