Advertisers Abandon The New York Times, Further Threatening Jobs There

(MoneyWatch)  The New York Times' revenues sank 13.9 percent last month. Ad revenue fell 20.9 percent. Despite a traffic increase to its web sites, ad revenue from the web declined 3.8 percent. At sister company New England Media Group (which houses the Boston Globe et al), ad revenue tumbled 23.3 percent.

The sobering news that even the best news brand on the planet cannot yet make a decent business out of the internet has led some to suggest that NYT may be the canary in the coal mine for web advertising -- a leading indicator that spending declines will indeed come to the web, despite predictions (BNET readers are already familiar with the theory that the web and traditional ad economies have essentially uncoupled from each other in the last few months).

In terms of the ad business, the numbers seem to suggest that the recession is so bad that marketers no longer have the cash to reach NYT's massive audience, 173 million views a month, plus its paper circ.

In response, the Times has frozen wages for non-union staff and attempted to do a real estate deal to pull equity out of its massively expensive Manhattan skyscraper. Earlier this year, the Times laid off 100 of its 1300 newsroom staff.

Check out NYT's Q3 earnings statements: salary expenses (which are a significant portion of selling, general and administrative expenses) are just under half of revenues. Production costs (i.e. printing papers) are the other half. The company was only profitable because it sold its broadcasting group.

This suggests that if the Times wants to stay profitable it ought to consider laying off hundreds more of its staff. At the same time, it needs to figure out how to print less and make a greater margin on what remains.