MediaFile

Yu, Zuckerberg and the Facebook fallout

Why do we care about Facebook? People you know and respect use it. That includes you. People you know and respect who scoff at it still know what Facebook is. Facebook, like Google, is popular enough to have become a verb as well as a noun. If the public ever got a crack at buying shares in it, lots of people would get rich.

That’s why mass clucking ensued among the technology press when the word came out Tuesday that Chief Financial Officer Gideon Yu is splitting. The Wall Street Journal, so far as we can tell, broke the news. It said:

The departure of the 37-year-old Mr. Yu and the ensuing search for a replacement are likely to renew speculation that Facebook is stepping up plans for a public offering, despite the rocky economy. The company, which has turned down several acquisition offers in the past, has said it is hoping to go public in the next few years.

But some employees and investors, who have poured roughly $455 million into the company, according to VC Experts.com Inc., are eager for Facebook to start planning an offering and have raised questions about whether it has enough money to sustain its growth. Many others have said the company is over-valued, which — in addition to the economic downturn — hampered its efforts to fund an employee-buyback program last year.

One person familiar with the matter said Facebook’s financials are strong and the company expects revenue in 2009 to increase at least 70% from last year. (The New York Times has details on that too.)

The Journal also referred to the now famous $240 million that Microsoft invested in Facebook, giving the service a perceived value of $15 billion (see No. 4 in our list above). The problem is, the WSJ reported, Yu’s job “has grown more difficult, as Facebook has struggled to raise additional money at lower valuations.” If Facebook revenue is supposed to grow 70 percent — a giant leap — history would suggest, and nearly insist, that last year’s revenue total would have been only enough to buy a pack of Smarties.

Now showing: The cable show

The big story in the media for the rest of the week is the annual National Cable Telecommunications Association Show, or “the cable show,” as its commonly called.

This year’s primary topic looks like it will be how the big, traditional operators in the business will adapt to an age when the Internet is giving people more options to watch shows, and not always in a way that feeds the bank.

Here is our own take on the show from the Reuters wire:

Both sets of companies will be brainstorming on how to cope with or benefit from disintermediation: consumers can now watch decent-quality video online whenever they want, and often for free.

New York Times brings IHT into the fold

It’s no secret that the International Herald Tribune is part of The New York Times Co, so why not flaunt it? Visitors to nytimes.com and iht.com saw evidence of this thinking Sunday (or Monday, depending on where you are).

When you visit the IHT website, you now see a Web link on your Internet browser that says this: http://global.nytimes.com/?iht. The flag at the top of the page now reads: “International Herald Tribune: The Global edition of The New York Times.” The layout of the website also has been adjusted to resemble that of nytimes.com’s homepage. If you visit nytimes.com, a banner across the top of the page invites you to “try the new global edition,” which, of course, is what iht.com used to be. If you’re a regular Reuters reader, you can’t say you’re too surprised, as we told you last June that this was coming.

We’re curious about whether bringing the IHT closer into the fold allows the Times to cut its costs in any significant way, and will update this blog entry once we get some clarity on that. The Times is dealing with falling advertising revenue and also has had to take other steps such as selling its interest in its headquarters building and borrowing money at a high interest rate from Mexican billionaire Carlos Slim to help pay off debt. It also cut 100 jobs in its business operations, it said on Friday, and said it is cutting staff pay by 5 percent (and in the case of union workers in its newsroom, is asking them to agree to that pay cut to avoid news staff layoffs).

You were expecting positive newspaper news?

A Facebook friend of mine chastised me on Thursday after reading my story about salary reductions at The New York Times and buyouts at The Washington Post. He wanted to know why I hadn’t found anything positive to write about newspapers in a while.

Watch me use the the Newspaper Associations’ fourth-quarter newspaper advertising numbers, released on Thursday, to dash my friend’s expectations.

Here’s the roundup:

    Print ad sales: Down 20.6 percent. That compares to down 11.6 percent in the fourth quarter a year ago. It also is a downhill slide from 19.3 percent in Q3 2008, 16.1 percent in Q2 and 14.4 in Q1. Online ad sales: Down 8.1 percent versus up 22.3 percent last year. It’s also worse than the previous three quarters of down 3 percent, down 2.4 percent and up 7.2 percent. Total print and online? Down 19.7 percent versus down 10.3 percent last year. Previous three quarters? Down 18.1 percent, 15.1 percent, 12.9 percent.

If there’s a positive story to write, it’s that the bleeding might slow once the economy recovers. But when will that be? I’m sorry,  but the beatings really will continue until morale improves.

Read The New York Times buyout memos (edited highlights)

As we reported earlier on Thursday:

NEW YORK (Reuters) – Two of the most respected U.S. newspaper publishers, The Washington Post Co and The New York Times Co, are embarking on new cost cuts in the face of dramatic declines in advertising revenue.

You can read most of The Washington Post memo on MediaFile, as well as the juicy parts of what Washington Post Chairman Don Graham wrote to shareholders on Wednesday about the state of the company. Here, meanwhile, are the edited memos sent by New York Times executives to employees:

From Times Publisher and Times Co Chairman Arthur Sulzberger Jr, as well as Times Co Chief Executive Janet Robinson:

Read The Washington Post’s buyout memo

The Washington Post is offering new buyouts to help the money-losing paper cut costs as it pursues a plan to become profitable again. You can read our story about it, along with an interview with Publisher Katharine Weymouth. Meanwhile, here are some excerpts from her memo to Post employees:

I need not tell you that our industry is undergoing a seismic shift as readers face an array of media choices and our traditional advertising and circulation bases decline. The good news is that the appetite for news is as robust as ever. Thanks to our presence on the Internet and on mobile phones and other devices, our audience includes more readers now than we have ever had. But while online revenues have been growing, they have not yet grown fast enough to offset the declines we are seeing in print revenues. As we move forward, our path is pretty straightforward: we will have to reduce our cost structure…

Below are some of the specifics on the VRIP that we plan to offer certain exempt employees in the next few weeks. We also plan to offer a similar VRIP to certain Guild-covered employees. Post representatives will be discussing the proposed VRIP with the Guild in a few weeks, consistent with the terms of the labor contract. While this VRIP is similar in some ways to the programs we have offered in the past, it will not be as generous as some of those prior buyouts.

Read Washington Post chairman’s letter to shareholders

Washington Post Co Chairman Don Graham wrote a more than 2,000-word letter to shareholders for his company’s latest annual report. I managed to cut it down to the 587 words that I thought were really worth reading. Graham is the kind of chairman and CEO that you want to cover as a journalist because he seems to rely exclusively on straight talk instead of obfuscation — particularly when the news is bad for the company and for shareholders. Here are the 587 words, with the parts that I found even more interesting than the rest marked in bold type.

We could do without more years like 2008. … In past years, I have rattled on in these letters about our Company’s relationship to our shareholders. Generations of top managers at The Post Company have reiterated: we’re focused on the long run; we’re committed to building value for our shareholders. My own assets are more than 90% concentrated in the stock you own. All of these remain true, but I am in the embarrassing position of writing you after a year in which Post Company stock declined by more than 50%. Comparative results (“you should see what happened to the other newspapers”) offer no solace.

It’s central that you know this: in 1998, about 75% of the Company’s revenue came from The Post, Newsweek and our television stations. In 2008, almost 70% came from Kaplan and Cable ONE.

U.S. senator touts newspaper non-profit bill

Here’s another one that you can loosely file under “Government aid to newspapers,” even though there’s no money that taxpayers would fork over to newspapers. Maryland Democratic Senator Benjamin Cardin introduced a bill on Tuesday to allow newspapers to become non-profit organizations to help them survive.

Cardin points out that this wouldn’t help big chains facing bankruptcy, falling advertising revenue or some combination of the two. Instead, it’s designed to let the little guys — the community newspapers — survive, he says.

SENATOR CARDIN INTRODUCES BILL THAT WOULD ALLOW AMERICAN NEWSPAPERS TO OPERATE AS NON-PROFITS

Fox, New York Times sue U.S. government

The latest by-product of the financial crisis? Media lawsuits. More specifically: Government agencies deny or fail to respond to Freedom of Information Act (FOIA) requests by media organizations, which then sue to force the government to own up.

The two latest cases are from News Corp’s Fox Business Network and The New York Times (both outlets’ complaints are pasted below). Fox sued for what it said was the government’s failure to respond to a FOIA request, filed on February 26, 2009, which sought records relating to information that the Securities and Exchange Commission received regarding the potential violations of the securities laws or any other potential wrongdoing by R. Allen Stanford, or Stanford Financial Group and its affiliates. This request included, but was not limited to, the SEC’s response to complaints, tips or information and any resulting audits, inquiries and investigations.

The Times’s complaint, filed by investigative reporter and Washington Post alum Jo Becker and her editor, chides the Federal Reserve and the Treasury Dept. for stalling or failing to disclose documents related to the financial crisis, including communications between some of the top dogs in the bailout program over the Troubled Asset Relief Program, better known as TARP.

washingtonpost.com gets ready to move

It looks like the wheels are in motion for the eventual transplant of washingtonpost.com’s employees from their enclave in Virginia to the mothership at 1150 15th St, NW, Washington, D.C. An alert tipster spotted this advertisement on Page D4 of the Monday edition of The Washington Post (that would be the Business section, soon to be eliminated):

1515 North Courthouse Rd, Arlington, VA

84,000 square feet of sublease space available

Arlington VA @ Courthouse Metro

Top four floor of the building avail

12th floor: 21,177 SF

11th floor 21,177 SFf

10th floor: 6,900-to-21,324 SF

9th floor: 21,324 SF

Great views, furniture available, Cls to restaurants, hotels & shops, Fitness Center with locker room in the building, Computer room with raised floor, Parking.

Then there is contact information for two agents at Summit Commercial Real Estate