Revenue from jobs site CareerBuilder, ad services division PointRoll, and other digital subsidiaries totaled $77.6 million -- 4.7% of the $1.64 billion in operating revenue during the period. That's way up from $17.2 million a year ago, although it remains just a tiny fraction of Gannett's overall operations -- underlining the challenge ahead, given digital's importance in the future.
In a fresh comment, a reader says: "It's only sort of correct that digital division revenue is 4.7% -- Q3 only included 1 month of CareerBuilder revenue. By Q4 the division will be 11% or more of GCI revenue. Chief Financial Officer Gracia Martore said:
'Revenue in the digital segment was about $78 million this quarter .... On a pro forma basis, assuming we owned CareerBuilder and Shop Local for the entire third quarter in 2008, digital revenue would have been in the range of $175 million to $185 million ...'"
Bye-bye, monthly statsThe digital breakout came in lieu of the familiar monthly statistical report, which Gannett said today it had discontinued, citing big fluctuations in digital revenue. Yet, media stock analysts told Corporate in an earnings teleconference that they still wanted the monthly report. "You guys don’t stop printing a newspaper when the news is really bad,'' said Craig Huber of Barclays Capital. "Why is this being stopped now? I mean, you guys have been doing this for well over 15 years."
Chief Financial Officer Gracia Martore rushed to correct that impression, however, saying the report wasn't significant because GCI isn't run on a month-to-month basis. Still, sensing dissatisfaction on the conference call, she suggested the report could return. "At a point, we may re-institute it,'' she said. (Conference transcript.)
It sure seems like an odd move. The trend among publicly traded companies like Gannett has been toward more disclosure, more "transparency.'' Discontinuing the monthly report now, when there's so much uncertainty, only sows suspicions about ulterior motives. "This is like the very worst time you could possibly pull it,'' Huber said.
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only one analyst asked for the continuation of the report.
ReplyDeleteActually two analysts asked for it to continue. And one of those analysts brought up the issue because he said his email inbox had a number of responses regarding the issue. So in effect one analyst was speaking for a number of investors.
ReplyDeleteAt this point, Gracia would prefer issuing revenue reports once a decade.
ReplyDeleteThere is a digital future, no doubt about that. But it is not the only future, and that is where the company is going horribly wrong.
ReplyDeleteThe business model of newspapers was based on owning the prinint press. The business model for digital isn't the same, because everyone owns the printing press.
Should we continue to try to develop the niftiest, most convenient and advertiser-friendly digital products we can? Of course.
But setting up peer-to-peer websites and discussion groups and support communities can only go so far.
Content remains the coin of the realm, and the sooner we begin devoting resources to gathering, creating and yes, distributing original and compelling content, content that MATTERS, the sooner investors and society will begin to treat Gannett as an important community asset, and not a dying institution.
The New York Times is struggling just like we are. But does anyone think it is really in trouble, or in any way going away? No, because the NYT's content matters -- to opinion leaders and to the culture. People will support the NYT somehow, even if they have to raise prices, become a niche product or decide on a new distribution model.
Gannett can be that, too. To its communities, to its readers and to the culture by becoming a hard-nosed news source. Especially with AP self-destructing, having a chain of community newspapers, and a national platform like USA TODAY could go a long way if we'd realize that and act like an adult communications company instead of chasing moms and high school football as if that is the answer.
The vibes we are sending out are fearful and our solutions are silly. The core of the company -- news and information you can use -- remains our greatest asset. Let's invest there.
What if we announced we are setting up the nation's strongest news bureau to cover the new administration and Congress. Linked with and supplemented by our news bureaus in almost every state and a reader network second to none.
What if we bolstered our business coverage of Wall Street and personal finance, becoming a trusted source for boomers, retirees, young investors and middle managers.
What if we adopted the military and returning veterans as a vital coverage area, become a source that huge hidden community could trust and interact with.
What if we invested in things like that instead of digital niceties which only take our eye off the ball, which is news and information.
What if we became a news and information company again, and announced it loudly and proudly? We might be surprised.
2:15 PM: What a smart post. I totally agree. But I don't think it will happen, because it's just not in Gannett's DNA.
ReplyDeleteYou would think digital is bringing in the bulk of the revenue where I work, at USAT, because of the way upper management has gutted the print operation in certain departments and given the digital people full authority to torch anything print related, from proven workflows to schedules. Digital was a small operation prior to the merger. I am not sure what qualifies them to set broad policies. It's clear their way of doing things is very loose and not conducive to running a large operation. I think digital folks are obviously good with technology and have other useful skills, but they seem to be clueless on a host of other things that help keep the trains running. If the merger didn't turn into a takeover, we might have been able to coexist. But with the way it's gone down, there are going to be some hard feelings for a very long time.
ReplyDeleteKeep in mind, I believe this revenue is for just the pure-digital departments and does not include publishing-led digital efforts.
ReplyDeleteCould be wrong there, but I haven't seen any mention of newspaper website ad revenue in regard to these numbers.
I just keep wondering why two affiliates, one print and one digital, instead of Gannett proper are named in the CareerBuilder deal.
ReplyDeleteyes 2:15, that is smart and 2:25 you are so right and, alas, that is why Gannett is where it is today.
ReplyDeleteJim, it's only sort of correct that digital division revenue is 4.7% -- Q3 only included 1 month of CareerBuilder revenue. By Q4 the division will be 11% or more of GCI revenue. Gracia said:
ReplyDelete"Revenue in the digital segment was about $78 million this quarter. ... On a pro forma basis, assuming we owned CareerBuilder and Shop Local for the entire third quarter in 2008, digital revenue would have been in the range of $175 million to $185 million ..."