Wednesday, March 21, 2007

NY Times Domino Effect

New York Times (NYSE:NYT) issued its Feb numbers. The report reads like a requiem for the economy. Everything is down except electronic media. All national advertising categories were down except for books, booze and international fashion. The only retail categories that registered gains were fine art and department store ads. Classified ads tanked because real estate, cars and help wanted ads were off dramatically. No word on how well the personals section was doing.

Internet revenues grew dramatically. NY Times should be proud but will these properties grow quickly enough to offset traditional print media problems? Probably not. But they are showing enough promise to create strategic value and attract the attention on non traditional media. The strategic alliance with Monster (NasdaqGS:MNST) has been noticed.

The current market cap is approximately $3.43 Billion. There is a small increase in the holdings of approximately 292 institutional shareholders.

Shareholder activists are starting to demand change. The current price tag of $3.43 Billion seems cheap. Google (Nasdaq:GS) has the cash on hand to buy it out at a healthy premium. So does Microsoft (Nasdaq:MSFT).

If Google wants to dominate classified ads and leverage their outreach to local papers this would be a great acquisition. Traditional print media may question the “Do no evil” mantra if this were to come into being.

If Microsoft wants to stop Google this would be a great acquisition. They have a more enhanced news and information platform. Microsoft certainly has the cash.

If Yahoo (NasdaqGS:YHOO) wants to stay in the game they would need to buy the asset the most. But they would need to finance or do a partial share deal.

Yahoo needs to do the deal the most. This acquisition would vault it to top drawer status rather than the struggling almost ran status it has now.

In any event Monster may be side swiped with its strategic alliance as it becomes a bit player with an easily replaced business model.