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.

McNews is being squeezed by two market downturns. So, if you think most newspapers have it bad, realize that it could be much worse.

Gannett's (NYSE: GCI) major national paper, USA Today, is getting ready to report a 17% drop in circulation – the largest it has ever sustained. The popular daily is fighting a battle on two fronts. It has to deal with a media slump and a travel recession. It's hard to pick two tougher industries in this economic climate.

Gannett (NYSE: GCI), publisher of USA Today and other newspapers, as well as owner of many informational websites such as CareerBuilder.com, made some news of its own yesterday on Wall Street. After reporting second-quarter results, the stock had a great day. How great was Gannett's day? Shares closed higher by nearly 29%. Let me repeat that: 29%! And volume . . . it was way, way above the norm.

What in the world triggered this response by investors and/or traders? Gannett beat expectations. On an adjusted basis, the company made 46 cents per share. Earnings.com indicates that this performance is 10 cents better than analyst expected.

Back in the good 'ol days of say 2004, Gannett Co. (NYSE: GCI) was one of the few newspaper publishers Wall Street liked. Part of the reason was that many of the papers were in smaller cities such as Wilmington, Delaware, and Poughkeepsie, NY, where competition was not as great for advertisers. These days the publisher of USA Today is up the creek with the rest of the industry.

With its shares down more than 50% this year, it should come as no surprise that Gannett is joining the ranks of publishers that are laying off staff. According to a memo leaked to the unofficial Gannett blog, about 1,000 positions will be eliminated across Gannett's Community Publishing Division. Six hundred of those employees will lose their jobs, the memo says.

"Several GCI papers have already made recent job cuts, but at a higher rate: 5%," the blog says. "The division's dailies do not include USA Today, suggesting that any further reductions at Gannett's flagship could be on top of the 1,000 jobs eliminated."

Gannett investors -- who must be the few, the proud like The Marines -- must have been expecting the move. Shares of the publisher have soared 10% in the past month. About the only relief they are going to get is through a takeover by private equity companies. The publicly traded media companies have no interest in buying into an industry whose best days are behind it.

Gannett (NYSE:GCI) announced it May revenue results. Nothing in them was surprising.

According to the country's largest newspaper company, "Publishing advertising revenues in May were 14.3 percent lower." Classified ad revenue fell even more, almost 20%. Auto, real estate, and jobs marketing have begun to leave newspapers and financial trouble within those industries has cut their ad budgets to the bone.

The most disturbing piece of new is the report was that at USA Today, advertising revenue was 18.4 percent lower on paid ad pages of 260 versus 324 last year.

USA Today is part newspaper, part daily magazine. It uses color and graphics in a way that is closer to Time, Newsweek, or BusinessWeek than to a typical daily paper. It is also a national product, not local like other papers.

If the country's largest paper, and one of only two papers distributed widely in the USA is in such trouble, it may be a sign that the print ad downturn is moving quickly from newspapers to magazines. Some weekly publications like BusinessWeek are seeing double digit ad drops.

Newspapers may not be the last part of the print publication industry to fall apart.

Douglas A. McIntyre is an editor at 247wallst.com.

It should come as no surprise that collection agencies have stepped up their activities in the pursuit of monies owed by consumers. However, with the increase of collection actions there has also been an increase of unsavory collection practices, many of which are unacceptable or even illegal. USA Today published an article that exposes just the tip of the questionable debt collection practices iceberg. That article gives a glimpse of what consumers who are delinquent in payment are facing, and what they can do about improper collections practices.

According to USA Today, "Complaints against debt collectors, after plunging in 2005, are rising again, the Council of Better Business Bureaus says. Complaints surged 20% in 2006 and 26% in 2007, according to the BBB's preliminary figures. And the Federal Trade Commission, which receives more complaints about debt collectors than about any other industry, says it's seen a steady rise in complaints against debt collectors." Debtors need to be made aware that they have specific protections that are provided by law. I'll tell you where to get started.

Shares of Gannet Inc. (NYSE: GCI) are trading somewhat higher after the largest newspaper publisher reported better-than-expected earnings. To the dwindling number of investors who still care about the beleaguered sector, this is good news. But shares are barely budging because the overall numbers were dismal.

Net income was $191.8 million, or 84 cents a share, down 9% compared with a profit of $210.6 million, or 90 cents a share, a year earlier. Excluding one-time items, profit would have been 77 cents, a penny better than Wall Street estimates. Newspaper publishing revenue fell 8.6% to $1.51 billion as retail and classified revenue slumped. USA Today revenue rose 2.1% as national advertising held steady. Revenue from its much smaller broadcasting business fell 7% to $170.2 million.

The USA Today wins the prize for the Lamest Commentary to Date on the probable ousting of Merrill Lynch (NYSE: MER) CEO Stanley O'Neal:

NPR, television, the internet, The Daily Show -- consumers get their news from lots of sources these days, and the widespread accessibility to information is having an effect on the traditional newspaper business. Gannett Inc. (NYSE: GCI), which publishes about 90 daily papers including the nation's largest newspaper, USA Today, is feeling the ill effects of such competition.

Earlier today, GCI reported that its third-quarter earnings dropped 11% to $234 million, or $1.01 per share. Revenue was down 4% during the latest reporting period, to $1.81 billion. Newspaper advertising revenue slipped 6% to $1.19 billion and broadcasting revenue was off 3.4% to $189.5 million. Gannett owns 23 television stations in 20 markets, according to Hoover's.

With regard to analysts' expectations, the publisher's results were mixed. Earnings were a penny above Street estimates of $1.00 per share, while revenue fell just shy of the $1.82 billion figure expected on Wall Street.

USA Today reports that Apple Inc. (NASDAQ: AAPL) iPhone buyers love the new product. How much?

Ninety percent of 200 owners said they were "extremely" or "very" satisfied with their phone. And 85% said they are "extremely" or "very" likely to recommend the device to others, according to an online survey conducted and paid for by market researcher Interpret of Santa Monica, CA, which surveyed 1,000 cellphone users July 6-10. One happy user: Kelly Croy, a seventh-grade teacher in Oak Harbor, OH. "Overall, the coolest device I've ever owned," he says.

But there's room for improvement: At the top of their wish list: longer battery life, faster Internet speed and more internal memory. Other factors, including the lack of a physical keyboard, were well down on their lists.

Two journalists were not thrilled with it as I posted here and here. But what do you think?

Peter Cohan is president of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in Apple.

Movie Gallery (NASDAQ: MOVI), the parent company of Hollywood Video, is considering closing many of its 4,600 stores, putting the company up for sale, or both, after the second-largest brick-and-mortar video store rental chain, behind Blockbuster Inc (NYSE: BBI), failed to meet the requirements set by its lenders.

USA Today said the 2,000+ Hollywood Video stores in urban areas, which are in direct competition with Blockbuster, look most vulnerable. By contrast, the Movie Gallery stores are "in smaller markets without much competition," Sterne Agee analyst Arvind Bhatia told the newspaper. JP Morgan believes Blockbuster could benefit from any store closings.

Unfortunately, it's not only Movie Gallery facing these problems. Industry-wide video store rentals fell 13.1% in Q1 compared to the same quarter in 2006, according to Blockbuster. With new movies being released on DVD this quarter, including 300 and Blades of Glory, the business could see a boost in revenues soon.

But it's Movie Gallery that has to fight with the growing online business from Netflix (NASDAQ: NFLX) and Blockbuster. The company asked its lenders to relax some debt conditions and hired Lazard Freres as a financial advisor. While analysts are skeptical about Movie Gallery finding a buyer, the company's real estate may be attractive to some private-equity groups and could warrant a look.

Last week, Kroger (NYSE: KR), the nation's largest traditional grocery chain, launched its new milk brand to highlight its cholesterol-reducing ability. The milk, sold under the Kroger Active Lifestyle brand is considered the first national launch of cholesterol-cutting milk.

"There's a major trend toward health and wellness in the country," Linda Severin, Kroger's vice president for corporate brands told the USA Today. "Managing cholesterol is just a key need for many of our customers. This is a way we can help our customers be proactive with their heart health." The trend has shown lower-fat and fat-free milk sales to increase, while whole-milk sales have been on a decline, according to U.S. agriculture statistics.

The milk uses an ingredient with plant sterols, found naturally in some vegetables, fruits, nuts and other foods, and is recognized by the FDA as potentially helping reduce the risk of heart disease.

The Alien Tort Statute dates to George Washington's era. Today, however, it worries some executives in charge of global operations. Their concern: the 18th-century law could make contemporary business liable at home for the bad behavior of their employees around the globe.

Are violence and murder part of global business? Some overseas labor leaders say yes, and they're suing American companies in U.S. courts. Several lawsuits alleging violation of the revolutionary era law are awaiting trial in federal courts, according to an article in USA Today.

"The lawsuits have set up a showdown over whether boardrooms in the USA should pay big-money verdicts for crimes not prosecuted in countries where corruption and violence are often seen as a cost of doing business," writes Alan Gomez.

Sam Zell has gotten really rich without my help. But I have to wonder what is motivating the "grave dancer" to buy Tribune Co. (NYSE:TRB).

Of all of the things that that Zell could spend with the billions he's earned from the sale of his Equity Office Properties company, Tribune seems to be an odd choice. I know he's from Chicago and Tribune, owner of the Chicago Tribune and Los Angeles Times, is based there. But it's going to take more than civic pride to turn around Tribune.

The trends in the newspaper business are lousy. Though publishers are gaining Internet advertising revenue, it's not at a fast enough rate to off-set the decline in their core print business. Young people don't read papers and probably aren't going to start anytime soon.

Maybe Zell can prove naysayers like me wrong. Maybe private equity players will take an interest in Gannett Co. (NYSE:GCI), New York Times Co. (NYSE:NYT), and other publishers. But the newspapers continue to decline at faster rates than even the most pessimistic forecasts.

As the New York Times points out today, newspapers had an awful February. Advertising plunged 14 percent at USA Today, 7.5 percent at the Times (where I've done freelance writing), 5 percent at Tribune and McClatchy Co. (NYSE:MNI). Believe it or not before investors LIKED McClatchy before it acquired Knight Ridder last year.

I don't know what Zell and the members of the billionaire boys club who suddenly fancy themselves as William Randolph Hearst think they can do as publishers that the current crop of managers haven't already tried. Tribune, whose papers are mostly based in big cities where competition for readers is intense, seems like a particularly difficult company to turn around.

Like I said earlier, Zell has done fine in his career without my help. I only hope he understands the rough road ahead for Tribune.