Media Need a Blog Strategy

Jerry Seinfeld said it best: "It's amazing that the amount of news that happens in the world every day just exactly fits in the newspaper."

The print media refuses to acknowledge the news world beyond its pages, particularly in the blogs that are dominating news today. Newspapers suddenly have begun quoting blogs with attributions like "as heard in the blogosphere." As if the universe of blogs was some distant layer of the atmosphere somewhere between the infamous ozone layer and one of the lesser-known layers of the stratosphere. But if you consider what's happening to traditional media companies and trends in readership and advertising, you'll see why I think the time has come for the old media to change its stripes.

The New York Times (NYT - commentary - Cramer's Take) reduced guidance Thursday for the quarter and year, saying: "We believe that 2005 will be another challenging year." This led me to notice that my fingers no longer stain with black when I read the news, and that spells trouble for the Times, Dow Jones (DJ - commentary - Cramer's Take), Washington Post (WPO - commentary - Cramer's Take), Tribune Co. (TRB - commentary - Cramer's Take), Gannett (GCI - commentary - Cramer's Take) and all the traditional media stocks.

It's been clear since the advent of the Internet that the media world was going to change and be dominated by the Web. The New York Times had big dreams, actively building its Web site in 1995 when the rest of the world was still wondering if the Internet was just a stomping ground for losers and geeks. (As an aside, I was working at HBO at the time, working on their interactive TV experiment in Orlando, Fla. I suggested to my boss that the Internet was something worth exploring in terms of interactive entertainment. His response was: "The Internet is for academics. These guys in the cable business know what they are doing and I think you should just trust them.")

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James Altucher is a managing partner at Formula Capital, an alternative asset management firm that runs several quantitative-based hedge funds as well as a fund of hedge funds. He is also the author of Trade Like a Hedge Fund and the upcoming Trade Like Warren Buffett. At the time of publication, neither Altucher nor his fund had a position in any of the securities mentioned in this column, although positions may change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Altucher appreciates your feedback and invites you to send it to [e-mail].

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