Bad News Piles Up for New York Times

With News Corp. (NWS Quote) poised to swallow Dow Jones (DJ Quote), New York Times (NYT Quote) looks vulnerable on the eve of what could be the last great newspaper war in New York City.

Shares of the Gray Lady hit 10-year lows Wednesday after a Wall Street analyst downgraded the stock to a sell, citing the potential for a recession to weigh on advertising from luxury goods retailers, which make up 28% of the company's national advertising revenue.

In another sign of weakness, a memo to staff members at the company's flagship newspaper said the publication is cutting newsroom jobs amid a hiring freeze. This at a time when its chief rival, The Wall Street Journal, is hiring as its publisher prepares to duck under the News Corp. umbrella.

News Corp. CEO Rupert Murdoch, who struck a deal to acquire The Journal's publisher this year, has said he plans to beef up its political coverage, signaling that the right-wing media mogul, who makes no secret of his disdain for the Times and its perceived liberal bias, is hell-bent on burying the Gray Lady on her own turf.

Murdoch also has said he likely will eliminate subscription fees from The Journal's Web site, suggesting that he wants to tap global audiences beyond the Wall Street-oriented investment crowd that is happy to pay for the newspaper's high-brow reporting.

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