Posted on 05/30/2008 10:50:16 AM PDT by abb
Viacom Inc.'s stock hit a 52-week low Thursday -- adding to the previous day's slide -- after President and Chief Executive Philippe Dauman said second-quarter advertising growth will be slower than originally expected, at a conference on Wednesday.
Viacom shares dropped 4 percent on Wednesday after Dauman's remarks. On Thursday, they lost an additional 94 cents to $35.79, after hitting a 52-week low of $35.78 during the session. The stock has fluctuated between $36 and $45.03 during the past 52 weeks.
At a Sanford Bernstein conference, Dauman said the company now expects second-quarter domestic ad sales growth in the 3 percent to 4 percent range, which is comparable to the second quarter of last year.
In early May, the company predicted that second-quarter domestic ad sales would be closer to the 7 percent growth in the first quarter.
Dauman said the company is experiencing advertising softness in certain categories and cited automotive advertising as an example of weakness.
Analysts were mixed about the implications of the reduced forecast.
"Viacom appears less immune than expected from the weak U.S. ad environment and realistically the ad results acceleration story for Viacom may be over as the economic environment appears to be overwhelming Viacom's ratings strength," said Wachovia Capital Markets analyst Jeff Wlodarczak.
Still, Wlodarczak, who rates the shares "Outperform," said the stock is cheap for long-term investors.
Deutsche Bank analyst Doug Mitchelson said the reduced forecast was a "sharp and surprising revision." He said either Viacom is overreacting to a temporary slowdown or "this is the tip of the iceberg and Viacom is just seeing it first."
Mitchelson said he will look for visibility on ad sales for June before drawing conclusions about a looming ad recession. He rates Viacom's stock "Buy."
Lehman Brothers analyst Anthony DiClemente, who rates Viacom shares "Equal Weight," said the announcement is "not the end of the world." DiClemente also said Viacom's share price weakness may present a medium-term entry point for investors.
DiClemente cited the strong performances of "Iron Man" and "Indiana Jones and the Kingdom of the Crystal Skull" among his reasons for optimism. He said the Rock Band video game is also expected to begin contributing more to earnings.
"Network evening newscasts will go dark after the '08 elections and their news divisions disbanded."
ping
Layoffs Under Way at Ottaway Newspapers
By Mark Fitzgerald
Published: May 30, 2008 10:41 AM ET
CHICAGO Ottaway Newspapers is laying off an unspecified number of workers in a reduction of force that will amount to less than 5% of the community newspaper publisher’s workforce.
Ottaway CEO John Wilcox said the reductions are not related to the coming sale of the chain, which was put on the market after Rupert Murdoch’s News Corp. bought its parent, Dow Jones & Co.
The first reported layoffs came at the SouthCoast Media Group papers in New England, where five full-time and nine part-time employees were let go, according to an account on the southcoasttoday Web site by Steve De Costa.
The largest cut came in the newsroom of The Standard-Times in Bedford, Mass., where three full-time and three part-time employees were let go.
Three newsroom employees and eight other staffers were let go Thursday at the Mail Tribune in Medford, Ore., and The Ashland (Ore.) Daily Tidings, Greg Stiles reported in the Mail Tribune.
Wilcox said the chain had left positions opens and cut other expenses, but had to make the cuts at its eight media groups and corporate headquarters in Campbell Hall, N.Y.
“Newspaper companies across the country have been making adjustments to their workforce, seeking ways to become more efficient. Despite the dominance of our media groups in print and Internet in their markets, increased competition and changing economic conditions affect our ability to meet our goals,” Wilcox said.
Ottaway publishes eight daily and 14 weekly newspapers in seven states.
Mark Fitzgerald (mfitzgerald@editorandpublisher.com) is E&P’s editor-at-large.
Links referenced within this article
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It seems that the only company that is making money on advertising these days is Google.
It makes you wonder if they are telling the truth.
http://www.app.com/apps/pbcs.dll/article?AID=/20080529/NEWS/80529070
Gannett cuts 55 positions in N.J.
GANNETT NEW JERSEY
Gannett Co. Inc. eliminated 55 positions Thursday at four of its six newspapers in New Jersey due to continuing adverse business conditions.
The positions were eliminated at the Asbury Park Press, the Home News Tribune in East Brunswick, the Courier News in Bridgewater and the Daily Record in Parsippany
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http://www.slate.com/id/2192382/pagenum/all/
Michael Crichton, Vindicated
His 1993 prediction of mass-media extinction now looks on target.
By Jack Shafer
Posted Thursday, May 29, 2008, at 6:55 PM ET
In 1993, novelist Michael Crichton riled the news business with a Wired magazine essay titled “Mediasaurus,” in which he prophesied the death of the mass media—specifically the New York Times and the commercial networks. “Vanished, without a trace,” he wrote.
The mediasaurs had about a decade to live, he wrote, before technological advances—”artificial intelligence agents roaming the databases, downloading stuff I am interested in, and assembling for me a front page”—swept them under. Shedding no tears, Crichton wrote that the shoddy mass media deserved its deadly fate.
“[T]he American media produce a product of very poor quality,” he lectured. “Its information is not reliable, it has too much chrome and glitz, its doors rattle, it breaks down almost immediately, and it’s sold without warranty. It’s flashy but it’s basically junk.”
Had Crichton’s prediction been on track, by 2002 the New York Times should have been half-fossilized. But the newspaper’s vital signs were so positive that its parent company commissioned a 1,046-foot Modernist tower, which now stands in Midtown Manhattan. Other trends predicted by Crichton in 1993 hadn’t materialized in 2002, either. Customized news turned out to be harder to create than hypothesize; news consumers weren’t switching to unfiltered sources such as C-SPAN; and the mainstream media weren’t on anyone’s endangered species list.
When I interviewed Crichton in 2002 about his failed predictions for Slate, he was anything but defensive.
“I assume that nobody can predict the future well. But in this particular case, I doubt I’m wrong; it’s just too early,” Crichton said via e-mail.
As we pass his prediction’s 15-year anniversary, I’ve got to declare advantage Crichton. Rot afflicts the newspaper industry, which is shedding staff, circulation, and revenues. It’s gotten so bad in newspaperville that some people want Google to buy the Times and run it as a charity! Evening news viewership continues to evaporate, and while the mass media aren’t going extinct tomorrow, Crichton’s original observations about the media future now ring more true than false. Ask any journalist.
snip
http://www.forbes.com/technology/forbes/2008/0616/050.html
GooTube
Quentin Hardy and Evan Hessel 06.16.08, 12:00 AM ET
Google is turning YouTube into its own kind of data gold mine. So what if a few founding employees wind up in the dust?
Google drew sneers when it paid $1.65 billion for YouTube in November 2006. Only 63 people worked at this little video distributor in San Bruno, Calif. It had minimal revenue but more clips, bigger buzz and a better user experience than Google.
Sneer no more. YouTube is bigger than ever. The Google people are taking over the place, and they’ve found the buttons on the cash register—vindication for YouTube’s original crew, especially founders Chad Hurley and Steve Chen. Or, rather, partial vindication, since the original managers have been largely replaced by Google apparatchiks.
The three-year-old YouTube site probably crossed a billion views per day worldwide a few months ago, exceeding even the lofty expectations by Google when it made the acquisition. (YouTube will only confirm it does hundreds of millions of views per day.) Thirty-eight percent of the video streamed on the Web now comes from YouTube, according to ComScore. No other player has more than 4%. Google owns the biggest television station on the planet. It will upload 600 years’ worth of video this year.
“A studio declining to do business with YouTube would be like a cereal maker not dealing with Wal-Mart,” says Bobby Tulsiani, a JupiterResearch analyst.
Google doesn’t share numbers, but it appears that YouTube will generate $200 million this year and maybe $350 million the next. It’s a mere 1% of Google’s sales, but up from a minuscule amount last year. In YouTube’s early days the main objective was to get eyeballs. Now it’s to get ads. Web video ad spending will climb from $775 million last year to $1.35 billion this year, estimates Emarketer.
snip
http://publications.mediapost.com/index.cfm?fuseaction=Articles.showArticleHomePage&art_aid=83688
Report: Recession Fuels 50% Gain For Local Online Advertising
by Mark Walsh, Friday, May 30, 2008 7:00 AM ET
Local Internet advertising is expected to increase 50% in 2008 to $13.1 billion as small and medium businesses facing a faltering economy turn to less expensive options for reaching consumers, according to a new study.
Rather than buying media packages that bundle online with traditional outlets such as print and broadcast, the 2008 Borrell Associates report on local Web site revenue found that local advertisers are increasingly shifting dollars to the Internet only.
“What happens in a recession is advertisers are forced to make more economical decisions about how to spend marketing dollars,” said Gordon Borrell, CEO of the local media research firm. “And the Internet, as they’ve tested it over the last several years, is cheaper and seems to work.”
While Borrell forecasts local online ad spending will grow another 40% to $18.2 billion in 2009, the category will gradually slow down and level off at about $23 billion by 2012. Growth over the next four years will average about 15%. Market research firm eMarketer projects that overall online ad spending will increase 23% to $25.9 billion this year.
That current boom has especially benefited Internet-focused players such as Google, Yahoo, Realtor.com Yelp and Local.com, with much of the growth driven by search campaigns and other direct marketing efforts online.
Overall, stand-alone Internet companies accounted for 57.3% of local online ad dollars, followed by newspapers (24.6%), directories (7.8%) and TV stations (6.9%).
The online versions of local Yellow Pages directories have also made gains even as advertisers continue to abandon print listings. Revenue for Interactive Yellow Pages (IYP) is expected to hit $1.2 billion this year, up more than 20% from 2007.
Despite a host of emerging challengers online, the Borrell report credits Yellow Pages publishers with successfully expanding onto the Web while protecting their core customer base. The three traditional local media companies with the highest proportion of online revenues are all directory publishers—AT&T Yellow Pages, Yellow Pages Group (Canada) and Idearc (Yellow Pages)—at 10.7% to 9.1%.
Pricing help explain the exodus online. The Borrell study estimates Internet CPMs at $3.65—lowest of all media—compared to $9.29 for Yellow Pages print ads.
“Unfortunately, they’re contributing to the erosion of the print product, but if they don’t do it, somebody else will,” Borrell said. The online gains won’t be enough to offset the nearly 40% drop projected for Yellow Pages print revenue in the next four years.
Newspapers likewise are targeting the Web even as their share of local online ad spending has dwindled to 24.6% from 44.1% in the last four years. Newspapers sites pulled in more than $2 billion in 2007, surpassing all local online media companies combined.
For the first time, large newspaper sites drew more than half their revenue from non-print advertisers, suggesting the online operations are building a broader base of customers from which to generate new income streams.
The Borrell report also found almost all newspaper sites are also operating at a profit. One company surveyed, for example—with $400 million in total revenue—was generating $11 million in online sales at a 65% profit.
With local TV stations doubling their Internet-only sales forces in 2007, the firm expects their online ad sales to exceed $1 billion this year. TV Web revenues increased 72% in 2007 to $772 million, with the average for large market stations passing the $1 million mark for the first time.
Borrell also projects strong ad growth this year for local radio station sites to $255 million from $189 million. Even so, radio accounts for less than 1% of the local online ad market.
Mark Walsh can be reached at walsh@mediapost.com
Three potential buyers for Blethen’s Maine newspapers
The search for a buyer of the Seattle Times Co.’s Blethen Maine Newspapers chain of three dailies has narrowed to three possible purchasers, but the only organization to openly declare its interest says it won’t be in that group.
By Bill Richards
Posted on May 30, 2008. Printed on May 30, 2008.
http://www.crosscut.com/seattle-newspapers/14649/
The search for a buyer of the Seattle Times Co.’s Blethen Maine Newspapers chain of three dailies has narrowed to three possible purchasers, but the only organization to openly declare its interest says it won’t be in that group.
C.J. Betit, administrative officer for the Portland, Maine, Newspaper Guild, which represents workers at the Portland Press-Herald and Sunday Maine Telegram, the Kennebec Journal in Augusta, and the Morning Sentinel in Waterville, said the union has shelved a plan to bid for the chain.
Betit’s union is the only prospect to formally declare an interest in purchasing the papers. It hired a negotiator and had been talking with prospective backers. Betit said about a half-dozen groups had indicated they might be willing to discuss backing the union’s bid before the union declined to sign a non-disclosure agreement that Blethen Maine requires for access to financial information. Negotiations were called off, Betit said.
“But if the deal falls through,” the union official said, “we might be willing to go back at a later time and look at it.”
A Seattle Times Co. spokeswoman did not reply to requests for comment.
Charles Cochrane, president and chief executive of the Blethen Maine chain, told union officials at a meeting last week that the roster of potential buyers willing to sign the non-disclosure agreement and bid within the price range set by the Times Co. had narrowed to three.
Betit said Cochrane did not disclose the identity of the potential bidders, nor did he say what price range the Times Co. was seeking for the chain.
Citing financial pressures, Seattle Times Co. Chief Executive Frank Blethen, whose Seattle-area family controls the company, announced plans in March to sell the Maine chain, which includes a Web site, as part of a cost-cutting drive. The Times co. bought the Maine papers in 1998. The company won’t say what it paid for the chain, but internal Times Co. records indicate it borrowed $230 million for the purchase.
Like other newspaper companies, the Seattle Times Co. has been struggling as readers and ad revenue move from print papers to the Internet. Blethen has said the flagship Seattle Times expects print revenue to drop by some $33 million during 2007 and 2008. The Seattle-based company cut the staff of the Times by 7 percent, or 125 employees, earlier this month.
The Maine papers are also having problems. According to memos circulated to the three papers’ staffs, print revenue at the Portland Press Herald, the largest paper, fell 22 percent in March from a year ago and 19 percent in April from a year ago.
Blethen told the Press Herald in March that he hoped a local buyer from Maine would step forward. He said he was hoping the sale would enable the Times Co. to recoup half the price it paid in 1998.
To date, about 10 potential buyers have examined the chain’s financials. Several of those prospects told Crosscut that their primary interest was in the company’s real estate holdings, and they later decided not to bid.
One possible bidder, according to several Maine sources familiar with the sale negotiations, is Black Press, Canada’s largest privately held newspaper company. The Victoria, B.C., chain owns more than 100 newspapers in Canada and the U.S., including about 20 in the Puget Sound area.
David Black, the company’s owner and president, declined to comment on any bid for the Maine chain. “If one is going down that road, and I’m not saying we are, you sign a non-disclosure agreement that prohibits talking about this sort of thing,” Black said.
Meanwhile, Betit’s union could toss a monkey wrench into the Times Co.’s efforts to sell the Blethen Maine papers to anyone else. Union officials say their contracts apply to anyone purchasing the chain. In a May 21 letter to the union, Maryann Kelly, Blethen Maine’s director of labor relations, said the union’s position “is completely without merit” and demanded an immediate arbitration of the matter.
“Resolution (of the disagreement) will allow the publisher to determine whether a sale is possible,” Kelly’s letter says.
Betit said his union rejected any speeded arbitration.
Forbes seems to be doing very well Every other page is an ad and there are several continuous multiple page ad spreads.
The conservative view sells ads.
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