Newsweek unveiled its redesign just two weeks ago, but the company is already shaking things up big on the content side. Exhibit A: The June 8th issue will feature political satirist/professional Bill O'Reilly impersonator Stephen Colbert. This is newsworthy for two reasons: 1.) It's the first guest editor in the history of the magazine and 2.) The guest editor is a fake person of sorts -- a persona created by a comedian to mock the right-wing and expose hypocrisy.

Editor Jon Meacham told The New York Observer that "I was just very impressed with the range of his knowledge and he had an almost encyclopedic feel for anything that came up. As we think about ways to both inform and surprise readers of the magazine, the notion of having him as a guest editor seemed like a good one."

With circulation declining in large part due to the huge amount of free content available on the internet, some magazine publishers are adopting what seems like a counter-intuitive approach to competing: raising prices.

Magazines like Time, Newsweek, Business Week and even the upmarket New Yorker have long relied on low subscription prices to attract large numbers of subscribers, which in turn attracts advertisers. But the New York Times reports that The Economist has raised its price substantially of late and is still continuing to buck the trend of declining circulation. That has other publishers taking notice, and many are planning to increase their subscription and newsstand rates, after years of falling prices.

Shares of the Washington Post Company (NYSE: WPO) are trading in the red this morning after the company reported that its fourth quarter profit dropped by a massive 77%. Net income came in at $2.01 per share, verse $8.71 per share in the same period last year.

As I noted in the earnings preview yesterday, the company's flagship newspaper and its magazine division (Newsweek Magazine) have been hit hard with losses in advertising revenue, and both had a dismal 2008 year. The company's newspaper division lost $14.4 million in the fourth quarter and had a $192.4 million operating loss for the entire 2008 year. Its newspaper division had a slight profit of $10.9 million in the fourth quarter, but on a full year basis it posted a loss of $16.1 million.

Magazine publishers have believed that consumers and advertisers view them as very different from the daily newspaper. The paper is only read by the consumer for an hour, or maybe less. At the end of the day, it is gone. People will take an issue of Newsweek or Good Housekeeping around for days or even months. They may pick it up and read in several times.

Magazines have a longer "shelf life" than newspapers. That should make them more attractive to advertisers.

Some newspaper companies are actually going out of business. Others. like The New York Times Co. (NYSE: NYT) are facing the need to sell assets. The industry has crumbled in just a couple of years as information consumption has moved to the internet.

Early advertising results from this year show that magazines may be the next newspapers and that by 2010 some of them and the companies which own them may be in very deep trouble.

US News admitted that the advertising climate and competition from Time and Newsweek was too tough, so after decades as a weekly, it said a while back that it would publish 26 times in 2009. That is a lot of savings in printing and postage. The publication probably let a few people go.

But the magazine never made it to its new publishing frequency. Things are so bad in print advertising that now it says it will go monthly. According to The New York Times "Just five months after saying it would drop its frequency to every other week, U.S. News & World Report has decided instead to become a monthly magazine."

The magazine, which was founded in 1948, might as well fold. Putting out a news publication once a month when the internet allows people to get news minute-by-minute is not a smart idea. There is a good chance the magazine will not be around at the end of next year.

Over the last week, large magazine publishers like Rodale, Time, Inc., and Conde Nast have put a total of over 1,000 people out of work. The magazine industry is beginning to look like the newspaper sector. That means it is trapped without a way out.

As magazine publishers focus more on the internet, they confront competition like Google (NASDAQ:GOOG) News and CNN. Even on the web, publishing is too crowded for everyone to make it.

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

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.

Score one for the triumph of principles over marketing. At least in the case of small colleges.

According to a Bloomberg report, "The presidents of Holy Cross, Lafayette, Trinity and 58 other liberal arts schools have pledged in the past 10 weeks to withhold cooperation from Washington-based U.S. News on the most controversial element of its 24-year-old survey, a questionnaire asking colleges to assess competing schools."

Interestingly, no top-25 ranked school has joined the boycott. Bloomberg goes on to say that "Three-quarters of each school's score is based on information that is for the most part publicly available, such as class size, graduation and acceptance rates, and alumni giving. The controversial 25 percent comes from a 'reputational survey,' in which thousands of presidents, deans and provosts are asked to grade other schools' reputations."

I've always been unimpressed with these college ranking magazines. It seems like a great way to sell magazines to ambitious high school students and their parents, but I'm not sure I get the point: Shouldn't college be about finding the right fit rather than the best-ranked school you can get into? I know of no student who has regretted choosing a college based on which one he liked the best in terms of the experience and educational opportunities it offered. I know several who regret being lured in by name brands.

The problem is that the top college for a student varies from student to student, and suggesting that any college is somehow superior to another, in my opinion, misses the point. Congratulations to those schools that are standing up to the silly "reputational survey" and mad props to students and parents who are ignoring prestige in favor of finding a good fit.

MAJOR PAPERS:

• The Wall Street Journal (subscription required) highlighted the struggles of Southwest Airlines (NYSE: LUV), a company that is dealing with the competition catching up to them in a tough competitive environment. CEO Gary Kelly said, "The threat to our future is real."
• Citigroup Incorporated (NYSE: C) is expected to pay $700M for Automated Trading Desk, an electronic trading firm, reported the Wall Street Journal.
• News Corporation (NYSE: NWS) and Dow Jones and Company Inc (NYSE: DJ) have reached a preliminary understanding for a way to safeguard the editorial independence of the Wall Street Journal and the other Dow Jones publications, which had been the key road block to a deal, reported the Wall Street Journal.
• Walter Mossberg, the Wall Street Journal technology guru, spent two weeks testing Apple Inc's (NASDAQ: AAPL) new iPhone, and said it was "a beautiful and breakthrough handheld computer."

OTHER PAPERS:

• Also regarding the iPhone, according to Newsweek, Steve Jobs said of the high expectations for the iPhone, "I think we're going to blow away the expectations."
• The New York Post has learned that Nordstrom Inc (NYSE: JWN) has apparently reached a deal to sell its Faconnable chain to a Lebanese private equity firm.

CBS Corp. (NYSE: CBS) has its hands full with sinning talent.

The Washington Post Co.'s (NYSE: WPO) Newsweek reports that CBS Evening News anchor, Katie Couric -- who is dating a 33-year-old cougar -- plagiarized in her Notebook segment from a story by Dow Jones & Co.'s (NYSE: DJ) Wall Street Journal [subscription required] reporter Jeffrey Zaslow's March 15th Moving On column. Newsweek alleges that Couric's segment on the decline of libraries copied Zaslow's article in nine places. In response, CBS fired the Notebook segment producer.

And earlier in the week, Don Imus, whose radio program is carried by CBS Radio, suspended his show for two weeks after his comments on the Rutgers women's basketball team. So far Imus's remarks have cost his show two advertisers -- Procter & Gamble Co. (NYSE: PG) and Staples, Inc. (NASDAQ: SPLS). If enough cancellations follow his show will be dropped altogether.

I don't watch any CBS programming and I would avoid CBS stock. With a P/E of 17.5 and earnings expected to grow 13% in 2008 to $2.00, CBS trades at a Price/Earnings to Growth (PEG) ratio of 1.35. This seems expensive for a company whose $14.3 billion in sales have shrunk at a five year compound annual rate of -9.2% and whose net profit margin of 10.3% trails the industry average by three percentage points.

My view: skip Couric, Imus, and CBS stock.

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 CBS, Dow Jones, Procter & Gamble, Staples or Washington Post securities.

Apple Computer, Inc (NASDAQ: AAPL) ended the day at $75.40, up 38 cents or 0.51% up over last Friday's close. The stock is experiencing optimism over Wednesday's earnings report, which is expected to be positive with 1.5 million computers sold, at least 25-30% growth expected by some, and solid iPod sales and growth.

In an interesting twist, well known PC-enthuisist Chris Pirillo says that Windows Vista will double Apple's market-share as a result of inconsistent user interface, long delays, and an expensive price. And with analysts and investors being over-focused on iPods as a stock health indicator, Apple investors would no doubt welcome computer sales being more of a focus if they are long term investors.

Meanwhile, speaking of the iPod's stature, Steve Jobs appears unfazed by the Zune's social sharing features. Yes, you can wirelessly hand over a song that will play three times and then lock up. But Jobs doesn't think anyone will be more impressed than by just grabbing headphones and listening in on a cool song, pointing out how cumbersome it is to get the feature to work. "By the time you've gone through all that, the girl's got up and left!" Jobs said in the Newsweek interview. "You're much better off to take one of your earbuds out and put it in her ear. Then you're connected with about two feet of headphone cable."

Sometimes the simpler solution isn't the technologically complicated one...

Kaplan University, which is a long-time provider of education, is launching a new MBA program. It's called Kaplan University/Newsweek M.B.A.

That's right. It's not a mistake.

You see, The Washington Post Company (NYSE:WPO) owns both Kaplan and Newsweek. So, why not make an attempt at synergy and combine the two?

OK, the big question is: What does Newsweek have to do with business?

I'm not sure. In fact, MBA students are probably puzzled, too. It's impossible to know how many business professors assign Newsweek as required reading, but it is probably a low number. Also, it's probably safe to say there have been few Nobel prize winners in Economics from Newsweek – much less articles that have changed the landscape of business, even considering the magazine's recent juicy story on the boardroom drama at HP.

In fact, it would probably be embarrassing to say to friends and potential employers that you spent lots of money getting your MBA at Kaplan University/Newsweek.

One of the issues that Time Warner Inc. (NYSE:TWX) faces as it tries to improve margins is the bias against cutting editorial costs at well-known media properties. The Grahams face the same issue at The Washington Post Company (NYSE:WPO) and the Sulzbergers are up against the same wall at The New York Times Company (NYSE:NYT). Fortunately for the Washington Post, most of its revenues now come from its online education businesses, like Kaplan. Lucky for them.

For decades big, widely distributed editorial operations have been viewed as something of a public trust. Even some of the network news operations fell into this category until Bill Paley died. Then Larry Tisch came in and cut with a vengeance. Entire editorial bureaus were closed.

From the time that Henry Luce and his partners started Time Magazine in 1923 until Life Magazine was closed in 1972, Time, Inc. did not shutter any of its major publications. If Luce had not died in 1967, Life may have survived.

At companies where editorial standards are a bit more "flexible," cutting is no big deal. Dean Singleton has made a career of buying large city dailies and cutting their costs, including newsrooms, to the bone. He has purchased newspapers in markets as large as Dallas, Denver, and Oakland. If the papers do not make money, he closes them.

Time Magazine, Newsweek, The New York Times, and The Washington Post are institutions with lives that are measured as much in reputation as they are in economic success. And it is probably less popular with the press when their brethren are let go than it is with, say, auto workers. And there is nothing amiss with looking out for your own.

It is almost inevitable that Parsons & Co. are looking at the number of bureaus that Time has, and the number of senior editors, as well as the number of writers at People and Sports Illustrated. Why? Because these magazines, perhaps with the exception of the gossip found in People, are no longer the primary source of news. They may have been twenty years ago, or even ten. But that rationale has lost its teeth.

While it is hard to say that anything is inevitable, the clash of the dropping margins at Time, Inc. and the large editorial staffs at the magazine is coming. And if shareholder pressure keeps up, it may come soon.

Like millions of people, I visit Google every day – and often visit Google News. Then again, I write quite a bit and want to know what's already out there . As for Google News, it effectively aggregates huge amounts of content, ranging from blogs to major publications. Hey, it even collects posts from BloggingStocks.com (I also did a recent piece on Google News for BloggingStocks.com).

For example, today I visited Google News to check out the stories on, interestingly enough, a new company that wants to help traditional publications deal with the threat from Google News. The company is called Inform. It has a group of talented employees – including linguists, taxonomists, mathematicians and computer scientists – that has developed algorithms to better categorize online content (such as by tagging things like products, persons, stock quotes and so on).

A group of traditional publications, such as Washingtonpost.Newsweek Interactive, The New York Sun, NewsOK.com, The Huffington Post, The Deal LLC, and NameMedia, are using it to provide more content options for its readers. So, if you go to an article, you will see in-depth links to the publication's own archive, as well as outside content. The idea is that readers have more reasons to go to the sites of traditional publications.

I talked to Julian Steinberg, who is with Inform: "Google News broke new ground and showed consumers the power of topical surfing for news. Other agile, fast moving new media firms (topix.net, Digg) followed and made topical surfing the expected behavior. Traditional media unfortunately took too long and allowed a 'walled garden' thinking to reign. Soon the whole paradigm changed with a large percent of users coming in sideways and leaving sideways. Traditional media has started to realize that they need to co-opt this disruptive technology or risk ceding news' online point of entry to search engines."