Free Fall on Eighth Avenue

The New York Times Company's advertising revenue fell 27 percent in the first quarter. The company lost $74.5 million dollars. NYT Co. is blaming most of the troubles on the perpetually underperforming Boston Globe. The company's overall ad revenue dropped by $124 million year over year. Internet advertising was not immune, declining 8 percent to just over $40 million.

Once again, we see evidence that newspapers' pain is nowhere near letting up. We also see more evidence that internet advertising is not going to come to the rescue of ailing media companies. On the contrary, it's becoming clear that a gross oversupply of ad inventory on the web has the potential to drag down revenues for all advertising-dependent traditional media companies for years to come.

Local papers will have the best chance of surviving going forward. The key will be to build a large network of local web sites and sell ads across the network (a la Google); in essence, to be the dominant player in each local advertising market. It's anybody's guess how a national paper like the Times will be able to survive in its current form if print continues to bleed.