The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK (

TheStreet

) --

The New York Times Company

(NYT) - Get Report

needs to show robust growth in its digital subscriptions to reassure its investors.

Since the company lowered its third quarter 2011 guidance, its stock has slid from above $7 to below $6 in just under a week. The NYT competes with publications like the Wall Street Journal owned by embattled

News Corp

(NWS) - Get Report

as well as Internet-based outlets like

Yahoo!

(YHOO)

,

Google

(GOOG) - Get Report

and

AOL

(AOL)

.

We currently have a

price estimate of $9 for NYT's stock

, which is well above the current market price.

NYT's ad revenue has been projected to decline by 8% next quarter according to the company's management, which is much higher than the low-single digit decline expected earlier. The revenue decline might be arising from a multitude of factors, namely increasing competition from display advertising giants such as Facebook and Google, as well as gloomy economic environment affecting the online advertising industry as a whole.

Nevertheless, the company should continue to place its bet on its digital subscription initiative launched in March this year. NYT has built a strong reputation of providing quality journalism and content, which should keep user stickiness high and help retain the more than 220,000 digital subscribers it has acquired up to July.

While management has kept mum on any recent updates on the digital subscription front, it would not hurt NYT to release some fresh figures on their paid subscriber count (which are expected to have increased since July) to pacify its investors.

See our full analysis and $9 price estimate for NYT

here.

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This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.