Huge Newspaper Investor Pulls Out, Way Out!
The media industry continues its major sea change. Another traditional newspaper company, Gannett (who publish USA Today plus 84 other daily newspapers), suffered a nearly 8% drop in their stock price Tuesday, May 12.
Why? Because their single biggest investor, AXA SA (a large multinational insurance co.), sold off almost 30 million shares they held in Gannett. Fortunately for Gannett, their online version at USAToday.com has experienced a 12% year over year increase in their online traffic yielding more evidence that people are going to the internet for their news.
In my opinion, Gannett are in a rather poor position to rebound from their decline over the long term. I reviewed their daily newspapers and it appears Gannett have only three premium domains on which to build their news organization: Tallahassee.com, Cincinnati.com, and Hawaii.com (travel portal). These are obviously cream of the crop for those geographical areas.
The real trouble is that Gannett’s money losing newspapers (once their bread and butter) are not represented online with a city domain name. The online presence for each newspaper is based on the local newspaper name = bad plan!
For example, Gannett’s website for their Indianapolis newspaper is IndyStar.com. Boulevards New Media own Indianapolis.com. And PremiumDomains.US own Indianapolis.US.
Gannett’s newspaper in Detroit, Michigan is called The Detroit Free Press. Do Gannett happen to have a premium city domain name for that paper. Unfortunately, no. Boulevards New Media have Detroit.com. And PremiumDomains.US own Detroit.US.
I don’t know what Gannett’s strategy is for surviving, but it better be based on an online model. When your biggest investor dumps 30 million shares in your company, that’s the ultimate loss of confidence. And a clear signal they think you’re headed for a cliff.
Update: Gannett just announced they are completely abandoning the print edition of the Tucson Citizen newspaper (Arizona’s oldest paper), and will be going with an online only version beginning this Sunday May 17, 2009.
