Documents: papers' online revenue growth slowing

[Trending down: online newspaper revenue growth]

It's certainly good news that Gannett's online newspaper revenue rose 5% in the second quarter from a year ago -- even as the overall newspaper industry saw its digital revenue fall 2.4% over the same period. After all, digital is the company's future.

But a close look at public documents shows a more unsettling trend: At 5%, GCI's most recent growth has plunged to barely a fifth the 24% growth rate reported for all of 2006. (Gannett didn't publish such annual data for 2007, saying only that "solid online revenue growth was also achieved.")

Indeed, growth rates have been trending down for quite some time, as the table shows, above. To be sure, these comparisons aren't apples-to-apples. Chief Financial Officer Gracia Martore apparently switched to reporting combined data for all newspapers -- including the 17 Newsquest dailies -- rather than separating British and domestic, the standard through last year's third quarter. That switch started with this year's first-quarter financial report.

Without those Newsquest titles, Gannett's quarterly growth rate might have been smaller -- or perhaps experienced the same industry-wide loss. Here's why: The last time GCI broke out U.K. and domestic newspapers, in 2007's third-quarter report, Newsquest's rate was four times bigger than domestic -- 46% vs. 11%. If that trend continued through this year's second quarter, the U.K. operations may have masked problems in the U.S.

[Data: forms 10-Q and 10-K, Gannett investor relations; image: one of today's Newsquest dailies, the Southern Daily Echo, Newseum]