Times Co. memo reveals dip in online ad revenue

Seattle Times Publisher Frank Blethen's new mantra

for his paper's employees goes like this, according to an in-house memo circulated around the Seattle paper on Monday: "Surviveâ'ꂬ¦transformâ'ꂬ¦transitionâ'ꂬ¦thrive." Sounds kind of catchy, but so far the Times seems to be hung up on the "survive" part.

Buried deep in the memo, circulated by Seattle Times Co. President and Chief Operating Officer Carolyn Kelly, is the news that the paper's first-quarter print revenue is down 10.7% so far from the first two months of last year. The post-holiday quarter is notoriously slow for newspaper advertising, but the Times January-February numbers exceeded the 9% drop in print revenue Blethen has been predicting for all of this year. The falloff in print revenue for the entire newspaper industry last year was about 7% from 2006.

An even more ominous stat is the drop in the Times online revenue for January and February. That number was down 6.5% from the same period last year, according to Kelly's memo.

The Times, like the rest of the newspaper industry, has been banking on the continued brisk growth of its online ad numbers to head off the well-documented drop in print advertising, as readers move to the Internet — that's the "transform" part of Blethen's mantra. Times officials have pegged the paper's future on a continuation of the 30%-plus annual growth rate for online ad revenue the industry logged for a few years. But last year the growth curve for most newspapers' online ad dollars began slipping into the 20% range, and analysts predict even more slowing if advertisers continue to lag behind readers in the march from print to online news. (Editor's note: See David Carr's article in the New York Times on this issue.)

Did the disheartening news about the Times' print and online ad slump spur last week's Seattle Times Co. decision to unload its Maine newspapers? Kelly's memo doesn't say, but on Sunday, Portland Press Herald Editor Jeannine Guttman used her weekly column to describe Blethen's appearance in her paper's Maine newsroom to break the news of the decision to sell. Blethen, who is also chief executive of the Seattle Times Co., burst into tears, according to Guttman, apologizing to the staffers assembled in the sixth floor room and saying that things hadn't turned out as he had planned. Nonetheless, she said, he received a round of applause after his speech.

As for the rest of the mantra: Last December, in another staff memo, Blethen announced a transition timetable for Seattle Times Co. leadership. By 2015, he said, the Times Co. will have "a next generation of family leaders and stewards."

Still no announcement by the Times' current leadership on when the "thrive" part of the formula will happen.