However, while consumers will have the capabilities this year, the research firm finds that mass-market adoption is still years away, and the category will be crowded with players, ranging from financial services firms, card networks, mobile operators, device makers, point-of-sale terminal vendors and start-ups.

Sure enough, in the past few weeks, we’ve seen reports of Google; Sprint; a coalition of carriers excluding Sprint, PayPal, Visa, MasterCard, American Express; and a host of start-ups that are all jumping into the space.

The report, authored by Thomas Husson, defines mobile payments broadly as any transaction that is initiated using a mobile phone–in the browser or by tapping the phone against a terminal to pay in the store.

Husson writes that while adoption may still be years off, what we will see in 2011 is large shipments of near-field communication devices from large handset makers that will make these tap-and-go transactions a reality.

The first NFC-compatible Android device is Samsung’s Nexus S (pictured here), which is now shipping. But Forrester estimates that manufacturers will ship between 40 million and 50 million NFC-enabled devices in 2011.

Still, the vast majority of purchases that are being made with mobile phones today are not physical goods, but rather digital content, such as applications and music.

But smartphones are routinely considered a threat by retailers, who fear that consumers are using their stores as showcases to decide what they want to buy, then using their devices to scan bar codes and conduct price comparisons in the store–and ultimately buying online for less.

Adoption of these features, however, is still fairly low. In the U.S., Forrester said, eight percent of survey respondents said they used their phone to compare store prices with online prices. About half of those people said they purchased an item on their phone that was not available while they were in the store.

Overall, the survey found that 12 percent of U.S. respondents said they had used their mobile phone to buy a product.

Forrester made a few recommendations for catapulting consumer adoption of mobile payments. It recommended making NFC-capable terminals more widely available, including in mass transit scenarios, and creating incentives for consumers to adopt the technologies by integrating loyalty awards and coupon redemption into the process.

Let’s see if the paper’s executives can turn that around during their earnings call. We’ll also be looking for any updates the Times can provide on its pay wall plans, and, of course, its role in the launch of the Apple iPad.

UPDATE: As I noted below, though the New York Times (NYT) was a featured partner at the launch of Apple’s (AAPL) iPad, even sending a small team to Cupertino to create an app a few weeks before the event, there was zero discussion about iPads today.

CEO Janet Robinson made a generalized comment about the growth of the Times’s mobile distribution, but that was it. And not a single analyst showed any interest in this stuff–a good reminder that neither the Times nor Wall Street expects the iPad to be material to the company’s business for quite some time.

Liveblog

On the call: CEO Janet Robinson, CFO Jim Follo, Times Media Group boss Scott Heekin-Canedy, and Digital boss Martin Nisenholtz

In a preamble, CEO Robinson highlights cost-cutting, balance sheet repair, and asset sales (radio station, but not the Boston Globe; the company is still looking at selling its stake in the Boston Red Sox–the process is “complicated” and is “taking longer than anticipated”).

Robinson recaps the pay wall plan, metered approach, etc. Nothing new here so far.

The paper is waiting until 2011 to deploy the pay wall, she explains, because it wants to make “subscribing as smooth and easy as possible….It will take some time to build, deploy and test the best systems.”

Robinson offers a few revenue details, primarily a recap of the earnings release.

Ads by category: National ads down 12 percent, retail down 23 percent, classifieds down 27 percent.

News media online grew four percent, primarily from display advertising (the rest of online growth comes from About.com).

Print ad category decreases came from Hollywood, among others. Ad category increases: Print auto, health care, packaged goods.

Circulation revenue is up because of newsstand, price increases. The Times is benefiting from declines at other papers, because as local papers cut back, it is offering more info than ever. Robinson notes expansion by the paper into local news in the Chicago and San Francisco markets, adding that there are plans on going local in “several” other key markets

Time to brag about new mobile products and applications. The paper counted 75 million page views from mobile and apps in December, and the iPhone app has been downloaded three million times since launch.

Back to digital: Display ads are up, classifieds down; they improved “significantly” as Q4 progressed.

About.com is still the Times’s digital cash machine: Revenue is up 22 percent, and operating profit grew from $10 million to $18 million.

Overall, Internet businesses are up 10 percent and accounted for 15 percent of revenue for the quarter. Online advertising revenue accounted for 23 percent of ad revenue of the quarter.

“Limited” visibility for 2010, which is what’s upsetting The Street, supposedly. But the paper is still “realigning” its cost base.

CFO Jim Follo’s comments may not interest all readers except for this part: The Times is continuing to reduce headcount, he notes, which dropped by 18 percent in 2009. The company is also looking at the benefit structure for both employees and retirees. It froze that awesome supplemental retirement plan that pays certain retirees a very lucrative pension.

We’ve been benefiting from a drop in newsprint prices last couple years, Follo notes, though suppliers are trying to raise prices again, but there’s a supply glut, so we think they’ll have a tough time doing that.

No big capital spending projects are planned. [Presumably, the pay wall is not that expensive to build.]

[Aside: Interesting that NYT.com GM Denise Warren, who's normally on these calls, isn't on today's.]

Questions and Answers

Question: More color on advertising, please.

Scott Heekin-Canedy: We have some optimism, but advertisers are “guarded,” and ads are still bought–or retracted–at the last minute, as they were last year.

Tech, media, health care, and auto ad categories all look promising. The mix is “definitely different” from last year “when it seemed like every single category was down.” Now, many categories are showing “flat to significant growth.”

Question: Are you still optimistic that you can reach a deal on the Red Sox?

Robinson: “Yes we are.” Lots of due diligence, lots of different properties (stake in team, stadium, network, etc.).

Q: What are incremental costs of setting up a pay wall?

Robinson: “We feel this is an elegant solution,” but we want to wait the year and make sure we’re well prepared, etc. Again, integrating home delivery and digital is crucial.

Nisenholtz: Regarding cost, there will be a “modest operating cost” to deploy the tech. We’re hiring a “handful” of people to do that and deploying “modest” capital, but it’s not material.

[Apology: I missed a question on ad categories, though it seems to reprise the earlier question.]

Q: Can you give us a sense of additional cost-savings you can extract this year?

Follo: Nope.

Q: Will your headcount go down again in 2010?

Follo: Yes.

[Missed another question here.]

Next a question about the tax rate, which I can’t imagine anyone reading this cares about.

Q: Can you tell us more about January ad trends, i.e., how much is national vs. local?

Robinson: We won’t break that out (anymore).

Q: Was it materially better than Q4?

Robinson: She repeats her earlier comments from the release. “Very good performance” on the digital side of business. December was particularly good, but we’re not going to be more specific about January.

Heekin-Canedy: That said, we don’t think January is much of an indicator about the rest of the year, anyway. Different beast, not much connection between December [when people were dumping leftover dollars].

[There's a giant disconnect between analysts and the chattering classes here. If the latter ran the call, this would be about nothing but iPad, iPad, iPad. But we're 48 minutes in, and zilch so far. Which is a good reminder: No matter what launches with the tablet this year, this stuff isn't going to have a big impact on Big Media for quite some time.]

Q: Where is growth coming from at About.com?

Robinson: Both consumer packaged goods and display ads. We’ve upgraded the sales channel to go after display and that’s helped a lot.

Nisenholtz: Strong categories include CPC, travel, education and financial services. There’s also retail strength.

Q: Are CPGs new to About.com?

Nisenholtz: Yeah. Well, not exactly. It’s a big site, lots of reach. But we’ve updgraded the sales team and the increase there is part of the payoff. We reach a lot of moms. The Web site skews female.

Q: You may end up paying $60 million to $80 million back into the pension plan. When could that come? Q4?

Follo: Could be sooner than that. We’re in a good position regarding liquidity.

[The final question is about joint ventures that you don't care about.]

And that’s it for the call.

Hewlett-Packard’s second-quarter financials may have been in line with forecasts, but they were troubling nonetheless. A number of analysts predicted that the company might report better-than-expected earnings. Sadly, it did not. HP’s net income for the period fell 17 percent to $1.7 billion, or 70 cents per share. Excluding one-time items, the company earned 86 cents a share, compared with a profit of 87 cents a share in the same period last year. The results include charges of 2 cents a share related to a patent dispute. Sales fell three percent to $27.4 billion. Every division of the company, save one, reported a decline in revenue. The lone highlight, Services, posted an increase, but that was due primarily to HP’s acquisition of EDS. The grim details:

Enterprise Storage and Servers: down 28 percent
Software: down 15 percent
Personal Systems Group: down 19 percent (though it claims the leading market position in PCs in every region)
Imaging and Printing Group: down 23 percent
Financial Services: down 6 percent
Services: up 99 percent

Clearly, the decline in consumer and business spending is weighing heavy on HP (HPQ) and will continue to do so. The company expects third-quarter revenue to be approximately flat to down two percent sequentially. And it says full-year revenue will slip approximately four to five percent from the prior-year period.

UPDATE: During a conference call to discuss earnings, HP’s leadership said the company will sack about two percent of the workforce in the months ahead as it looks to trim costs. 6,400 employees will lose their jobs as a result.

Portfolio’s ad pages were down more than 60 percent in the first quarter of 2009. If you account for the magazine’s decreased frequency–it published two issues in the first free months of the year, down down from three last year–that works out to be a 40 percent drop. Here’s how its peers performed during the same period, via the Magazine Publishers of America:

McGraw-Hill’s (MHP) BusinessWeek: Down 39.8 percent

Time Warner’s (TWX) Fortune: Down 26.3 percent

Privately held Forbes: Down 15 percent

Bear in mind that the revenue numbers for each title are likely down much more dramatically. That’s because the two categories of advertisers that the business magazines have depended on to fill their pages–financial services and autos–have all received extra-vicious beatings from the economy since last summer. So the publishers are particularly vulnerable to rate card pressure. And I’m told that luxury and travel advertisers, which had stayed relatively strong through the end of 2008, fell off dramatically this year. So that can’t be good.

My contribution to the aforementioned bone-picking: Like everyone else who wrote about Portfolio yesterday, I mentioned that the magazine and Web site had reportedly been launched with a budget of $100 million or more. But let’s be clear–that’s $100 million (or more), to be spent over a five-year period.

Portfolio was around for two years, and was gestating for a year before that, and a bunch of the budget was likely spent up front. So Condé Nast likely did burn through a very large pile of cash–the New York Times’s David Carr reports that the magazine spent $30,000 last fall to “procure the services of a real elephant to menace a model at a photo shoot.” And I’d love to know what the total actually was (for the record, I asked, and no one will tell me). But it’s a stretch to think Condé Nast actually burned through nine figures on this one.

And it’s almost certain to do just that, judging from Relsys’s pedigree. The company has been around for some 20 years and it counts 21 of the top 50 pharma companies among its customers. As Redmonk analyst James Governor notes, this is a savvy acquisition and one that positions Oracle well to take advantage of future Obama administration health care spending. “Oracle didn’t get to where it is today without knowing which way the wind is blowing, and it’s not exactly hard right now to know where the rest of the US Government’s money will go, after its blown most of its wad on financial services bailouts,” Governor said. “Healthcare and Utilities are both set for significant investment. Oracle was already in healthcare, but the Relsys acquisition takes it to the heart of concerns around drug provenance and compliance. Regulatory compliance remains one of the best ways to sell software–nobody wants to do it, but everyone has to. It’s like flossing your teeth–if you could license an application to do that for you, you would, right?”

“Sun’s heavy concentration of financial services, telecom and manufacturing customers and overweight dependence on a secularly declining segment (UNIX servers) put Sun at a disadvantage during this downturn versus more diversified competitors,” he writes in a research note. He says most of this is in the stock–down 79 percent in 2008–but says that a 76 percent uptick in the stock since the beginning of December and a 30 percent move in just the past three days “creates a compelling entry point,” by which he means a chance to short the stock.

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It’s no surprise, obviously, that financial advertising has slowed down in the first three quarters of 2008. The surprise is that it’s only been a 10 percent reduction (so far), according to Nielsen.

There are also some interesting breakdowns: Mortgage and loan companies spent 62 percent less (of course). But credit service companies increased their spend by 22 percent, and investment service companies boosted their spend by six percent.

Here’s Nielsen’s list of top 10 financial advertisers (click chart to enlarge): Note that Bank Of America (BAC), one of the comparative winners during the meltdown, has cut its spend by 30 percent so far this year–slightly more than teetering Citigroup’s (C) 26.5 percent cut. Previously left-for-dead ETrade (ETFC), meanwhile, bumped up its spend by 24.5 percent.

Want more unpleasantness? OK. Comes now yet another ad executive to tell you that next year will be very unpleasant for anyone looking to make a living off of advertising revenue.

U.S. advertising spending will drop 5-8 percent next year, says Steve Lanzano, chief operating officer of MPG North America, a unit of French advertising conglomerate Havas SA. Lanzano predicts that sports advertising, long considered one of the most impervious to downturns, will get roughed up as well:

Even television sports, which have become more popular with advertisers since audiences tend to watch the events live rather than recording them, will suffer from the broad pullback in marketing spending, said Lanzano.

Lanzano estimated 9 to 10 percent of spending on broadcast sports comes from financial services and automotive, both industries that have been in turmoil. ‘That’s a lot of money moving out,’ said Lanzano.

‘Because of the hits in the categories that support sports–whether it’s financial or automotive or retail–I think they might take a little more of a hit than they would in other recessionary periods,’ he said.”

OK. Let’s break the glumness up a bit, shall we? If you’re looking for a cheap laugh, head to the Hollywood Reporter’s take on the Nielsen numbers. Then feast your eyes on the unintentional, yet very successful contextual advertising placed to the right of the story (which is where I borrowed the image currently at the top of this story).

Youssef Squali, an analyst at Jefferies & Co., this morning said that checks indicate that the top ad categories in Yahoo’s display segment are under pressure, and will likely cause second-quarter results to come in at the low end of expectations. Squali, who notes that the display business accounts for about 40 percent of Yahoo’s revenues, says there are indications of weakening ad spending in autos, financial services and consumer packaged goods.

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