Another indicator that things moved very quickly: While the Times has said it will conduct an internal and external search for a successor, it has not hired a search firm for the job, according to spokesman Robert Christie.

That said, the Times has contracted with executive recruiter Egon Zehnder International to fill a board of directors seat vacated by former Drugstore.com CEO Dawn Lepore in June. People familiar with that search say the company has been looking for candidates with digital expertise — something they’ve also indicated will be important for Robinson’s successor.

In August, the Worcester, Mass., paper put up a Times-style pay wall: Visitors can read 10 “local” articles a month for free, but after that they need to pay up. It’s not a coincidence that the Telegram is using the same idea that the Times will try in a few months–the paper is one of several local titles owned by the Times itself.

So. How’s that Telegram doing since the wall went up?

Just great, Times CEO Janet Robinson said during the paper’s earnings call today: The Telegram’s metrics are “on plan,” and traffic hasn’t suffered.

In fact, Robinson said, the Times was pleasantly surprised to see that the Telegram’s unique visitors number had increased since the wall went up.

What’s that? I asked the Times for numbers to flesh that one out, but it declined. ComScore, though, does back Robinson up: The Web traffic counter says 281,000 U.S. unique visitors came by the Telegram in August, and that number crept up to 294,000 in September.

That’s a tiny bump, though comScore often has a difficult time measuring smaller sites. For comparison’s sake, note that the Telegram tells advertisers it reaches 700,000 uniques a month.

Still, a bump is a bump. And it’s certainly not the plummet that many people would expect. When the London Times put up a pay wall this summer, for instance, it saw traffic drop a reported 90 percent. (News Corp. owns both the London Times and this site.)

So how do we explain the Telegram’s increase? In the absence of input from the Times or the Telegram (I’ve asked both for comment), we have to speculate. Feel free to add your own in, but I can start with a few theories:

• Maybe the Telegram had some particularly blog-friendly, Facebook-friendly or Google-friendly stories in September. If that’s the case, the metered model would work well for the site, since it encourages casual visitors to show up via referral, without having to pay up. For a relatively modest site like the Telegram, you wouldn’t need many high-traffic stories to push up its base number.
• Or maybe it’s just as simple as a seasonal spike: Traffic numbers often droop in the summer, when people have better things to do than sit in front of their browsers, and then spike back up in the fall.

In any case, this should give the Times a bit of confidence about its strategy for the flagship paper, which it promises to tell us more about soon.

UPDATE: Some readers are having a hard time accepting Robinson’s assertions and comScore’s numbers.

I have no reason to think that Robinson, the Times or the Telegram made the data up. If you’re a conspiracist who thinks otherwise, you should note that the NYT wasn’t boasting about the data during the call, though Robinson did take time to read off a whole laundry list of digital accomplishments. It only came up in response to a question about the Telegram’s performance.

But different third-party analytics companies often reach different conclusions. So if you do want to look at a different data set, here’s one from Compete, via Jonathan Mendez. As you can see, it tells a very different story–a 20 percent drop from August to September (click to enlarge):

Three months ago, the New York Times seemed to have halted its advertising skid after a very long slide.

Perhaps it has started up again. Ad revenue dropped one percent during Q3: Digital revenue jumped 14.6 percent, but that wasn’t enough to counter a 5.8 percent drop in print ads–which CEO Janet Robinson had thought would move up again this quarter. This morning, though, she cited “uneven economic conditions” and “marketplace volatility.”

Meanwhile, circulation revenue dropped 4.8 percent, and the company’s overall revenue sank by 2.7 percent.

The Times isn’t terribly optimistic about the fourth quarter: It thinks prints ads may improve “modestly,” while digital will grow by 10 percent, which is a deceleration from both this quarter as well as the previous quarter’s 21 percent growth rate.

Here’s the full breakout for the Times’ digital properties (NYT.com, About.com, etc), which appear to be doing pretty well:

• Total Internet revenues increased 13.3 percent to $89.4 million from $78.9 million.
• Internet advertising revenues increased 14.6 percent to $78.3 million from $68.3 million.
• Internet advertising revenues at the News Media Group increased 21.6 percent to $47.4 million from $39.0 million, mainly due to strong growth in national display advertising.
• Internet businesses accounted for 16.1 percent of the company’s revenues for the third quarter of 2010 versus 13.9 percent for the third quarter of 2009.

Meanwhile, the Times doesn’t have anything new to say about its plan to move its main Web site to a “metered model” pay wall next year. Perhaps we’ll hear something about it during the 11 am earnings call.

Instead, she says, she prefers to think of the publisher as as “multiplatform” brand. That’s the Web, the iPhone, the iPad, the iPad competitors we haven’t seen yet, etc.

Okay. Except that Robinson spent much of her remaining time this morning underscoring just how important the newspaper–as in, ink and paper–business is to the New York Times (NYT).

On multiple occasions, Robinson pointed out that the print business, which accounts for about 75 percent of the paper’s ad revenues (that number would be higher for overall revenue), isn’t going away. That seems obvious but for some reason needs repeating: “It’s very clear that our print business is a very profitable business, and we will be printing the New York Times for many many years to come.”

And Robinson repeatedly stressed that the Times’ upcoming digital paywall plans will focus intently on hanging on to print subscribers, and that valuable, direct relationship they have with the publisher. “We’re continuing to look at how we marry print and digital,” etc. etc.

What about those plans? Stay tuned, Robinson said–the paper will announce pricing and bundling options later this year. But as we’ve previously surmised, the pay plans won’t be specific to the Web, but will also include options for the paid iPad app the Times is working on, and perhaps for other devices.

Meanwhile, asked to comment about the Times’ relationship with Apple (AAPL) and its interest in an Apple-run newspaper subscription service, digital head Martin Nisenholtz did a masterful job of not saying anything conclusive. He did, however, note that:

• The Times’ free iPad app is a big hit with advertisers, and that “we have no reason to be working iAds”–Apple’s in-house ad program–for that app. The Times does use iAds for its iPhone app, though. (I’ve found them to be quite buggy, by the way.)
• Even though the Times sent developers to Cupertino prior to the iPad launch, and Nisenholtz got stage time with Steve Jobs during the launch event, the paper “[doesn't] align ourselves” with any particular platform. And they’re very excited to see the new tablets running on Google (GOOG) and Microsoft (MSFT) software.

The quick breakdown: Print ads are still declining and were down 6.1 percent. But that’s better than the 12.3 percent drop the paper recorded in Q1 of this year. And digital ads were up 21.2 percent; digital now represents 26 percent of the company’s ad revenue. Circulation revenue was up 3.2 percent.

Do recall that last year the paper, along with the rest of the media business, was still reeling from the economic meltdown, so these are very weak comps. But, they’re still an improvement.

More on the way, says CEO Janet Robinson, who predicts print ads will move up again in Q3. But she says the paper can’t expect the same bump from digital–she is looking for something “in the mid- to high teens.”

And costs are going to start creeping up, too, due to the “impact of rising newsprint prices, the timing and level of variable compensation, the elimination of certain salary rollbacks, and increased promotional spending and other costs associated with the launch of the NYTimes.com pay model.” [Emphasis added]

A security breach at AT&T has exposed the email address of thousands iPad owners–among them a who’s-who of the media and political elite.

Valleywag reports that by exploiting a vulnerability in the AT&T Web site, hacker group Goatse Security was able to collect email addresses associated with the SIM integrated circuit card identifiers, or ICC IDs, in the 3G version of Apple’s (AAPL) new slate device. And it collected some 114,000 of them–from New York Times Co. (NYT) CEO Janet Robinson to New York Mayor Michael Bloomberg and White House Chief of Staff Rahm Emanuel–before notifying AT&T (T) of the breach so the carrier could repair it.

Interestingly, AT&T claims it was a business customer who alerted it to vulnerability on Monday, and not Goatse or Valleywag. The carrier says that the only information compromised were ICC IDs and the email addresses attached to them. And contrary to some rumors making the rounds, AT&T says it is not advising iPad 3G owners to disable 3G.

Obviously, this is an ugly humiliation for AT&T. But as a security breach, it’s not devastating. The only data compromised were email addresses and ICC IDs. The former could be sold to spammers, and I’m not sure there’s much ill to be done with the latter. Which is not to downplay the severity of the incident. AT&T’s negligence here is deeply troubling–and worth remembering every time we entrust our personal data to someone else.

AT&T, which would not tell me exactly how many Apple iPad 3G users are affected, did release the following statement:

AT&T was informed by a business customer on Monday of the potential exposure of their iPad ICC IDS. The only information that can be derived from the ICC IDS is the e-mail address attached to that device.

This issue was escalated to the highest levels of the company and was corrected by Tuesday; and we have essentially turned off the feature that provided the e-mail addresses.

The person or group who discovered this gap did not contact AT&T.

We are continuing to investigate and will inform all customers whose e-mail addresses and ICC IDS may have been obtained. At this point, there is no evidence that any other customer information was shared.

We take customer privacy very seriously and while we have fixed this problem, we apologize to our customers who were impacted.

Apple did not respond to a request for comment.

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.

If that time frame puzzles you, you’re not alone. Plenty of pundits are wondering what kind of digital wall could possibly require a year’s worth of assembly. Can’t you just slap this stuff up pretty fast? It’s the Internet, after all.

New York Times (NYT) Chairman Arthur Sulzberger Jr. and CEO Janet Robinson, in their memo to employees, stress that the paper is moving with “appropriate care” in the next 12 months because “it will take time to get this right.”

Perhaps there are other reasons to move slowly. The duo’s memo, for instance, holds out the possibility that the paper might end up working with a partner. Steve Brill’s Journalism Online consortium, which is promising to create pay walls for a large number of papers, would be one option.

And last I heard, some News Corp. (NWS) officials were holding out hope that the Times could join its pay wall consortium. (News Corp. also owns this Web site.) If the Times does want to play well with others, moving slowly might make some sense while it waits for said others to catch up.

Meanwhile, some cynics (gasp!) have suggested that the Times announcement is merely a trial balloon. Though I have to confess I don’t see what that would accomplish.

But assuming the paper does go it alone and does intend to build this thing, would it really take a year? Yes, say two publishing sources with first-hand knowledge of both pay walls and big publishing companies.

The problem, in a nutshell, is that there are at least three different problems to solve: Authenticating current print subscribers so that they can get the online paper free; installing the “meter” that measures use for nonprint subscribers; and creating a commerce engine that can take orders, process subscriptions, figure out how to provide bundled offers–i.e., the cost of online access plus, say, a Kindle or Apple (AAPL) tablet subscription–etc.

None of this stuff ought to be rocket science, but that doesn’t mean it’s not hard, my pay wall experts say. Even if the Times builds its new pay wall on the bones of Times Select, the newspaper’s 2005-2007 attempt, it could easily take it a year to assemble this thing, they insist.

It’s possible that my sources are talking their book a bit–if building a pay wall were easy, there’d be less work for them. But I’m willing to take them at their word until someone convinces me otherwise.

This is all relative, of course: The publisher says Q4 prints ads are likely to be down 25 percent, which would be a bummer just about anywhere but the newspaper business. But last quarter, print was down 31.2 percent, and overall ad revenue was down 26.9 percent, so an improvement is an improvement.

The uptick at the Times’s digital business, however, looks more straightforward. CEO Janet Robinson says online ads will be up 10 percent this quarter, a big turnaround from last quarter’s 8.2 percent decline.

Robinson says that both the paper’s display ads, as well as its About.com content mill, are improving, but didn’t spell out the performance for each unit. Last quarter, About.com was already turning around, having posted a 7.2 percent revenue bump. But traditional Web advertising was down 18.5 percent.

None of the improvements, though, will be enough to prevent the Times from having to hack away at its cost structure. The publisher’s flagship paper is cutting 100 newsroom positions and will spend $50 million on severance charges this year.

Can the paper cut costs even more? It’s going to try, starting with a 100-person cut in its newsroom, which will bring headcount down by eight percent. But the Times is also counting on the ad market to pick up at some point, and it says it can now see the faint outline of a recovery taking shape.

During the paper’s earnings call yesterday, it offered a bit of insight into who was buying ads and who wasn’t. In the latter category: Banks, mutual funds and insurance companies, which were burning cash a year ago in an effort to convince customers that things were okay; movie studios and telcos also pulled back. But health-care spending was up, via big pharma and hospitals. Were they pitching consumers or legislators?

Bear in mind that ad revenue dropped 26.9 percent for the quarter, so all of this is relative. So when the Times talks about seeing “encouraging signs of improvement,” as CEO Janet Robinson mentioned in a press release yesterday, what exactly does she mean?

Here’s Robinson’s answer to that question, delivered during yesterday’s call. Transcript via Seeking Alpha:

We’re seeing improvement, a modest improvement. We’re seeing certainly more requests for proposals across the board. We’re seeing a modest growth in regard to commitment. We still are seeing just in time commitments, so the visibility continues to be cloudy, but I think we are encouraged that indeed we see advertisers telling us that their business is improving and consequently requesting more information from us in regard to rates and placement and certainly customized programs.

I’ll give you an example. The retailers in September as noted in my remarks, we started to see a little bit of a pickup. We have had in depth conversations with them in regard to their improvement. So we do see traffic improvement in regard to the stores and consequently when that’s the case, they tend to want to do more in regard to building even more traffic.

Same holds true in regard to some of the national advertisers with technology and national automotive, with certainly the bankruptcies behind General Motors and Chrysler and some activity certainly in technology and healthcare, we are seeing more commitments coming our way in regard to national schedules as well.

Surprise! They’re not that awful, at least by the diminished standards of the newspaper industry:

Excluding one-time charges, the publisher earned 16 cents per share on revenue of $570 million. Analysts expected the Times (NYT) to lose a penny per share on revenue of $561 million.

Ad revenue declined 26.9 percent, which is unpleasant but better than the previous quarter, when it dropped 30.2 percent. Internet revenue dropped by 7.2 percent and Internet ad revenue was down 8.2 percent. Both of those results are improvements over the previous quarter as well: Last quarter, Internet revenue was down 14.3 percent and Internet ad revenue was down 15.5 percent.

Some cautious optimism from CEO Janet Robinson:

Looking ahead, visibility remains limited for advertising in the fourth quarter. But as is the case across the media sector, we have seen encouraging signs of improvement in the overall economy and in discussions with our advertisers. Early in the fourth quarter, print advertising trends, in comparison to the third quarter, have improved modestly, while digital advertising trends are improving more significantly.

A little more color on digital: The big improvement this quarter was driven by a turnaround at the Times’s About.com content mill: Revenue was up 7.2 percent, way up from the 5.1 percent decline posted in the previous quarter. This makes sense, given that About is driven by pay-per-click ads and these have come back across the industry, led by Google (GOOG).

But the story is less impressive at the Times’s traditional Web sites. Ad revenue there was down 18.5 percent, which is better than the 21.6 percent drop the previous quarter, but nothing to write home about. As it has done in previous quarters, the publisher blames the decline on a drop in online classifieds, and I assume that much of the drop stems from vaporized employment ads. If this is the case, it’s going to be hard to move those numbers significantly for quite some time.

Yesterday, the publisher said that overall ad revenue had dropped 30 percent in the last quarter, which wasn’t surprising. But Internet ad revenue dropped 15.5 percent, which was a surprise, since it’s an acceleration from the previous quarter’s loss. What gives?

Times officials have multiple explanations:

1. A lot of the loss comes from our classified ads, which have been vaporized.
2. This year’s numbers don’t look good because last year’s numbers were so great.
3. At least we’re not Yahoo (YHOO)!

Check out this exchange from yesterday’s earnings call between analyst John Janedis, New York Times (NYT) digital boss Martin Nisenholtz and ad boss Denise Warren. Seeking Alpha:

John Janedis–Wells Fargo Securities: Martin, can you just talk a bit more about where you’re seeing on the display side with the news media, did any major customers pull out? And do you think you’re losing share relative to the total industry?

Martin A. Nisenholtz: No, I mean I’ll ask Denise to comment on this specific to The New York Times, but I don’t think we can point to any major losses. I think that her comments about overall volume on the side, on the businesses, is true of the digital side as well. I would point out that, to point to Janet’s [Robinson, NYT CEO] comment about most of the hit, a disproportion of the hit coming in the classifieds area.

Denise Warren: Can I just jump in and remind you again that we had a really, really, really robust quarter overall for nytimes.com last year, but really in the display area? So we are up against really significant comps. That’s just some context that I think is important that you have.

And just based upon what we’ve been seeing in the marketplace comparing to other sites there, we do believe we are taking share in the display marketplace, and we do believe we are performing better than most of our competitors in the display marketplace.

Martin A. Nisenholtz: I mean Yahoo just announced a 14% decline in display. I think, while we’re not breaking out the numbers, I think our display performance overall at nytimes.com and across the News Media Groups was better than that.

All of this sounds right to me (for the record, last year the Times’s Web ads grew 18.3 percent in Q2). But if the Times wants to keep investors optimistic about the company’s prospects, it’s going to need a better pitch than “we’re doing better than Yahoo.”

UPDATE: For a pretty good roadmap of where the Times is headed–more dollars from customers, fewer from advertisers–check out this smart piece from the Columbia Journalism Review. It notes, for instance, that the Times is now making nearly as much from subscribers as from advertisers.

The publisher was able to take a big chunk out of operating costs, knocking them down 20 percent. But revenue fell faster. The paper did say, though, that things got less bad as the quarter progressed, and that they’ll get slightly less bad next quarter, too.

The numbers: After factoring out one-time charges and benefits, the Times posted earnings of eight cents per share, well above the four-cent loss the Street was expecting. But revenue dropped 21 percent, to $585 million; the consensus was $603 million.

The Times posted an operating profit of $23.3 million; without one-time charges that number would have been $66.1 million. That’s worse than the $100 million the paper made a year ago, but much better than the $74.5 million it lost (net) in Q1.

But! Ad revenue declined 30.2 percent, an acceleration from last quarter’s 28 percent drop. In addition to the regular culprits, the Times noted a “lower volume of online advertising.” More details on that: Internet revenue dropped a shocking 14.3 percent, and Internet ad revenue was down 15.5 percent; last quarter they were down 5.6 percent and 6.1 percent.

The assessment from Times CEO Janet Robinson:

Based on what we have seen so far in July, we expect the advertising environment to continue to be challenging. We believe the rate of decline will moderate slightly in the third quarter from what we experienced in the second quarter.

As we look ahead, an enduring constant is the outstanding journalism of The New York Times Company and the esteem in which it is held by our readers. For the balance of the year, we are focused on developing innovative new products and platforms based on our high-quality journalism, particularly in the digital area, and continuing to aggressively lower our cost base to better align it with our revenues. When the economy and ad markets improve, we believe we will be very well positioned to benefit from the restructuring of our business.

But for better or worse, none of that matters to investors, who are trying to figure out what the company’s long-term prospects look like. In the near term, they look terrible.

In the first three months of this year, the New York Times Company (NYT) lost $74.5 million, or 34 cents a share once you factor out one-time charges, on revenue of $609 million. That’s worse than Wall Street’s low expectations of a five-cent loss on revenue of $630.8 million.

The reason, of course, is that the ad market is miserable in general, and even more so for newspapers. The company’s ad revenue was down 27 percent, notably worse than the awful 17.6 percent decline the Times recorded in the last quarter of 2008.

And as in the last quarter, former bright spots like the Internet business have now gone dark as well: Internet revenue was down 5.6 percent, Internet ad sales declined 6.1 percent, and revenue at the Times’s About.com unit dropped 4.7 percent.

Expect more of the same for the second quarter of this year, warns CEO Janet Robinson: “At this time, and it is early in the quarter, we believe the rate of decline in ad revenues in the second quarter will be similar to that of the first.”

The Times has been trimming costs (via salary cuts and layoffs) and has bought itself a bit of breathing room by getting rid of its dividend, taking on a very expensive loan from Mexican billionaire Carlos Slim and selling off assets like its Manhattan headquarters. It still has some moves it can make–it is trying to unload its stake in the Boston Red Sox and to find a buyer for the Boston Globe.

But at some point it’s going to have find a way to start selling more ads again. Because awards alone won’t save the paper–Pulitzers can’t even guarantee their winners’ continued employment.

The Times has stopped providing monthly revenue updates, but it has been pretty good about providing detail via its earnings calls. I’ll be on the road during today’s 11 a.m. call, but will check the transcript and get back to you later with the most interesting nuggets.

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.

Fear not! We’ll learn more about Slim in the near future–you can count on deep dives from both the Times and The Wall Street Journal into all things Slim.

Though I imagine some of these answers may be less interesting than people imagine. For instance, I’m pretty sure he views his Times investment as a way to earn 14 percent on his money and enjoy a nice equity kicker if the stock ever rebounds.

In any case, it turns out that Slim probably has some questions about the Times himself. Like who runs it and what they do. Financial Times:

Carlos Slim Helu, who has ridden to the rescue of the New York Times with a $250m loan this week, professed to know little about the closest thing America has to a newspaper of record just six months ago.

‘Do you know the New York Times?’ the world’s second-richest man asked one visitor in July. ‘Do you know this guy [Arthur] Sulzberger and some woman called Janet [Robinson, chief executive]? What do you think?’”

It’s too late for any more due diligence at this point, but that doesn’t mean you can’t continue to learn about your latest investment. Let me suggest two excellent books about the paper of record:

“The Trust: The Private and Powerful Family Behind The New York Times,” by Susan E. Tifft and Alex S. Jones: a doorstop of a book that’s also pretty readable. It will explain who Pinch Sulzberger is and how his forefathers built the family business.

“Hard News: Twenty-one Brutal Months at The New York Times and How They Changed the American Media,” by Seth Mnookin: a comparatively breezy read that focuses on a couple people who no longer work at the paper–reporter/fabulist Jayson Blair and his former executive editor, Howell Raines. I don’t think the Blair incident “changed the American Media,” but you can allow Mnookin some hyperbole. His book does do a very nice job of explaining the Times’s hidebound–and excellent–news tradition.

What else should Slim be reading as he studies up on his newest acquisition? Let me know in comments below.

There was just a glimmer of news at the event, though it wasn’t surprising or pleasant: The Times’s Web business is falling away, day by day.

Digital head Martin Nisenholtz said revenue at his unit had been OK until the last two months of the year, but that there had been “softness in November, accelerating into December…next year is going to be a different year, by a fairly profound margin.”

Bear in mind that the Times’s digital performance pre-November was grim to begin with–digital revenue grew just 4.3 percent in October–and it becomes possible to imagine that digital revenue will decrease for at least part of 2009.

Nisenholtz didn’t do anything rash like attach any numbers to his comments, but he did add a little bit of color: His About.com unit, which is boosted by cost-per-click/search ads, is still doing OK-ish. But the business of selling display ads to Times Web sites is getting pummeled, and could be “under great stress” next year, he says.

So if About.com is doing (comparatively) well, why not sell that asset to help the paper escape its cash crunch? I asked CEO Janet Robinson that question after the event. She did everything but insist that the paper would never part with About.com, and praised it up and down–“an extremely important part of our digital future,” etc.

But given a couple chances to do so, she never explicitly ruled out a sale. Given the paper’s position, I don’t think she can.

[Image Credit: 1962 NYC Newspaper Strike photo from Life/Google archive)

The details, via a release:

• October, which was terrible, was better than November: “In November, the rate of change in advertising revenue declined from what we saw in October. The entertainment, real estate and automotive advertising categories were especially soft.”
• That $400 million credit line that expires in May? Don’t worry about it: “We have no intention or need of fully replacing the $400 million credit facility expiring next year because our total borrowing under both agreements is projected to be significantly less than $800 million, and currently is approximately $400 million.”
• And that $225 million we might raise by mortgaging our HQ? That’s not a fire sale: “The proceeds will be used to repay existing long-term debt. The building provides a unique opportunity for us to borrow at attractive rates in today’s market.”
  
• Also, would anyone like to invest in our company and/or lend us money? “We are also looking at various other financing alternatives, including revolvers, public offerings or private placements. While the credit markets remain challenging, we expect to secure the financing necessary to meet our maturities when they come due”
• This won’t shock you, but we are going to spend a lot less money on things that aren’t people, paper or ink next year: Capital expenditures will drop from $140 million in 2008 to $80 million in 2009.