The Washington Post (NYSE: WPO) is getting shredded. The company's first-quarter earnings report, released last week, showed failures across the board. Newspaper, education, and cable TV revenues all dropped. The only gain came in the TV broadcasting division, the company's smallest business segment. The outlook for the Post is grim, and these headline numbers aren't even the worst part.

No one reads this rag
The worst news to come out of the company's filing is its horrific subscription data. The company's namesake newspaper segment lost $23 million in the quarter. This was due largely to falling ad revenue; online advertising fell 7% due to decreases in all areas of the company's online world.

Abysmal subscriber numbers made the fall in revenue possible. The company hasn't jumped into the world of online subscriptions and has suffered for it. Weekly subscriptions dropped 10%, with Sunday subscriptions falling 5%. On the plus side, newsprint costs dropped 11%, because no one is buying the paper anymore.

Companies getting it right
The New York Times' (NYSE: NYT) quarterly results made the Post's announcement look even worse. The Times grabbed more than 450,000 digital subscriptions in the first year they were offered. While advertising revenue fell, this was largely due to the impact of Google's search algorithm revision on the Times' About.com subsidiary.

If the Post wants to learn something from this experience, it can take a page from Gannett (NYSE: GCI). The USA Today publisher has announced plans to grow its digital position over the next two years. This includes a range of products for USA Today as well as new stand-alone digital marketing services, targeted at small and medium businesses. That sounds like an excellent plan.

Overpriced for under-delivery
To top it all off, the Post is trading at 18 times forward earnings. The Times and Gannet -- both of which have digital growth supporting them -- are only trading at nine and six times earnings, respectively. For what the Post is promising, it seems exceptionally overvalued.

Right now, The Washington Post is in a bad place. Even though Warren Buffett seems to like it, I'm not comfortable sinking money into a company that hasn't provided stockholders with a clear path to prosperity. If it can put a subscription model in place and ensure that the model adds value to consumers, then I think the Post could be a great place to invest. For now, I'm holding off.

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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.