NEWSPAPER PROFITS AND ONLINE ADVERTISING

Two relevant quotes from a web exclusive of Jessica Ramirez in Newsweek:

PROFITS

"Newspaper profitability remains high.

Cash-flow margins—a good measure of the self-financing capabilities and profitability of a business—are still high.

The New York Times Co., which posted a 3.5 percent slump in circulation, had a 15 percent margin last year, according to JPMorgan Chase; The Tribune Co., which owns the L.A. Times, had 20 percent across its various papers, and Knight Ridder, which was sold to McClatchy Co. earlier this year, had a 2005 margin of 19.9 percent.

Those margins are higher than those of many big Fortune 500 firms, including IBM.

“I think there’s this perception that the industry is somehow losing money,” says John Kimball, chief marketing officer at the Newspaper Association of America.

“Believe me, we are not losing money.”

ONLINE ADVERTISING

"JPMorgan analyst Fred Searby notes that online ad revenue, while growing, only represents an average of 6 percent of total ad sales."