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  • July 23, 2008 10:38 AM EDT by Elizabeth MacDonald

    Profit Plunge at the New York Times

    The New York Times (NYT) fell as low as $12.38 this morning after its second quarter earnings missed estimates. Profits plunged 82% to $21 mn versus the $118 mn posted in the same period a year ago, a period that was helped along by the one-time sale of an asset.

    The share plunge is the lowest since July 1995. An historic come-down for the newspaper of record, given that in 2003, the stock traded at $45, notes Frazer Rice, a private banker in New York.

    Print ads dollars at the Times continue to shrivel, sending operating income in a nosedive, as ad dollars continued their inexorable march toward the Internet. Hotels, automakers, airlines, all hurt by high energy prices, have pulled back sharply.

    What exactly is wrong with the Times' business model? "Rightly or wrongly, the New York Times has had to serve three functions," says Rice, a private banker in New York.  "One, inform the world; two, act as the moral barometer of the nation; three, turn a profit.  All three of which are vital legs in the New York Times’ stool.  The last one, turning a profit, is the one they are having, as the Irish would say, a spot of bother." So what's the problem? Although the Times has "many interesting properties like the Boston Globe and about.com," Rice says, it "has managed to be a follower in the information age as opposed to a driver."

    Specifically, the Times is "being taken over by Google as people’s news gathering tastes were dictated by the marketing information that search engines had as opposed and the costs of newsprint and bureau chiefs soared to through the roof," Rice explains. "The fact is that the Timesis the brand leader in a product that is becoming more and more commoditized and whose brand is being co-opted by its individual journalists," adding, how many people do you know who buy the Times solely to read "Maureen Dowd, Thomas Friedman or Paul Krugman?" 

    The Times is hoping against hope that its mix of assets, including The Boston Globe, the International Herald Tribune, About.com, regional newspapers and a classical music radio station in New York can pull it out of its corkscrew dive south.

    How to fix it? "Perhaps a relationship with Google or another search engine makes sense," Rice says. "The Times has failed to make any headway in the digital age, why not seek out the advice of the people who are making a killing in it?"  Stay tuned.

Sharon

Am I the only one that has a problem with #2? Since when is a newspaper supposed to be anyone's moral compass? That isn't journalism.

July 23, 2008 at 4:33 pm

Ed

The NY Times should have had their offices raided by the FBI, and the Editor hauled off to prison after they started printing leaked nad stolen classified info on the front pages.

July 23, 2008 at 4:32 pm

Glen

Quoted... “One, inform the world; two, act as the moral barometer of the nation; three, turn a profit. All three of which are vital legs in the New York Times’ stool." Number two is the problem... by appointing themselves to be the moral barometer, many people have stopped reading their publication. I, for one, want the news reported without comment, thought or opinion. The employees of The Times are just news reporters. They do not have experience or degrees that validate any comment they make on the economy, politics or human nature. If they want to comment on these issues, they need to sell books like everyon else and not include it in the news that they should be publishing.

July 23, 2008 at 4:31 pm

Roy

Everything in this article except the profit plunge is complete bunk. The NYT demise is due to one thing and one thing only. Their extreme liberal ideology, period. Their first two functions, inform the world and be a moral barometer is hogwash but even if it was true, they have failed completely and utterly in both. That my dear Elizabeth, determines the third, profit. Good riddance to the NYT.

July 23, 2008 at 4:27 pm

Orlando Castro

The Times is the "Canary in the mine shaft". Most educated American citizens are politically in the middle and just slightly to the right. The "news" media is daily becoming left and do not care what or how the public reacts. We are not reading articles that teach us how to make an educated decision anymore. We read articles that tell us what decision we should be making. However because we are educated, and hopefully rational and independent, we are not falling for the left wing control of what used to be "the free press".

July 23, 2008 at 4:26 pm

James Price

I love these comments!

July 23, 2008 at 4:22 pm

Herbert Galloway

The New York Times going under-- HOW SWEET IT IS!!

July 23, 2008 at 4:20 pm

Al

Yeah baby! I like it like that...

July 23, 2008 at 4:18 pm

Steve Long

What I find remarkably interesting is that the NYT themselves has admitted their own bias in the past. Their "highlight" op-ed writers such as Maureen Dowd continue with their obstreporous and highly inaccurate tripe. Ah well, with all the liberal keesters they have kissed over the years, I am sure that ALGORE will take care of them all.

July 23, 2008 at 4:18 pm

Javier

The New York Times fate will be the same as liberal talk shows, not demand for them.

July 23, 2008 at 4:13 pm

Mike Lockhart

I would humbly suggest that the NYT's problems stem from its attempts to be the moral barometer of the nation. Its perspective, from the far left side of the political spectrum, has led to its own lack of any moral compass, its failure to impartially inform the nation and its inability to make a profit. I hope to raise a glass of champers to its ultimate downfall.

July 23, 2008 at 4:13 pm

Mike

It would be great to see that piece of trash called the NY Times out of business once and for all. Anyway, who wants to read a paper who hires plagiarists? What kind of news is that?

July 23, 2008 at 4:12 pm

Jack

"This is Great! Maybe they can all go to work for Hillary or Obama." I thought they already were. LOL!

July 23, 2008 at 4:10 pm

Joe De

I've been looking for used NY times papers, I refuse to purchase one....What I need to know is, who are the advertizers, so I know where not to shop an what not to purchase.....Who ever ownes the Times, should fire all top management and the entire editorial staff, otherwise, tun out the lights and layoff everybody and write off your losses on your next tax forms.....

July 23, 2008 at 4:07 pm

Pamela

long lives the trees

July 23, 2008 at 4:06 pm

Woodside Gil

Ah....music to my ears. I hope that this is just the beginning of the end for the most biased, one-sided, liberal piece of garbage out there. The only place it has any value is back up in the bathroom in case one runs out of TP. I hope they fold and every one of their employees is out of a job and goes on welfare, a support system that they have championed for years.

July 23, 2008 at 4:04 pm

John Steitz

When you lose your integrity you lose just about everything. The NYT has lost nearly every shred of integrity they ever had.

July 23, 2008 at 4:00 pm

Annette

The demise of the Times is a long time coming and way overdue. For too long this voice of all that is subversive to this country has been allowed to spew it's leftist dribble to it's supposedly elitist readers. My family and friends will party when the final wooden stake is placed in it's heart.

July 23, 2008 at 3:56 pm

Tony De Angelis

July 23, 2008 at 3:56 PM In recent years the NYT motto has become "All the news unfit to print."

July 23, 2008 at 3:55 pm

Ron

Hurray! For the newspaper that would leak/disclose sensitive CIA info in fighting terrorism, but refrain from releasing the ending of a Harry Potter new release, I am surprised they are turning a profit at all!

July 23, 2008 at 3:53 pm

Dan

Would love to see this socialst rag go under. What a blessing this would be for the U.S.A.

July 23, 2008 at 3:49 pm

Ferrell Gummitt

Profits plunging at the New York Times? You don't say? I predict there will be a couple "Bill O'Reilly Talking Points" on this subject. Maybe if they hadn't their souls to the far left crowd, the profits or at least the losses would be a little better...

July 23, 2008 at 3:48 pm

Manny

This is really not surprising. Back in the day everyone read the Times; it was practically required reading. In more recent years they have become more and more of a liberal propaganda forum and print retractions like our country prints money. They used to report the news and now they make the news and have turned off hundreds of thousands of readers. Three generations of my family alone stopped reading their garbage and it doesnt surprise me if many Americans both conservative and liberal want the news reported in a "fair and balanced" manner.

July 23, 2008 at 3:48 pm

Jim Woodward - Oklahoma

A real bummer for this left wing rag. Maybe they will get the message that U.S. citizens are sick and tired of their left wing vapid drivel.

July 23, 2008 at 3:46 pm

Mark G.

Well, to coin a phrase, the 'pulp pulpit' of the NYT evidently is having the same success as Air America and for good reason. The sheer hubris and chutspah of an editor to deny an op-ed piece to someone running for president is truly beyond the pale. Every morning I read the online editions of all the major metros. After reading the LA Times, and the NYT, I'm ready for a dose of reality, that's when I read the Middle-America papers. The notable exception being the Chicago Tribune. Some of the columnists are great, but the majority of the op-ed pieces are simply astounding in their idiocy and balance to wit; 'Repeal the Second Amendment!' Pretty amazing that such a formerly great paper would pander to a Mayor and his incredibly corrupt adminstration. I now call Chicago 'Newark on the Lake'. As a blogger myself with nearly all of the majors, it does appear that from the vast majority comments that they are so off-base in their observations and commentary, that it could hardly be called news. It's more like 'journalistic day care' and they are passing out crayons, because we can't think for ourselves. The papers who's numbers are sinking into the collective toilet might do well in reading the reader's comments about the various pieces and coverage thereof. They would then realize the Emperor really needs some clothes, because sometimes the naked truth of reader's opinions is the truth.

July 23, 2008 at 3:43 pm

about this blog

  • Elizabeth MacDonald is the stocks editor for Fox Business Network. She is recognized as one of the top prize-winning business journalists in the country, and has received 14 awards, including the top prize in business journalism, the Gerald Loeb Award for Distinguished Business Journalism, and the Newswomen's Club of New York Front Page Award for Excellence in Investigative Journalism.

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