Google and New York Times: One Struggles as the Other Thrives
October 14, 2011 by Douglas A. McIntyre
Google (NASDAQ: GOOG) announced monster earnings on the same day that the New York Times (NYSE: NYT) said it would cut more workers. This news shows once again how great the divide is between traditional media and search. The problem was forgotten somewhat when Google’s earnings slowed early this year and the newspaper industry began to recover. That period has ended suddenly.
Google’s GAAP net income in the third quarter of 2011 was $2.73 billion, compared to $2.17 billion in the third quarter of 2010. The world’s largest search company reported revenues of $9.72 billion in the third quarter of 2011, representing a 33% increase over third-quarter 2010 revenues of $7.29 billion. And, Google’s strength beyond search expanded as the market share of its Android mobile OS continued to grow.
The New York Times said it would cut 20 people from its newsroom and more employees in other parts of the company. The firm’s digital advertising rose a disappointing 2.6% in the second quarter, which did not offset a 6.4% decline in print ad revenue. The company should have shown a better improvement in ad revenue because it owns some of the largest premium content websites in the country. Instead, the troubles of 2008 and 2009 have returned. Digital revenue cannot much help the deterioration of print sales.
Google’s results once again raise the contrast between the online industry’s haves and have nots. Online portals now have sales that barely grow. Premium sites like TheStreet.com (NASDAQ: TST) struggle to improve revenue as well. But Facebook has a quarter of all display ad revenue in the U.S. Google has two-thirds of the search market.
There is nothing particularly new about the Google and NYT results. But they are a reminder that part of the online industry has begun to die again — and this time there is no reversing it.
Douglas A. McIntyre
Essential Tips for Investing: Sponsored
A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.