Little-Known Index Offers Newspapers Ray of Hope

Last Updated Aug 22, 2008 2:37 PM EDT

More or less for fun, I decided to compare July's top ten online news sites in the U.S. by traffic with their parent companies' estimated market caps. The results are revealing.
Company Uniques (millions) Mkt Cap (billions)
  • MSNBC 37.5 $249.2
  • Yahoo News 35.2 26.6
  • CNN 33.0 25.4
  • AOL 23.1 55.5
  • NY Times 19.5 1.87
  • Tribune 16.2 1.95
  • ABC 13.5 59.7
  • Gannett 13.3 3.97
  • Fox News 11.5 35.2
  • Google News 10.8 152.5
(Sources: Editor and Publisher, Yahoo Finance, Reuters Finance)
Now, of course this not comparing apples to apples, but it is intriguing to see how much larger audiences per dollar the three newspaper companies generate than everyone else.

The newspaper sites are attracting over 6 users per dollar in market cap, while the rest attract roughly 0.25 per dollar in market cap. By what we might call the "Weir Index," therefore, the newspaper sites are 24 times more effective for their size.

Before anyone writes to complain, I acknowledge this index has absolutely no meaning in the real world. Except that it may indicate that the newspaper companies are currently undervalued by investors in light of their potential future online performance capabilities.

Meanwhile, AdWeek reports that consumers are more likely to take action after seeing ads on local newspaper sites than on any other kind of local online venue. So, all is not lost for the newspaper industry. There's a bright digital future for those companies that make the transition quickly.

  • David Weir

    David Weir is a veteran journalist who has worked at Rolling Stone, California, Mother Jones, Business 2.0, SunDance, the Stanford Social Innovation Review, MyWire, 7x7, and the Center for Investigative Reporting, which he cofounded in 1977. He’s also been a content executive at KQED, Wired Digital, Salon.com, and Excite@Home. David has published hundreds of articles and three books,including "Raising Hell: How the Center for Investigative Reporting Gets Its Story," and has been teaching journalism for more than 20 years at U.C. Berkeley, San Francisco State University, and Stanford.