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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.

Larry

Thank God, the NY Times Grave has been lying empty far too long. and Justice is finally catching up to that bunch. if the Time comes that America needs an enema the New York Times central office would be the perfect place to insert the Hose....

July 23, 2008 at 2:54 pm

Nancy

I sincerely doubt that this organization will get the point: The american people demand FAIR news. The MEDIA is not going to elect this president! For all the NYT subscribers: I hope you cancel your subscriptions.

July 23, 2008 at 2:50 pm

keith

Good, couldn't happen to a more deserving entity.

July 23, 2008 at 2:44 pm

Paul , VA

No kidding? I wonder why. I would read the Enquirer or the Examiner for "news" before reading that rag. They can all get jobs for BHO or Al-Jazeera who shares the Times' editorial philosophy.

July 23, 2008 at 2:43 pm

Edward

I hope they have to fold.

July 23, 2008 at 2:40 pm

JohnJ

When will these media outlets (newspapers & radio) figure out that liberal-biased news only appeals to a small minority of people. I tried reading the NYT web version for a few months, until I just got so angry I stopped. They were shameless in their liberal slanted reporting and swooning over Barack. They need to fire all their editors, writers & managers and start over with a balanced & professional staff if they wish to save their company.

July 23, 2008 at 2:34 pm

Oliver Closov

Sell it to Rupert Murdoch!!

July 23, 2008 at 2:34 pm

Peter

If the NYT goes out of business, I won't have anything that's acceptable for picking up my dog's poop.

July 23, 2008 at 2:32 pm

Marc

I wasn't a subscriber, but a couple years ago was a regular reader of their website. Their liberal slant turned the paper into more of an out-and-out liberal opinion piece with a newsfeed. As far as I'm concerned, the sign of the Times should be "Closed for business".

July 23, 2008 at 2:32 pm

Sharron Mathis

This has to be the best day for Freedom, Truth and everyday working people! I am happy! Every decent Person or politition has been maligned, lied about while the Marxist, Socialist View has been promoted. Clear out your desks and Come live in the real World! Sharron Mathis Cherokee Village, Arkansas

July 23, 2008 at 2:31 pm

Ted Sherman

Liz, I am told that the NY Times has been loosing money and that the shares of the Times has fallen since 2002. I would argue shortly after 9/11 and the Iraqi war. You can't tell american secrets and expect to remain a real newspaper. Love your perpective on the economy. The opinion you gave about taxes being immoral I almost sent you a love letter (lol). Keep up the good work. P.S. If my friend gets his smooth jazz band going I will invite you and the other anchors to the best night of entertainment in the northeast.

July 23, 2008 at 2:31 pm

Bill Arrigoni

Name me one newspaper that hasn't seen their bottom line drop.It's the internet,stupid.

July 23, 2008 at 2:30 pm

Dave Anderson

Shortly behind the NYT in journalistic bankruptcy is Newsweek. You can bet that NYT demise will not appear in the NYT, Newsweek, MSNBC, CNN, ABC or CBS.

July 23, 2008 at 2:30 pm

bill

I hope all them liberal commie bast... who work for the Times go homeless. They think they are above correct journalism morals and values. They need apply for food stamps just like their political agendas promote.

July 23, 2008 at 2:29 pm

Phil

Perhaps advertisers are not so much moving TOWARD the internet as moving AWAY from the NYT.

July 23, 2008 at 2:28 pm

keith

If bias is the reason NYT is failing - then Fox should have folded years ago.

July 23, 2008 at 2:25 pm

freddy

"all the news fit to line the birdcage"

July 23, 2008 at 2:25 pm

Dave Anderson

The NYT long ago ceased at being a journalistic newspaper to becoming a political hack rag. Like the French, it still thinks it is in it's prime. Any paper that can print an ad calling our finest General "Betrayus", prints everything Barrack Hussein Obama and Moveon.org wants and won't print an article by McCain unless it please them does not deserve to live.

July 23, 2008 at 2:24 pm

H.P.Wiegand

For most of my early adult life, The New York Times was a fine example of excellent journalism and factual news reporting. What one was a shining star has become a smoldering rag, reeking of bias. No wonder its profits and reputation have all but hit bottom. Top management had better make an "agonizing reappraisal".... otherwise, good riddance!!!

July 23, 2008 at 2:24 pm

Tip Coleman

If they go belly up, it couldn't happen to a more deserving rag. The "DNC/Obama Times" has outlived it's credibility.

July 23, 2008 at 2:21 pm

Russell

Not only is their reporting ultra liberal only, but they make up facts to go along with their one-side stories. They can't fold fast enough!

July 23, 2008 at 2:21 pm

Bill Johnson

It's because they have all gotten ill from drinking the Obama Koolaid.

July 23, 2008 at 2:19 pm

Bill Johnson

It's all because they have gotten ill drinking the Obama koolaid.

July 23, 2008 at 2:18 pm

Jon

Hi Liz, Is it any wonder why they are failing? Just so happens that I see the NYT, NBC, CBN, ABC all going the same way unless they start reporting the news with out all the bias and they're opinions. FOX is our channel.

July 23, 2008 at 2:18 pm

Boondocker

NYT may need to seek funding from Soros and Turner. They are going the way of Air America and the dodo bird.

July 23, 2008 at 2:17 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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