NEW YORK, June 15 (Reuters) - U.S. newspaper executives will meet next week in New York to wrestle with one of their biggest challenges: persuading investors to stick around.

But there will be some conspicuous absences at the annual Mid-Year Media Review hosted by the Newspaper Association of America. Los Angeles Times owner Tribune Co. (TRB.N: Quote, Profile , Research) and Wall Street Journal publisher Dow Jones & Co. Inc. (DJ.N: Quote, Profile , Research) will skip the meeting. One is going private, the other may get bought.

Shareholders at both companies lucked out after the surprise bids helped their shares outperform the industry, which is struggling with a poor prognosis as advertisers and readers flee print for the Internet. Reuters Pictures Photo

At the top of investors' minds is whether more companies, such as USA Today publisher Gannett Co. Inc. (GCI.N: Quote, Profile , Research), could be buyout targets. Analysts say they shouldn't count on it.

"It's hard to see who the buyers would be," said Outsell Inc. media analyst Ken Doctor. "The markets are awash in capital, but essentially no private equity came after Knight Ridder or Tribune. When they look at the picture, they're saying there's not a lot of money to be made here in their usual three- to five-year horizon."

It is tempting to seek buyers as Dow Jones ponders News Corp.'s (NWSa.N: Quote, Profile , Research) $5 billion bid and Tribune heads toward closing the $8.2 billion buyout by real estate magnate Sam Zell. Many publishers' share prices continue to fall.

McClatchy Co. (MNI.N: Quote, Profile , Research) is down about 38 percent over the past 12 months, and Journal Register Co. (JRC.N: Quote, Profile , Research) has lost nearly half its value.

Long-time newspaper analyst Lauren Rich Fine, who retired earlier this year from Merrill Lynch, said investors should give publishers time to retool their businesses instead of leaping at buyouts to drive up share value.

"I have long been an analyst who was less focused on quarterly results, and more into companies building value over time," Fine said.

Ad sales performance remains grim. The New York Times Co.'s (NYT.N: Quote, Profile , Research) May ad revenue from continuing operations fell 8.5 percent, while The Wall Street Journal's ad revenue fell 3.4 percent. Reuters Pictures Photo

Companies that attend the conference, which starts on Tuesday, likely will field questions on when digital operations will make enough money to make them "growth" businesses again.

The answer, said Outsell's Doctor, is likely to be no answer because there is no certainty. "The decline that we're seeing is not going to be made up by online advertising any time in the next five years," he said.

"If you're losing advertising at mid-single digits in print and only growing at 20 percent in digital, you're slipping," said Thomas Russo, a partner at Gardner Russo & Gardner, which owns EW Scripps Co. (SSP.N: Quote, Profile , Research), McClatchy and Washington Post Co. (WPO.N: Quote, Profile , Research) shares.

Fine pointed to efforts by many publishers to build up their online ad business by working with Yahoo Inc. (YHOO.O: Quote, Profile , Research) and other search engine and media companies.

"There is still going to be this negative tone about the financials, but for people who are looking beyond the next couple of quarters, there's a slightly better sense of enthusiasm," she said.

Scripps is dealing with the situation in a different way: It's not coming. Russo said this is an attempt to remake its image. "They just want to get the point across that they're no longer a newspaper company." Two Scripps officials did not return calls for comment.

Humpty Dumpty won't get put back together

Posted by Charles Cooper

Earlier this week I ran into a colleague who had moved out of town a few months ago. After swapping the usual gossip, the conversation swung around to the recent layoffs sweeping the news business. Here in Northern California, both the San Francisco Chronicle and the San Jose Mercury News recently announced major cuts in staff. Then earlier this week, tech publisher CMP laid off some 200 employees in a bloodletting that included several of the company's best known reporters and editors.

These are rough times for the news business. The present is unsettling and the future appears grim. But as The Bard famously noted, the fault is not in our stars but in our selves. If we want someone to blame, just look in the mirror. Why it's taken this long for the media profession to recognize technology's transforming impact remains one for the history books.

I was reminded of the time when a moderator asked attendees at a meeting of The American Society of Newspapers Editors

if they recognized the name Craig Newmark. Only a few people raised their hands. Asked about Craigslist, a few more hands shot up.

That was in 2005.

Meanwhile the continuing popularity of RSS feeds and blogs has effectively put a coda on the supposedly halcyon era when journalism was a one-way soliloquy starting and ending with the reporter. Now it's a conversation with our readers--and that's been all for the good. No news about that any more. Observers of the tech scene like Dave Winer and Dan Gillmor, among others, have blogged about this shift for quite some time.

Sadly, the new reality kept getting ignored by the folks in charge at most media companies. Blogs? RSS feeds? Simply the flavor du jour. They'll pass from the scene quickly enough.

Wishful thinking, guys.

I don't understand what's so hard for them to grasp. Humpty Dumpty won't get put back together. The fragmentation of the media landscape is only in its early stages and the view will look a lot different over the next five years. Am I pessimistic? Not necessarily so. To be sure, the emergence of new ways of delivering information is going to create new challenges. It also offers opportunities. But that assumes the folks in charge stop denying the evidence accumulating before their eyes.

Maybe that's taking place--belatedly. Unfortunately, it's always the rank-and-file that ultimately pays the price for the mistakes of muddle-headed management.

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