This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Web May Not Save Newspaper Stocks

Editor's note: This column by Steve Birenberg is a special bonus for and RealMoney readers. It first appeared on Street Insight on June 18 at 8:48 a.m. EDT.

Last week, while I was telling you to use the recent strength in New York Times (NYT) and E.W. Scripps (SSP) to reduce positions, my good buddy Cody Willard was telling RealMoney subscribers that both stocks were buys . Cody's thesis is that creators of quality content can monetize the Web and other new forms of digital distribution, such as video on demand.

I believe that Cody has a point, but I believe that the ease of creating quality content and putting it on the Web undercuts the strength of even the greatest brands. As a result, there is not enough market share at decent pricing to compensate for the loss of revenue momentum and operating profit margin on the content in its traditional form.

This problem is particularly acute for shareholders, because the deterioration in traditional businesses is occurring more rapidly than even successful efforts in new digital distribution channels.

Thorns in Scripps' Side

SSP faces additional questions regarding its Interactive segment, which houses Web-only businesses it has acquired in recent years: Shopzilla and uSwitch. Both companies are in the comparison-shopping business, and each has dramatically underperformed expectations in the last several quarters.

In fact, SSP's interactive segment is forecast to show just 3% revenue growth, while earnings before interest, taxes, depreciation and amortization (EBITDA) falls by 53%. Analysts expect revenue to accelerate to 21% in 2008, with EBITDA rebounding by 72%, but that would still leave EBITDA in 2008 below the level of 2006.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs