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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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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

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

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

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

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

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

Al

Yeah baby! I like it like that...

July 23, 2008 at 4:18 pm

Herbert Galloway

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

July 23, 2008 at 4:20 pm

James Price

I love these comments!

July 23, 2008 at 4:22 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

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

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

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

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

KansasGirl

Just 82%? I don't buy that one bit.

July 23, 2008 at 4:42 pm

Linda

"moral barometer of the nation? Well that would be one failure that may have led to it's failure to turn a profit. Glad to see the Times in trouble this nation does not need a moral barometer like it around. Hope its goes the way of the subprime mortgage.

July 23, 2008 at 4:43 pm

John Harper

All three legs of the so-called "stool" are damaged or broken. Maybe folks like Hillary, Bill and Ted sat on it way too long. Wadeathink?

July 23, 2008 at 4:48 pm

Keith

Tell me Fox news has no agenda...and is "Fair and Balanced." All newspapers and news programs have a bias. Informed readers can sift thru the bull and search for the true story. You all are just too "blind" to notice the OBVIOUS right slant of Fox. Whether you lean left or right, at least be honest and acknowledge the obvious. Stop acting like lemmings and "Wake up".

July 23, 2008 at 4:50 pm

Ted

That is really toooo bad!!! The poor NY Times, what will they do? Maybe they could lobby Congress for a "Biased Newspaper Supplement & Aid Bill" to help them through this rough ordeal! HA! I think the citizens have spoken and the paper has got to go!

July 23, 2008 at 4:51 pm

JP

Now that I know that the NYT owns About.com I have found my way of not supporting the NYT. No more About.com for me.... bye bye...

July 23, 2008 at 4:56 pm

Jim N.

The New York Times can only blame itself for the situation in which it finds itself. The paper lost sight of the original role of a newspaper, that is to report "news". It is nothing but a propaganda machine for the democrats and Osamabama. Since senior management, the editors and staff decided to be become a political tool and try to advance its own political agenda, they will die by the same sword they have tried to swing. They have no one to blame but themselves. Good riddance!

July 23, 2008 at 4:58 pm

Aspasia

Wonderful news, indeed. "Moral barometer of the nation"? What a farce!

July 23, 2008 at 4:58 pm

aaron

MacDonald's assertion that the Times is the "moral barometer" of this country is absurd. Their editorial page and feature columnists are as biased as you can get. I cancelled their paper two months ago and hope it contributed in some way to their eventual demise. Too bad, their cultural sections are top notch.

July 23, 2008 at 5:01 pm

lee

I would enjoy turning the lights out.

July 23, 2008 at 5:08 pm

Jim in Florida

“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. Moral barometer of the nation? You have got to be kidding me. How utterly elitist - but appropriate for this "news"paper. I'll never read a single copy again after they refused to give McCain the same courtesy as they extended to Obama. By this stupidity they have crossed the Rubicon as far as I am concerned.

July 23, 2008 at 5:09 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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