Money-Rx Blog

But now, the Wall Street Journal publishes an article which states that Harbinger Capital Partners Funds, a $18 billion hedge fund, holds a 4.9% stake in the New York times Co. and nominated four candidates Friday for election to the board of New York Times Co. Harbinger's nominees have "deep expertise" in capital allocation, Internet media and brand strategy....investors' main concern is the Times' allocation of capital, including whether it should continue to invest in as broad a mix of assets as it does....the Times should put more focus on expanding digital revenue...If Harbinger wins those four seats, it could intensify pressure on the company to take radical action to lift the plunging stock price, which is trading near its lowest levels in 11 years. The company's market capitalization is $2.1 billion.

And here's an excerpt from John Ellis' article from last week. The prospect of doubling up with Google offers realized value, a global platform and thus a much clearer path to future growth. Everyone would be a lot richer than they are now. Classified advertising has been gutted by Craig's List (and a thousand other web-sites). Department stores have consolidated and newspaper advertising budgets have consequently declined. The way people access information has fundamentally changed, thanks to the Internet.

The article goes on to list the various advantages both companies have with a takeover, and also lists why the New York Times does not have a future under its current direction. With all due respect to both John Ellis and the the WSJ, these NYT-in-trouble stories keep popping up in the news every few months. Nothing really happens, or is going to happen, at least not in the near future. But one day it will. Considering that the print publishing business in general, and the New York Times in particular, is being cut down to size by advertisers shifting to online mediums, the writing is clearly on the wall. It's just a question of when and by whom.

It could go in either direction - To an old media mogul like Rupert Murdoch, or to a new media giant like Google. I don't how the NYT's $410 million acquisition of About.com is working out, but it's fair to say that About.com is not the digital knight who is going to save the NYT from going under, unless Arthur Sulzberger pulls a rabbit out the hat and purchases another digital publisher to extend the NYT's reach into the digital world.