24/7 Wall St.

Advertising revenue at The New York Times Company (NYT) fell a significant 8.5% in May to $157.3 milllion. At the flagship New York Times Media Group, it dropped 9.1%. At the New England Media Group, which includes the Boston Globe, it was off 8.8%. And, at the Regional Media Group it fell 14%.

Advertising revenue at the internet sites for the three groups rose 21.4%, and, since these number are included in the overall figure, it is clear that print advertising was off well over the 8.5% total revenue drop.

Revenue at the company’s small About.com internet operation was up 32.6%. It is somewhat amazing that the About.com revenue grew faster than the figure for the online newspapers because in May 2007, The New York Times Company had the 11th largest presence on the Web, with 43.8 million unique visitors in the United States according to Nielsen//NetRatings, up approximately 11% from 39.3 million unique visitors in May 2006.

With an 11% increase in audience, ad online advertising should have been up more.

Douglas A. McIntyre

Barron’s has pointed out that Wall St. is becoming increasingly concerned about the high expectations for the Apple (AAPL) iPhone. One analyst from JP Morgan point to issues of iPod cannibalization if iPhones are not available in great supply and the very high price of the cell service plans that AT&T (T) is adding to the price of the phone.

That should be enough trouble, but several of the world’s largest handset companies have set up a flat fee music service to challenge the spread of the iPhone to Europe and Asia. There is little reason to believe that the operation could not be moved to the US as well.

According to the FT, the new service will be called MusicStation and will be pre-installed on handsets. The group supporting the service includes the four largest handset companies in the world: Nokia (NOK), Motorola (MOT), Samsung, and Sony Ericsson. To add to the fire power of the start-up, content will come from the world’s largest music publishers: Warner Music Group (WMG), EMI, BMG, and Univeral Music Group. The FT writes that "it is estimated that 100 million MusicStation-enabled handsets will be sold over the next 12 months, dwarfing the 10 million iPhone handsets Apple aims to ship in the next year."

With Apple’s shares up 110% this year, and sitting near an all-time high, a misstep with the iPhone could take the stock down a very long way.

Up until now, the iPhone had competition in theory. But, the reality of the industry’s determination to keep Apple out of the market has suddenly come in like a lion.

Douglas A. McIntyre can be reached at douglasamcintyre@247wallst.com. He does not own securities in companies that he writes about.

The Wall Street Journal writes this morning that GM (GM), Ford (F) and Chrysler will seek huge concessions from the UAW this Fall. They claim a disadvantage of about $30 an hour compared to their Asian competitors due to pension, health care, and other labor costs.

The UAW has already sacrificed 70,000 jobs to the car industry’s restructuring and it may be unwilling to go much beyond that. The conventional wisdom is that the union has to give further because if any of the Big Three is forced into Chapter 11, the job loss will be catastrophic.

But, the conventional wisdom is often wrong. Ford recently raised $23 billion. Its market share may be dropping but its balance sheet is in reasonable shape and it is in the process of selling Jaguar and Range Rover. That could add several billions more to its war chest. Chrysler is being sold to hedge fund Cerberus. The financial firm has said it will not seek labor cuts beyond those that Daimler has already scheduled. And, the UAW may look at Cerberus as a financially sound owner, as it should.

GM claims that its restructuring is already on the road to success. It has cut about $9 billion in annual costs and is doing well overseas in countries like China.

The UAW may fairly ask why Detroit has designed cars that the market does not want. Drops in the US share of domestic car companies is not a labor problem, it is a product management problem. But, to some extent, the UAW is being asked to pay a price for that in upcoming negotiations.

If the UAW is smart, the will come to the bargaining table with one message. We did not get you into the mess and we will not suffer to get you out. The Big Three agreed to past labor contracts when they saw restructuring all around them in industries from newspapers to steel. The cost of labor in those segments of the economy dropped over two decades ago. And, the union can point the finger at Detroit management for failing to get the pulse of the market, building SUVs and pick-ups that sold when gas was cheap, but not creating small cars for a market that would be hit by rising oil prices over time.

If the union has to strike the industry to make its point, it may. This is a last stand, and the UAW has some moral and economic ground where it can place its feet.

Douglas A. McIntyre can be reached at douglasamcintyre@247wallst.com. He does not own securities in companies that he writes about.

Google (GOOG) planned to have a party to upstage Ebay’s (EBAY) big confab for its online payment system, Paypal. Googe runs a competing systems call CheckOut. CheckOut has not done very well, so it thought if it invited some PayPal customers to a party, they might switch.

It didn’t work out that way. Ebay, which was the largest buyer of Google Adwords in the first quarter, according to NetRatings, canceled all of its marketing on Google.

Google is learning that being in businesses beyond search is going to cost it money from time to time. It now competes with almost everyone one the internet. Google has a product search area. It sells ads there that may compete with the listings. Its calendar, documents, and spreadsheet products compete with Microsoft (MS).

Google has few natural enemies. It is too large and successful. But, through rapid expansion, it could become its own worst foe driving off customers that it now competes with.

Douglas A. McIntyre can be reached at douglasamcintyre@247wallst.com. He does not own securities in companies that he writes about