We've put three quarters behind us in 2009, and the most recent one was merely another miserable step downward for the beleaguered newspaper industry. Total ad revenue plummeted in the third quarter to $6.4 billion for the print jockeys, a decline of 28%. This info from the Newspaper Association of America drives home the notion that conditions will only worsen for the newspaper industry. So, if you're hoping those shares of New York Times Company (NYT), Gannett (GCI) and Washington Post Company (WPO), holding your breath will leave you little more than dizzy.

Of the total advertising revenue generated in the third quarter of 2009, $5.8 million came from print, the lowest quarterly amount this year. The $623 million in online advertising sold by America's newspapers was also 2009's worst. Both are down substantially from the same quarter in 2008, when the newspapers posted print ad revenue of $8.2 million and online ad revenue of $750 million, according to NAA data. At this time last year, we lamented year-over-year declines approaching 20%. Now, we have the same feelings as ad revenue drops approach 30%.

The folks in the news business are probably growing to hate Mondays. Gannett's (NYSE: GCI) profits are off by more than 50%, and the New York Times announced that it's chopping 100 jobs from the newsroom, along with an unspecified number elsewhere in the newspaper. Like Gannett, the New York Times cites declines in ad revenue as the reason for the decision. The company is hoping that employees will take voluntary buyouts where offered, but it is prepared to conduct a round of layoffs if necessary.

The newspaper, which is the flagship property of the New York Times Company (NYSE: NYT), cut 100 newsroom positions last year, mostly through voluntary buyouts, before a "relatively small" round of layoffs. This year's 100-job cut is approximately 8% of the newsroom, but the paper will still have the largest in the United States. Approximately 1,150 reporters and editors will remain. Already, 100 jobs have been slashed on the business side, leaving it now staffed at 1,850.

Gannett (NYSE: GCI) lost more than half its third-quarter profits year-over-year, as the newspaper industry shows yet another sign of decline. A substantial drop in ad revenue was the primary reason for the plunge.

The newspaper giant was able to stay in the black because of aggressive cost cutting, a move that can work for only so long. For now, it's the most popular option available to the beleaguered industry, as evidenced by a New York Times (NYSE: NYT) announcement that it would slash another 100 positions from the newsroom, and more positions elsewhere.

I wouldn't blame the Bancroft family if they took some comfort today in knowing that the bleeding of Wall Street Journal's advertising revenues, which declined sharply in July, are News Corp's (NYSE: NWS) problem now. Murdoch seems to have his work cut out for him, too. The Dow Jones (NYSE:DJ) paper's ad revenues were down 7.2% for the month over 2006, on a decline in volume of 20.9%. For the year, ad revenues are off 4.6%. The company's Barron Magazine suffered an even great drop of 9.5%, but remains up 15.8% for the year.

The drop off is especially foreboding given that the WSJ's digital edition ad sales revenue grew a whopping 24%, but still did not completely offset the shortfall in the tree-based edition. Technology ads declined the most, off over 75%, followed by classifieds, down 13.5%. Much of the classifieds drop is attributed to a decline in property for-sale ads, another casualty of the housing malaise. Strong ad sales in the financial sector helped soften the loss, though, up 21%.

The company's Ottaway Newspapers also lost advertising, down in ad revenue 16.5% for the month and 11.9% for the year.

The WSJ benefits from a strong circulation of over 2 million readers. Nonetheless, in 2006, 53.6% of Dow Jones' income came from advertising. Sharp, sudden loses are no way to please the new boss.

Advertising-supported content has become the dominant business model for the internet, as demonstrated by our (AOL, Time Warner, NYSE:TWX) recent change from a membership-based model. Advertising Age recently released its study of the 100 top advertisers and how they spend their advertising dollars. For all the brouhaha about the internet, traditional print advertising still dominates the marketing plans of the top corporations. A breakdown of 2006 expenditures by ad distribution platform shows --

1. Magazines -- $29.83 billion
2. Newspapers -- $29.80 billion
3. Network TV -- $27.16 billion
4. Spot TV -- $17.23 billion
5. Cable TV networks -- $16.75 billion
6. Radio -- $11.06 billion
7. Internet -- $9.75 billion
8. Syndicated TV -- $4.2 billion
9. Outdoor -- $3.83 billion

also see 2006 Advertising recap II- The big rollers

The alliance that Gannett Co. (NYSE:CCI), McClatchy Co. (NYSE:MNI) and Tribune Co. (NYSE:TRB) are reportedly going to form to court national advertisers to their Web sites would have been a better idea in 2002.

Advertisers like phone companies and car makers will get a one-stop shop to reach a national audience without the hassle of negotiating separate deals with individual papers through what the companies have dubbed "The Open Network," according to the Wall Street Journal (subscription required). {As an aside, can I make a plea to corporate america to stop the stupid code names.}

The question I have for the newspaper publishers is why they think the national advertisers will bother. They can reach much larger audiences through the portals like this one, Microsoft Corp.'s (Nasdaq:MSFT) and Yahoo! Inc. (Nasdaq:Yhoo), which has its own alliance with newspaper publishers. Plus, they have the option of using Google Inc. (Nasdaq:GOOG) to promote their brands. Moreover, most of these publications -- with the exception of USA Today -- aren't national in nature.

About the only way this can work will be if the papers price these ads so low that the advertisers would be stupid not to give the Open Network a try instead of spending their money with either Dow Jones & Co. (NYSE:DJ) or the New York Times Co. (NYSE:NYT). That won't be easy.

As the Journal notes, newspapers haven't had much sucess in working together to sell national print ads. With all of the ad money shifting online, what makes them think this alliance will work better? There's big pressure on newspaper publishers to grow their online businesses, which will remain smaller than the print side for some time to come.

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