Peter Kafka

Recent Posts by Peter Kafka

Internet Ads Vanish From the New York Times–Down 12 Percent in December

The New York Times had a bad December, and a lousy end to 2008. That’s old news, but here are the official details, via the company’s latest earnings release and December revenue report.

December was actually less bad than November, which was a complete disaster. The relevant numbers:

  • Ad revenue down 15.7 percent, which is less awful than the 20.9 percent decline from the month before.
  • Overall revenue down 9.1 percent, another improvement compared to the previous month’s 13.9 percent decline.
  • The one real uh-oh stat: Internet ad revenue disappeared. Overall Web revenue dropped 11.4 percent, and ad revenue dropped 12.7 percent. Digital head Martin Nisenholtz had hinted at this in December, but it’s still shocking to see it in print. It’s the second consecutive month that Web ads have declined at the company.
  • The Web decline also beat up About.com, which had been the Times’s real bright spot until recently: Revenue was down 13.2 percent there “because of declines in display and cost-per-click advertising.”

Relevant numbers from the fourth quarter: Digital advertising declined 3.5 percent. And the company also disclosed that its pension fund is now $625 million short, a sum it will have to make up over the next seven years.

The New York Times Company (NYT) had already warned that its December numbers would be rough. And it basically pre-announced that 2009 would be lousy, too–“challenging,” in the words of CEO Janet Robinson. Today she offered more guidance in that vein:

As we look ahead, we believe advertisers will continue to be cautious with their budgets, particularly in the early part of this year. To date in January the rate of decline in print advertising revenue has accelerated from what we saw in December, while that of digital is similar to last month.”

So while it’s interesting to peer at past results, the real question for Times investors–including new angel/loanshark Carlos Slim–will be “what are you doing now?” They’ll want to see the paper make steps to fix its near-term debt problems–as it’s trying to do via asset sales–and structure itself for the long haul–which it says it can do without mass layoffs, and which few people believe.

One small step announced this morning: The Times says it has hired Goldman Sachs (G) to formally peddle its interest in the Boston Red Sox and its other Boston-related sports ventures. But given that the paper was reportedly hawking those assets for months, not sure that means that much.

We may get more color about the paper’s plans during its 11 a.m. earnings call; I’ll listen in and report back.


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— Gitesh Pandya of BoxOfficeGuru.com comments on the dreadful opening weekend box office numbers for “The Fifth Estate.”