Estimated read time: 3-4 minutes
This archived news story is available only for your personal, non-commercial use. Information in the story may be outdated or superseded by additional information. Reading or replaying the story in its archived form does not constitute a republication of the story.
NEW YORK, Jun 21, 2006 (XFN-ASIA via COMTEX) -- Newspapers are seeing tremendous growth in online advertising, but newspaper executives are questioning whether it's enough as they present midyear updates to investors.
Tribune Co., a major newspaper publisher which is also facing turmoil in its boardroom, told investors Tuesday at an annual conference sponsored by the trade group Newspaper Association of America, that it hopes to see online advertising make up between 10 percent and 12 percent of its newspaper revenues by 2010, up from about 6 percent today.
Other publishers, clearly concerned by the inroads being made by Internet powerhouses like Yahoo Inc., are also working hard at growing their online businesses.
Donald Graham, CEO of The Washington Post Co., told investors he was pleased that online advertising was growing at about 35 percent a year, but he readily acknowledged that "we obviously cannot continue" to grow revenue at that pace indefinitely. Graham said, however, that online operations remained a key priority for newspapers going forward.
Earlier this month the NAA reported that online advertising at newspapers jumped about 35 percent in the first quarter of this year compared with the same period last year.
However, given that print-only advertising advanced just 0.3 percent in the same period, overall advertising revenue rose just 1.8 percent. Also, the online growth rate was slower pace than the 39.7 percent increased recorded in the year-ago period.
Many Wall Street analysts remain concerned about the prospects for growth at newspapers as more readers and advertising dollars move online.
Merill Lynch analyst Lauren Rich Fine told clients in a note June 16 that while newspaper companies were to be applauded for their moves to increase online ad revenues, "the core print business is under some real pressure."
Nonetheless, several executives voiced confidence in the newspaper business, which often produces profit margins of around 20 cents on the dollar, roughly double the average of companies in the S&P 500 index of blue chip companies.
William Dean Singleton, CEO of MediaNews Group Inc., a privately held newspaper publisher based in Denver, noted that he was investing in new presses and had high hopes for the future of newspapers.
Singleton also noted that "the Internet's what driving our business today, " pointing out that online revenue will make up about 7 percent of the company's revenue this year.
For some industry watchers, the question remains whether the growth newspapers are seeing from the Internet will be enough to offset the weakness they are seeing in traditional print advertising.
"Can you make a case that what they're gaining online could in time replace what they're losing in circulation?" said Ellen Berland Gibbs, a financial consultant. "That could be an answer for this industry ... (but) I don't think anybody knows."
Copyright 2006 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
MMMM
By Staff Reporter
(C) 2006 XFN, Inc. All rights reserved.
**********************************************************************
As of Friday, 06-16-2006 23:59, the latest Comtex SmarTrend(SM) Alert, an automated pattern recognition system, indicated an UPTREND on 05-09-2006 for TRB @ $29.38.
(C) 2006 Comtex News Network, Inc. All rights reserved.
(C) 2006 Xinhua Financial News. All Rights Reserved
