MediaFile

McClatchy will make $200mln from digital this year

McClatchy Chief Executive Gary Pruitt shared some details of the newspaper publisher’s operations in his speech on Tuesday at the Newspaper Association of America’s annual meeting. Here’s what he said, based on a transcript posted at the NAA’s website:

At McClatchy, 15% of our advertising revenue today comes from online. McClatchy, a company founded before the advent of electric lights, will generate nearly $200 million dollars in digital revenue this year at a higher profit margin than our print business.

What significance is this?

    Fifteen percent is above the average newspaper publisher’s take from digital $200 million would be almost enough to run The New York Times’s newsroom operations for a year. Not bad.

Higher profit margins than print? We know Gary is a big fan of pop music to highlight his industry presentations, and that he likes the Rolling Stones in particular. Maybe “Time Is on My Side” would be a decent choice for those kinds of numbers.

Actually, Gary *did* think of some Stones songs that would characterize the current state of newspapers: “(I Can’t Get No) Satisfaction,” “Gimme Shelter,” “Shattered” and “19th Nervous Breakdown” made the list. In the end he scrapped Mick and Keith and went with the Battle Hymn of the Republic.

GlobalPost memo says overseas news doing well

Newly launched international news service GlobalPost.com had a good first quarter and sees positive signs for the rest of the year, including coming in under budget and raising more money to finance its operations. That’s not bad, and looks all the better considering how the news business is under assault these days. Oh, and it aims to be cash-flow positive by the fourth quarter of 2011.

Here is a quick reminder of what GlobalPost is, lifted from a story I wrote about it earlier this year:

With 65 correspondents in 46 countries, GlobalPost will have its own website and sell news to papers whose readers want in-depth, analytical stories that supplement what they get from news wires such as The Associated Press, Reuters and Bloomberg.

Could Google buy Twitter? Ask Arrington, then ask Swisher

******We sprinkled updates into this blog. We’re highlighting them like this.******Thanks to TechCrunch, U.S. tech reporters are about to spend another weekend working instead of playing. UPDATE: Or maybe Kara Swisher at All Things D will save them!******Two sources told proprietor Michael Arrington that Google “is in late stage negotiations to acquire Twitter.” He wrote:***

We don’t know the price but can assume its well, well north of the $250 million valuation that they saw in their recent funding.

***

Twitter turned down an offer to be bought by Facebook just a few months ago for half a billion dollars, although that was based partially on overvalued Facebook stock. Google would be paying in cash and/or publicly valued stock, which is equivalent to cash. So whatever the final acquisition value might be, it can’t be compared apples-to-apples with the Facebook deal.

***

Why would Google want Twitter? We’ve been arguing for some time that Twitter’s real value is in search. It holds the keys to the best real time database and search engine on the Internet, and Google doesn’t even have a horse in the game.

Google CEO to keynote newspaper convention

This ought to be fun.

Eric Schmidt, who will keynote the Newspaper Association of America’s annual convention, runs the search engine company and advertising beast that many journalists at sick and/or dying newspapers blame for sucking up some of their advertising dollars.

(They also blame Yahoo, which touts its newspaper consortium that tries to help the papers make at least some honest dollars off ad sales)

Google also is the company that deep-sixed its program to sell newspaper advertising because it didn’t make enough money.

AH Belo cuts employee pay

AH Belo, publisher of The Dallas Morning News and Providence Journal, is climbing on board the newspaper pay cut train to save money as the print business flounders.

Usually when this happens, investors sell what little of the depleted, deflated stock they already own. Today, AH Belo is up 8.7 percent. We assume that is not because they see positives in the “streamlining” of the business. The whole market is up.

This, friends, is what they call bad news.

Excerpts from Chief Executive Robert Decherd’s memo to employees:

On Tuesday, the Board of Directors approved my recommendation to reduce my base salary by 20 percent and the base salaries of other Management Committee members by 15 percent, effective immediately. In addition, all full-time employees making more than $25,000 per year will have reductions in base salary as follows:

Microsoft, Gates master the art of product placement

There is no better way to learn about the art of product placement than to learn from the masters. Today, that means Microsoft Corp and the Bill and Melinda Gates Foundation, both of which were the subject of articles about how they’re delivering their messages like little pills wrapped in the sugar coating of the entertainment you consume.

Ad Age:

Can Microsoft market its way out of the search basement? Probably not, but it’s going to try, entrusting [ad] agency JWT to craft a campaign for its new search engine, alternately dubbed Kumo or Project Kiev or Live Search, depending on who’s talking about it. … The service is being tested and is expected to make its debut in the summer. … Industry executives expect JWT, part of WPP, to unveil an estimated $80 million to $100 million push for the new search engine in June, with online, TV, print and radio executions. Microsoft spent $361 million on U.S. measured media in 2008, the bulk of it devoted to brand advertising and smaller chunks to other Microsoft brands such as Xbox and MSN, according to TNS Media Intelligence data.

The New York Times:

The huge [Gates] foundation, brimming with billions of dollars from Mr. Gates and Warren Buffett, is well known for its myriad projects around the world to promote health and education. It is less well known as a behind-the-scenes influencer of public attitudes toward these issues by helping to shape story lines and insert messages into popular entertainment like the television shows “ER,” “Law & Order: SVU” and “Private Practice.” The foundation’s messages on H.I.V. prevention, surgical safety and the spread of infectious diseases have found their way into these shows.

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.

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 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