Online News' Good News

It's always interesting to hear about industries in the midst of sweeping changes -- even if those changes aren't always welcome news to investors who've socked away their money in slow-growing businesses. The newspaper industry is one heck of a hot topic these days, and Tuesday, we learned some statistics that shouldn't surprise anyone: Online newspaper readership is doing rather well.

Only a few days ago, my Foolish colleague Tim Beyers wrote about the ugly signs that recently emanated from newspapers' circulation and readership figures. (The signs point back a ways, too.) Recent moves by Dow Jones' (NYSE: DJ  ) Wall Street Journal also hinted that print editions may be on their way to a far slimmer profile.

On the other hand, recent data shows that online newspapers are doing rather well. According to Nielsen/NetRatings, newspaper Web sites have shown growth of 11%, to 39.3 million visitors. The study also said that one out of every four Internet users reads a paper online. (Of course, I believe studies and surveys should always be taken with a grain of salt, but the findings are hardly implausible.)

It's also not surprising that companies whose newspapers sport a high profile or national bent did very well -- New York Times' (NYSE: NYT  ) NYTimes.com grabbed first place, with 11.4 million visitors in October, while Gannett's (NYSE: GCI  ) USAToday.com and Washington Post Co.'s (NYSE: WPO  ) WashingtonPost.com held the No. 2 and No. 3 positions in that month's readership.

The study did say that the majority of readers polled still prefer print newspapers, at 71%, and that's not surprising. However, the recent circulation drops show that a change is taking place in the way that people consume their news. As someone who left black-and-white smudged fingertips behind a long time ago in favor of online news, I can't say that I'm surprised that this shift is occurring, given the ubiquity of computing and broadband Internet access, and the allure of constantly refreshed news content.

Change is most certainly in the air, and one might imagine that someday soon, the newspaper industry will have a few clear winners. Soon, print editions may become a thing of the past, or evolve into a far different type of content than that which most of us grew up with.

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Alyce Lomaxdoes not own shares of any of the companies mentioned.


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