Washington Post Reeling: Print Ads Down 22%, Online Growth Slowing To A Crawl

Washington Post Reeling: Print Ads Down 22%, Online Growth Slowing To A Crawl

No point in comparing the Washington Post's Q2 numbers to Wall Street's expectations -- the newspaper business has gotten hammered so badly that only one analyst -- Lehman's Craig Huber -- is offering up estimates anymore. But for the record, the Post's (WPO) performance was worse than Craig predicted.

The details: The company lost 31 cents a share on revenue of $1.1 billion, which is up 6%. Back out one-time charges and EPS climbs back to $5.70 -- below Craig's $6.90, if you're scoring at home. But those numbers include Wapo's Kaplan group, which continues to do quite well.

The newspaper unit, of course is a different story:

Revenue $197 million, down 13% y/y

Operating income, net of a $79.8 million charge for buyouts/layoffs, is a $16.9 million loss, versus a $17.7 million gain last year. That's because both advertisers and subscribers are fleeing the paper: Print advertising was down 22% in the quarter, with subs for the daily edition down 2.6% and the Sunday edition down 3.7% for the first half of 2008.

What about online? No help there: online revenue growth is slowing. Digital was up a mere 4%, to $29.3 million, decelerating from modest 8% growth in Q1. Display ads were up 11%, down from 17% in Q1, and classified ads on washingtonpost.com shrank by 1%; in Q1 they'd at least grown 2%. ...

Hearst-Argyle TV: Misses Estimates, Local Ad Sales Off 10%

As we learned from CBS yesterday, local TV is getting hammered by the ad slowdown. More evidence: Hearst-Argyle TV (HTV), one of the largest independent owners of network-affiliated stations, missed Q2 estimates for revenue and EPS. Total revenue for the quarter was down 5.6% to $182 million compared to $149 million on year ago. EPS came in at 15 cents a share. Analysts had been looking for $190 million revenue and 20 cents, but only three analysts bothered to do a forecast for the company.

The problem: Hearst-Argyle is near 100% dependent on local US ad revenue, the hardest-hit sector in TV. Non-political Q2 ad sales were down 10% from the year before, with weakness across multiple ad categories: automotive, retail, consumer packaged goods, telecommunications, furniture, movies, restaurants, and health services.

The company didn't provide guidance for Q3, but it should benefit a somewhat from the ramp-up of political spending in battleground states. The company also owns 10 NBC affiliates, which should be getting some of the $150 million in local Olympics-related advertising. The bad news is that digital revenue for the company is slowing down, too. Digital revenue was up 13% in the quarter to to $5.7 million, a deceleration from the 22% growth in Q1...

Opinion: Are blogs replacing newspapers?

Don Dodge from the Microsoft Startup Zone has said that blogs are replacing newspapers with regard breaking news and analysis and fast becoming more professional.

There are 25% less traditional journalists in the United States than 10 years ago, and this fact has been put at the door of Web 2.0. 

The public's perception of blogs is also evolving, the general public are starting to view them as reliable news sources.

"Convergence in digital technologies the blending of computing, telephony and screen-based media devices is something we can't ignore," saysMartin Hirst is the Curriculum Leader and Associate Professor of Journalism at the Auckland University of Technology.

Amazon Announces New Payment Services

Amazon Announces New Payment Services and Updates to Mechanical Turk

In a quick succession of announcements, Amazon released a set of hosted e-commerce payment services, as well as anupdate to its Mechanical Turk service. The payment service, Checkout by Amazon, will allow online retailers to use Amazon's one-click checkout system, calculate shipping costs and tax, as well as allow their customers to track shipments...

Checkout by Amazon

Out of the two announcements, the payment services service are the most interesting. Amazon gives its customerstwo options: Checkout by Amazon or Amazon Simple Pay. Simply Pay is basically a stripped-down version of the full Checkout package and doesn't include the one-click checkout and most of the order management features such as calculating sales tax and shipping rates, creating packing slips, or collecting buyer feedback. Simple Pay, on the other hand, allows sellers to use more payment options, including credit cards and bank accounts. Checkout by Amazon can only accept credit cards.

These services are basically an extension of Amazon's "Flexible Payment Service." This service (which has been in beta for quite a while now) gives developers a set of API that hook into Amazon's payment services. One area that Amazon is especially targeting with this is micro-payments.

With these new services, Amazon is going up against Google Checkout, as well as most credit card merchant accounts. However, with Amazon's already established reach among consumers, as well as the level of trust that most consumers have when it comes to working with Amazon, both Checkout and Simple Pay have a distinct advantage over their competition. For merchants, Amazon's Checkout service also offers a wider range of services than most credit card processors or Google Checkout currently offer. Google Checkout, however, is generally cheaper than Amazon's offerings - though it also offers fewer services...

Over-the-top Video and Broadcast Media

Ed: First, news has moved online, hurting legacy newspapers. Is online video starting to impact broadcast media? Or is it the economic slowdown? Note that user growth at Google and social networks have not slowed.

Akamai CEO: Media And Entertainment Business Growing Slower Online

Is the Web video boom already starting to show its age? Yes, says Akamai Technologies. The Web content distributor says that traffic growth at the media and entertainment sites it services is slowing.

That's one of the reasons Akamai cut its full-year sales and profit guidance today, and issued a third quarter outlook below Wall Street's estimates. Shares dropped 17% after hours to $25.96, near the company's 52-week low.

What does that mean? Not that fewer people are watching video on the Web, or that people are watching less video on the Web. It just means that the rate of growth is decelerating. Which isn't good news for Akamai (AKAM), one of the companies that gets paid to push Web pages and media to your computer...

Italian TV Company MediaSet Sues Google, YouTube for $800 Million

Once again, a major media company is suing Google because of alleged copyright violations by users on YouTube, Google's popular video sharing site. Today, the Italian media company MediaSet filed a lawsuit against YouTube in Italian courts for about $800 million (500 million Euros) in damages. In a statement, the company announced that it found 4,643 videos and clips that it owned on YouTube on June 10. MediaSet claims that it lost the equivalent of of 315,672 broadcasting days because of this.

MediaSet owns a number of terrestrial and satellite channels in Italy, including Canale 5, Italia 1, and Rete 4. As of now, it seems the videos that MediaSet claims as copyright violations are still available on YouTube.

CBS: It's Not An Ad Slowdown Anymore - It's An Ad Recession

CBS reported Q2 numbers that were basically in line with consensus this morning -- revenue of $3.9 billion, vs. $4.1 consenus; adjusted EPS of 53 cents, vs 51 cent estimate -- but that just means that CBS proved why Wall Street now hates the company. Revenue was up just 1%, while operating income, free cash flow and earnings are all dove down -- that's because ad sales, whch are down, are much higher margin than syndication sales, which are up.

This is the problem with running a company that's almost entirely dependent on ad revenues -- unlike Viacom, News Corp, Disney and NBC U, there's nothing else to buffer the downturn. The real culprit here, CBS says, are local ads, which are terrible; national ad sales doing better. Overall: TV ad sales down 6%, radio 9%.

REVENUE: $3.9 billion, up 1%

OPERATING INCOME: $637 million, down 15%

FREE CASH FLOW: $464 million, down 18.6%

EPS (adjusted) 53 cents, vs 57 cents last year...