The Gray Lady's Bones Are Showing

This is almost like watching a slow starvation. New York Times' (NYSE: NYT) advertising revenue, already on a steady slide for years, fell another 3.2% in August.

The bad news is nothing new. Let's glance through the negatives, shall we?

• The News Media Group -- the newspapers -- saw revenue drop by 4.6% in a single month.
• All-important classified revenue plummeted 20% in the month, as weakness in real estate, help-wanted, and automobile ads took its toll.
• The hardest-hit entities were the New England Media Group, where ad revenue fell by 9% and the Regional Media Group, whose ad sales dropped by 11.9%. The New York Times Media Group was essentially flat, with a 0.2% increase.

There were still a few bright spots:

• Internet ad revenue grew by 28.2%.
• About.com checked in with ad sales up 27.4%.

But my Foolish friends know that, while the latter two percentages are impressive, the absolute amounts involved are dwarfed by those in the sinking traditional newspaper operations.

Times joins other publishers such as Gannett (NYSE: GCI), McClatchy (NYSE: MNI), and  Tribune (NYSE: TRB) in recording virtually unbroken strings of ad-revenue declines. As a result, Times' share price -- which seemed stable in the mid-$20s -- began sliding again this summer, closing yesterday at $20.24. In a little more than three years, shares have shed half their value.

There were more reasons why August turned out to be a downer for Times. Late in the month, Moody's Investors Service cut its rating outlook on the company from "stable" to "negative." The credit rating company cited -- no surprises here -- increased pressure on Times' advertising revenue.

As this journalistic institution steadily decays, it's hard for me to imagine the changes Times will have to make in the next five years to remain viable. I can't envision a Rupert Murdoch springing forth with an attractive offer for the company, as was the case at Dow Jones (NYSE: DJ).

Obviously, the company needs some sort of tourniquet to stem its bleeding, and soon. In the meantime I can only imagine what Times chairman Arthur Sulzberger, Jr., and CEO Janet Robinson would give for just one month of positive numbers.

For related Foolishness:

• Gray Lady May See Colorful Meeting
• Dueling Fools: New York Times Bull
• Here Comes "Times Reader"