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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.

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John White

It shouldn't take an Einstein to realize the fact that Fox News has such a good rating by practicing what they preach, which is: WE REPORT, YOU DECIDE. They also describe themselves as "FAIR AND BALANCED", which, in my opinion, is nothing but true. I do not subscribe to any newspaper because they all seem to think that they need to educate everyone else in their way of thinking. This is too much like a dictatorship.

July 23, 2008 at 3:39 pm

Bob Difino

What will I put under my parrot?

July 23, 2008 at 3:36 pm

Bill Dudding

The arrogance of NYT management has come back to bite them where it hurts.

July 23, 2008 at 3:34 pm

Rick Tabor

Even without the advertisers' move to the Internet, the print media (especially the liberal-biased)started to decline when reporters lost their objectivity and began to fancy themselves as editors. They seem to hold collective public intelligence in very low regard.

July 23, 2008 at 3:34 pm

JohnH

I hope my own local,liberal rag goes out of business!

July 23, 2008 at 3:31 pm

Chris Murray

If I had the money, I would be accumulating shares for a takeover, renaming the paper The New York Liberal Propogandist Gazette I say, truth in advertising.

July 23, 2008 at 3:28 pm

D. Kruck

The New York Times "manufactured" news for a very, very small group of pseudo-elitists. I doubt unworthy and unwashed masses will shed a single tear at their demise.

July 23, 2008 at 3:27 pm

retiredcopper

Trouble with the NY Times is that liberals can't read and conservatives are too smart to read that rag.

July 23, 2008 at 3:26 pm

croddy

the new york times long ago ceased to be a legitimate source of objective news coverage. close the doors

July 23, 2008 at 3:23 pm

Glenn

Well that is good for the Very Liberal Paper, and I hope all the other Liberal Papers do the same.....everything that is good for the country the Paper doesnt print so why be in the Business, but that is how Liberals are, everything that is good for the country they are against.

July 23, 2008 at 3:22 pm

Bill in Sani Flush

They threw their paper outside my fence and then sent me a bill! I threatened to sue them for littering. They stopped!

July 23, 2008 at 3:21 pm

Rob

The only question I have is what will bird owners line their cages with now???

July 23, 2008 at 3:18 pm

Steve -Cleveland

...well as long as the current owner keeps the rag (through unfair stock voting rights) ... he will continue to use the NYT as his own personal far left venue... profits , who needs the money... Mr S is not worried about money grand-pop took care that... perhaps Senator Obama will start paying for all the free promotion he gets from the paper...

July 23, 2008 at 3:13 pm

Steve

About time tired of this rag

July 23, 2008 at 3:12 pm

Ralph

This is great news! The Times should start publishing all the news... not just what the liberals want printed.

July 23, 2008 at 3:12 pm

Bill

FULL time!!!!!

July 23, 2008 at 3:09 pm

Alonzo Demetrius

It’s just too bad that a reputable news medium such as NYT will go down the tubes, and all because their current leadership has decided to try to influence the American election process. Many of our formerly leading news magazines have gone down this same road and are suffering or soon will. Why can’t they see that Americans do not need to be told what to think; we just want you to tell us the news, not your version of the news. p.s. The same goes with the TV broadcasts that are so obviously one-sided. Please, we are all not stupid out here; just tell us the news and we will think through it for ourselves. Your form of mind-control works only on the stupid.

July 23, 2008 at 3:08 pm

joe

goodby to a yellow rag,and all its reporters and owners.yesterday will not be soon enough

July 23, 2008 at 3:07 pm

Alonzo Demetrius

It's just too bad that a reputable new medium such as NYT will go down the tubes, and all because their current leadership has decided to try to influence the American election process. Many of our formerly leading news magazines have gone down this same road and are suffering or soon will. Why can't they see that Americans do not need to be told what to think; we just want the news. p.s. The same goes with the TV broadcasts that are so obviously one-sided. Please, we are all not stupid out here; just tell us the news and let us think for ourselves. Your form of mind-control works only on the stupid.

July 23, 2008 at 3:06 pm

David

If a bankrupt newspaper writes a biased article and no one is there to read it, was it ever written?

July 23, 2008 at 3:04 pm

John

NY NY NY NY, NY NY NY NY, Hey hey hey, Good-bye

July 23, 2008 at 3:04 pm

Chucky

Why read the NY Times? They are in the hole because they are left-wing, anti-America biased. They can't seem to recognize the fact that American's want the facts, not propaganda.

July 23, 2008 at 3:02 pm

Cary

Great! I hope they and San Francisco Commie(Chronicle) close their door soon!

July 23, 2008 at 2:57 pm

Ace

Will Congress bails out our beloved Liberal National Newspaper?? Pelosi, Reid, Rangel are they working behind the scene to save the paper?

July 23, 2008 at 2:57 pm

patrick keefe

This is and has been the fate of the Liberal Left. It's just no one is reporting it....

July 23, 2008 at 2:55 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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