Advertising revenues for the quarter remained flat compared to the same quarter last year, though the glimmer of hope was a 1.4% increase in December.
If Knight Ridder needs a little help, it seems it will come in the form of help-wanted advertising. Despite an economy that only added 1,000 jobs in December (note: Reuters reported today that the Labor Department's data may have understated job growth), the upward creep of Knight Ridder's December ad revenues represents a ray of hope.
Newspapers tell us about the world we live in, so it seems a strange irony that they have borne the brunt of the lackluster economy. Advertisers' marketing budgets were slashed and hiring was anemic, as compared to those help-wanted tomes stuffed into the Sunday editions in 1999 or 2000. Even the war in Iraq -- a great driver for consuming news -- cut down on travel-related advertising, as Fool LouAnn Lofton observed early last year.
Add to that a different kind of news consumer, changed by the advent of the Internet. Many people have fired the paperboy to flee to mostly free, real-time sources; meanwhile, both the print versions and their online counterparts largely depend on advertising bucks.
Other companies that face the same environment include Dow Jones
There are several key factors, in addition to the critical job market. Think real estate (higher interest rates would equal less advertising); the popularity of new cars; retail (more people employed means more shoppers, of course); and events that would have a positive impact on national newspapers, such as the Olympics and the presidential election advertising.
Regardless, the extent to which the overall economy heats up will have a direct correlation to ad revenues, and that's anybody's guess. Is Knight Ridder going to be on top of the news this year? Keep an eye on the economy.
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