Gannett (GCI)

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-	[[Image:GCI_logo.png|left‎]] Gannett ([[NYSE]]:GCI) is a media company that publishes USA Today, the nation's largest newspaper by circulation, along with 101 other daily newspapers in the US and UK. Although the company owns various Web sites and 23 television stations, newspaper advertising accounted for two-thirds of its revenue in 2007.	+	'''Gannett''' ([[NYSE]]:GCI) is a media company that publishes USA Today, the nation's largest newspaper by circulation, along with 85 other daily newspapers in the U.S.<ref name=Over/> Additionally, GCI publishes 17 daily newspapers internationally as well as more than 200 weekly newspapers in the United Kingdom, which together account for 84% of GCI's revenue.<ref name=Fin/> Apart from publishing, Gannett also earns revenue through its digital and broadcasting segments.<ref name=Over/>
-	Gannett's circulation numbers and attendant advertising revenues have been declining - a trend shared by many of the company's competitors, who are [[Impact of Internet Advertising|losing ad dollars to the internet]] and other media. Classified ads, which made up 40% of Gannett's print advertising revenues in 2007, are at particular risk from online job boards and websites such as Craigslist. Gannett's advertising revenues declined 6% from 2006 to 2007, while internet advertising grew at double digit percentage during the same period.<ref>[http://www.sec.gov/Archives/edgar/data/39899/000119312508041403/d10k.htm#toc99200_11 Gannett 2007 10-K] page 25.</ref> Additionally, GCI's print advertising decreased 22.7% during Q4 2008 because of slumping advertising demand amidst the economic downturn as well as the shift of advertisers to the [[The Internet Impact| Internet]].<ref name=aps/>	+	Gannett's circulation numbers and attendant advertising revenues have been declining - a trend shared by many of the company's competitors, who are [[Impact of Internet Advertising|losing advertising dollars to the internet]] and other media. This spells doom for Gannett's publications as 73% of GCI's publishing revenues are earned through advertising sales.<ref name=Why/> In an effort to offset these struggles with the print paper, Gannett is turning its focus to emphasizing other mediums (such as online and mobile) while de-emphasizing the print paper.<ref>[http://www.wikinvest.com/wikinvest/api.php?action=viewNews&aid=1714302&page=Stock:Gannett_(GCI)&format=html&comments=0 Wikinvest: Gannett Revamps USA Today for Web]</ref>
-	In an attempt to capitalize on internet advertising revenue, Gannett has built websites for its publications, and has acquired, built, or partnered with a number of websites. In 2006, Gannett generated over $400 million in revenue from online ad sales, nearly twice the online revenues of [[The New York Times Company (NYT)]] and [[Dow Jones (DJ)]]. However, Gannett is a much larger company, and these online sales represent only 5% of its total revenue, compared to 10% and 8% for Dow Jones and The New York Times.	+	In an attempt to capitalize on internet advertising revenue, Gannett has built websites for its publications, and has acquired, built, or partnered with a number of websites like its CareerBuilder.com. The company's online advertising revenues increased by 72% in 2008 as the company continues to expand its online presence.<ref>[http://sec.gov/Archives/edgar/data/39899/000136231009002765/c81466e10vk.htm GCI 2008 10-K, Item 1, pg. 10]</ref> However, the company's declines in traditional print and broadcasting advertising revenue contributed to GCI's 9% decrease in overall revenue during 2008.<ref name=Fin/>
-	Despite Gannett's national footprint, most of the company's advertising revenue is local, and therefore subject to local economic conditions in the markets in which Gannett operates. In 2007, local and classified advertising made up 84% of Gannett's total print advertising revenues.<ref>[http://www.sec.gov/Archives/edgar/data/39899/000119312508041403/d10k.htm#toc99200_11 Gannett 2007 10-K] page 25</ref>	+	==Company Overview==
-		+	Gannett is a media conglomerate that operates three businesses: [[Newspapers| publishing]], digital, and [[broadcasting]].<ref name=News>[http://sec.gov/Archives/edgar/data/39899/000136231009002765/c81466e10vk.htm GCI 2008 10-K, Item 1, pg. 4]</ref> GCI's publishing division, which includes its primary USA Today newspaper, is the company's largest segment in terms of revenue.<ref name=Fin>[http://sec.gov/Archives/edgar/data/39899/000136231009002765/c81466e10vk.htm GCI 2008 10-K, pg. 67]</ref>
-	==Business Overview==	+
-	Gannett is a media conglomerate that operates three businesses: [[Newspapers| publishing]], digital, and [[broadcasting]].<ref name=News>[http://sec.gov/Archives/edgar/data/39899/000136231009002765/c81466e10vk.htm GCI 2008 10-K, Item 1, pg. 4]</ref> GCI's publishing division, which includes its primary USA Today newspaper, is the company's largest segment in terms of revenue as it accounts for 84.4% of the company's 2008 revenue.<ref name=Fin>[http://sec.gov/Archives/edgar/data/39899/000136231009002765/c81466e10vk.htm GCI 2008 10-K, pg. 67]</ref> In 2008, GCI earned $6.8 billion in revenue.<ref name=Fin/>	+
	===Publishing (84.4% of Revenue)===		===Publishing (84.4% of Revenue)===
-	Gannett is the largest newspaper publisher in the U.S. by circulation.<ref name=Over/> GCI publishes 85 daily newspapers including the USA Today and about 850 non-daily publications as well as affiliated websites.<ref name=Over/> GCI also owns publication operations in the United Kingdom, with 17 daily newspapers and more than 200 weekly publications.<ref name=Over/> The company's U.S. publications reach about 14 million readers every weekday and 12.6 million readers every Sunday.<ref name=USA>[http://sec.gov/Archives/edgar/data/39899/000136231009002765/c81466e10vk.htm GCI 2008 10-K, Item 1, pg. 5]</ref>	+	Gannett is the largest newspaper publisher in the U.S. by circulation.<ref name=Over/> GCI publishes 85 daily newspapers including its flaghship USA Today and about 850 non-daily publications as well as affiliated websites.<ref name=Over/> GCI also owns publication operations in the United Kingdom, with 17 daily newspapers and more than 200 weekly publications.<ref name=Over/> The company's U.S. publications reach about 14 million readers every weekday and 12.6 million readers every Sunday, with the USA Today reaching about 2.25 million readers daily.<ref name=USA>[http://sec.gov/Archives/edgar/data/39899/000136231009002765/c81466e10vk.htm GCI 2008 10-K, Item 1, pg. 5]</ref><ref>[http://sec.gov/Archives/edgar/data/39899/000136231009002765/c81466e10vk.htm GCI 2008 10-K, Item 7, pg. 31]</ref>
-	The publishing segment depends greatly on advertising revenues to run its businesses- advertising represented 73% of the segment's 2008 revenue.<ref name=Why>[http://sec.gov/Archives/edgar/data/39899/000136231009002765/c81466e10vk.htm GCI 2008 10-K, Item 7, pg. 30]</ref> GCI's publications also earn revenue through circuIation fees and commercial printing.<ref name=Why/> 2008, GCI's publications division earned $5.7 billion in revenue, a 13% drop from 2007, primarily because of a 16% drop in advertising sales in 2008.<ref name=Why/> Moving forward, the company expects that its publication revenues will be further threatened by the [[U.S. Economic Cycles| global recession]] in 2009 as advertisers continue to slash advertising expenditures.<ref name=Why/>	+	The publishing segment depends greatly on advertising revenues to run its businesses.<ref name=Why>[http://sec.gov/Archives/edgar/data/39899/000136231009002765/c81466e10vk.htm GCI 2008 10-K, Item 7, pg. 30]</ref> GCI's publications also earn revenue through circuIation fees and commercial printing.<ref name=Why/>
	===Digital (4.2% of Revenue)===		===Digital (4.2% of Revenue)===
-	In 2008, GCI created its digital segment, which includes its online businesses like CareerBuilder.com and ShopLocal.<ref name=Dig>[http://sec.gov/Archives/edgar/data/39899/000136231009002765/c81466e10vk.htm GCI 2008 10-K, Item 7, pg. 32]</ref> CareerBuilder.com is primarily based in North America- the website is the largest online recruitment and career advancement source for employees, recruiters, and job seekers.<ref name=More>[http://sec.gov/Archives/edgar/data/39899/000136231009002765/c81466e10vk.htm GCI 2008 10-K, Item 7, pg. 33]</ref> GCI's digital segment earned $281 million in revenue in 2008.<ref name=Dig/> In 2009, the company expects its digital business to grow following expansion of its CareerBuilder.com website to Europe and Asia.<ref name=More/>	+	The digital segment, created in 2008, includes its online businesses like CareerBuilder.com and ShopLocal.<ref name=Dig>[http://sec.gov/Archives/edgar/data/39899/000136231009002765/c81466e10vk.htm GCI 2008 10-K, Item 7, pg. 32]</ref> CareerBuilder.com is primarily based in North America- the website is the largest online recruitment and career advancement source for employees, recruiters, and job seekers.<ref name=More>[http://sec.gov/Archives/edgar/data/39899/000136231009002765/c81466e10vk.htm GCI 2008 10-K, Item 7, pg. 33]</ref>
	===Broadcasting (11.4% of Revenue)===		===Broadcasting (11.4% of Revenue)===
-	GCI's broadcasting segment includes 23 television stations and affiliated websites in markets with a total of 20.8 million households reaching 18% of the U.S. population.<ref name=More/> Like its other segments, GCI's broadcasting business earns revenue primarily through advertising sales.<ref name=More/> In 2008, the broadcasting segment earned $773 million in revenue, a 2% decrease from a year earlier because of drops in advertising sales.<ref name=More/> However, the segment's online revenues increased by 13% in 2008 as the company attempts to transition its television broadcasting to the [[The Internet Impact| Internet]].<ref name=More/> In 2009, GCI expects its broadcasting revenue to decline further because of a weakening [[advertising]] market.<ref name=More/>	+	GCI's broadcasting segment includes 23 television stations and affiliated websites in markets with a total of 20.8 million households reaching 18% of the U.S. population.<ref name=More/> Like its other segments, GCI's broadcasting business earns revenue primarily through advertising sales.<ref name=More/>
-	[[Image: GCIrev.jpg|right|thumb|400px| GCI Revenue Breakdown by Business Segment <ref name=mula>[http://sec.gov/Archives/edgar/data/39899/000136231009002765/c81466e10vk.htm GCI 2008 10-K, pg. 66]</ref>]]	+
-	==Financial Analysis==	+	==Trends and Forces==
-	[[Image: Gcifin1.jpg|right|thumb|600px| GCI 5 Year Financial Overview <ref name=mula/>]]	+	===Slumping Advertising Expenditures Leads to Lower Revenues===
-	Gannett earned $6.8 billion in revenue in 2008, representing a 9% drop from 2007 because of weaker performance in its publishing and broadcasting divisions.<ref name=Cash>[http://sec.gov/Archives/edgar/data/39899/000136231009002765/c81466e10vk.htm GCI 2008 10-K, Item 7, pg. 25]</ref> In particular, GCI's publishing segment decreased 13% in revenue in 2008 because of declines in advertising sales associated with the global economic crisis.<ref name=Cash/>	+	Gannet generates most of its revenue from advertising, which includes both print and online channels. Like most newspaper companies, Gannett has suffered declines in print advertising revenue due in large part to the increasing popularity of the Internet and [[Impact of Internet Advertising|online advertising]]. Gannett has responded to the challenges of the print industry by increasing its own online presence, but is still failing to stem its decreases in advertising sales in its publishing and broadcasting businesses.
-	GCI incurred operating expenses of $13.5 billion in 2008 primarily because one-time non-cash imparirment charges of $8.35 billion regarding some of the company's publications.<ref name=Cash/> Operating expenses excluding the non-impairment charges declined 3% in 2008 representing lower newsprint expenses.<ref name=More/> As a result of the non-cash impairment charges, GCI reported a net loss of $6.65 billion in 2008.<ref name=Cash/> However, apart from these one-time costs, the company's net income still would have declined 27% during the year because of slumping revenues in its publishing and broadcasting divisions.<ref name=More/>	+	Several areas of print advertising have been particularly affected by economic conditions and the shift towards the Internet. GCI's publications rely primarily on [[Auto Makers| automotive]], [[retail]], and [[Classified Advertising Revenue| classified]] advertising to earn revenue.
-	==Business Drivers==	+	Gannett has worked to increase its online competitiveness and created the Gannett Digital group in 2006 to focus on these efforts. Its online initiatives have focused around developing Web sites for its existing newspapers and television networks. In theory, the company will be able to leverage its existing user base while gaining a better understanding of its audience through registration and measuring behavior online.
-	[[Image:GCI6.png|thumb|340px|right]]
-	===Advertising===	+	===Declining Circulation Compounds Revenue Woes===
		+	Though the age of the Internet has diminished the importance of the circulation of print newspapers, it nevertheless remains an essential factor to newspapers’ profitability. This includes both newspapers sold on newsstands as well as subscriptions. USA Today is the paid newspaper with the largest circulation in the country and Gannett has the highest total circulation numbers of any newspaper company, averaging about 6.6 million in daily paid circulation.<ref name=Over/>
-	Gannet generates most of its revenue from advertising, which includes both print and online channels. Like most newspaper companies, Gannett has suffered declines in print advertising revenue due in large part to the increasing popularity of the Internet and [[Impact of Internet Advertising|online advertising]]. Gannett has responded to the challenges of the print industry by increasing its own online presence. Despite rapid growth in its online advertising revenue, overall advertising declined by 6.3% from 2006 to 2007.	+	Similar to the decline in advertising, Gannett has suffered from ongoing decreases in circulation as readers transition to the [[The Internet Impact| Internet]] for their news.
-	====Print Advertising====	+	===Vulnerable to [[Lumber Prices| Newsprint Prices]] ===
-	Several areas of print advertising have been particularly affected by economic conditions and the shift towards the Internet. Local papers' [[real estate]] classified ad sales decreased by 11.2% in the first quarter of 2007 compared to the same time last year. This precipitous decline can be attributed both to the [[Residential Real Estate Prices|weakening real estate market]] as well as to the increasing availability of advertising real estate online. A major reason for the shift of advertising from print to online is the ability to target a specific audience on the Internet and measure activity. Newspaper are more limited in their targeting abilities, although Gannett has made efforts to better understand its offline reader audience. In Q4 2008, GCI's print advertising decreased 22.7% as a result of both weaker advertising spending and a move towards [[Internet Advertising]].<ref name=aps>[http://www.google.com/hostednews/ap/article/ALeqM5hGrgxXiWy-9rfl9QCa4BfY1CIoQgD961OB080 "Gannett 4Q earnings fall on weak ad revenue" The Associated Press 1/30/2009]</ref>	+	[[Timber Prices|Newsprint prices]] are a significant cost for any newspaper, and consolidation among suppliers has increased prices for newsprint.<ref name=Cash/> Gannett has been more aggressive than its competitors to minimize these costs, however. In the past, the company reduced the width of all but one of it presses and newspapers.<ref>[http://www.sec.gov/Archives/edgar/data/39899/000119312508041403/d10k.htm#toc99200_11 Gannett 2007 10-K] page 8</ref>
-		+
-	====Online Advertising====	+
-	A company's online advertising revenue is very much dependent on its ability to attract traffic. Gannett has worked to increase its online competitiveness and created the Gannett Digital group in 2006 to focus on these efforts. Its online initiatives have focused around developing Web sites for its existing newspapers and television networks. In theory, the company will be able to leverage its existing user base while gaining a better understanding of its audience through registration and measuring behavior online. Online revenue for the Web sites of its local newspapers increased by 24% in 2006.	+
-		+
-	In addition to its efforts to improve the online components of its existing publications, Gannett has also made strategic partnerships to bring in revenue from other Web sites. Specifically, Gannett has invested jointly in these advertising Web sites.	+
-		+
-	* Careerbuilder: a job search Web site, which draws in employer advertisers and is now the leading Web site of its sort, having surpassed Monster.com.	+
-	* Point Roll: a site to provide advertisers with media for their ads.	+
-	* Classified Ventures: a web site for automobile and real estate classified advertising.	+
-	* Shearmanstravel: a website for travel planning.	+
-	* Topix.net: a news Web site, which brings together a variety of news services.	+
-	* ShopLocal: a broad website for local, regional and national advertisers..	+
-		+
-		+
-	In August 2006, Gannett increased its investment in CareerBuilder, ShopLocal and Topix.net by $155 million, and the company currently holds a 43% equity interest in CareerBuilder and ShopLocal and a 32% interest in Topix.net.	+
-		+
-	Gannett efforts have significantly increased its penetration into the online channel. As of December 2005, Gannett's sites attracted almost 21 million unique visitors, or about 13.5% of the total Internet audience at the time. In 2006, Gannett averaged more than 45 million page views per month.	+
-		+
-	===Circulation===	+
-		+
-	Though the age of the Internet has diminished the importance of the circulation of print newspapers, it nevertheless remains an essential factor to newspapers’ profitability. This includes both newspapers sold on newsstands as well as subscriptions. USA Today is the paid newspaper with the largest circulation in the country and Gannett has the highest total circulation numbers of any newspaper company.	+
-		+
-	Similar to the decline in print advertising, Gannett has suffered from ongoing decreases in circulation. The company's average weekday circulation fell by over 6% from 2006 to 2007.	+
-		+
-	===Broadcasting===	+
-		+
-	In 2007, Gannett's 23 television networks reached about 18% of American homes, and revenue from broadcasting comprised about 11% of the company's total revenue. <ref> [http://www.sec.gov/Archives/edgar/data/39899/000119312508041403/d10k.htm GCI 2007 10-K, Item 1, page 9] </ref>	+
-		+
-	Gannett earns the majority of broadcast revenue through local and national advertising and to a lesser extent. Several other revenue sources include:	+
-	* Ads on the stations' Web sites	+
-	* Broadcasting fees paid by cable and satellite companies	+
-	* Captivate, a service which projects ads on screens in office and hotel elevators	+
-		+
-	Broadcast revenues increased by 16% between 2005 and 2006 and online revenue from the network websites increased by 50% during this time period. However, a large part of this growth can be attributed to the 2006 Winter Olympics and may not reflect on the company's long-term broadcasting success. Subsequently, the company's revenue in this area declined in 2007.	+
-		+
-	===U.K. Newsquest===	+
-		+
-	Gannett operates in the United Kingdom through its Newsquest division, which is that country's second largest regional newspaper company and includes approximately 300 publications. In 2007, the division generated about $1.09 billion in revenue--around 16% of the company's overall revenue. Like its American counterpart, Newsquest depends heavily on advertising--86% of revenue--and to a lesser extent, circulation--14% of revenue.	+
-		+
-	Newsquest has made efforts to increase its online offerings much in the same way as Gannett's domestic operations. The company has focused on improving the content for its newspaper Web sites (including adding video content) and the Newsquest reached around 3.3 million unique viewers in 2006. Newsquest also owns 25% of Fish4, the UK's most popular employment recruiting Web site.	+
-		+
-	==Printing Costs==	+
-		+
-	[[Timber Prices|Newsprint prices]] are a significant cost for any newspaper, and consolidation among suppliers has increased prices for newsprint - Gannett's costs went up 9% from 2005 to 2006.	+
-		+
-	Gannett has been more aggressive than its competitors to minimize these costs, however. In 2007, the company reduced the width of all but one of it presses, and the company says it plans additional page size reductions for 30 newspapers in 2008.<ref>[http://www.sec.gov/Archives/edgar/data/39899/000119312508041403/d10k.htm#toc99200_11 Gannett 2007 10-K] page 8</ref> The company has started using cheaper, lighter weight newsprint for some of its publications.	+
	==Competition==		==Competition==
-	Gannett's competition is twofold: other newspapers chains, and increasingly, [[Impact of Internet Advertising|Internet properties]]. In the chart below depicting advertising spend, newspapers saw a compound annual growth rate of -1% from 2000 to 2006 while Internet advertising grew by 12% annually during that same period.	+	Gannett's competition is twofold: other newspapers chains, and increasingly, [[Impact of Internet Advertising|Internet websites]]. Gannett's national print competitors include [[New York Times Company (NYT)]]-publisher of the iconic namesake newspaper--and [[News Corporation (NWS)]]-publisher of the Wall Street Journal. It also competes with countless local newspapers such as the [[Washington Post Company (WPO)|The Washington Post]], and [[Hearst-Argyle Television (HTV)]]'s San Francisco Chronicle.
-		+
-	[[Image:Newspaper_and_Internet_Ad_Spend_-_US_2000-2006.jpg|thumb|500px|'''Advertising Spend ($ Millions)'''|center]]	+
	{{clr}}		{{clr}}
-	<autowikidata/>
-
-	===Print===
-
-	[[Image:Picture_2.png|right]]
-
-	Gannett's national print competitors include [[New York Times Company (NYT)]]--publishers of the iconic namesake newspaper--and [[Dow Jones (DJ)]]--publishers of the Wall Street Journal. It also competes with countless local newspapers such as [[Washington Post Company (WPO)|The Washington Post]], in different geographies.
-
-
-	{| class="wikitable"
-	|- bgcolor="#ccccec"
-	| width="120"| '''Company'''|| width="100" align = "center" | '''Circulation, MM''' || width="140" align = "center" | '''% Internet Revenue''' || width="120" align = "center" | '''Revenue, $MM'''
-	|-
-	|Gannett|| align="center" | 7.9 || align="center" | 5.0% || align = "center" | 8,033
-	|-
-	|[[DJ|Dow Jones]]|| align="center" | 2.8 || align = "center" | 10.2% || align = "center" | 2,036
-	|-
-	|[[NYT|New York Times]]|| align="center" | 2.3 || align = "center" | 8.3% || align = "center" | 3,290
-	|-
-	|}
-	''Source: Company Reports.''
-
-	===Online===
-
-	One reason the Internet has dramatically affected the newspaper industry is because it has become cheaper to reach audiences. In 2006, the average newspaper advertising CPM (or cost per thousand viewers) was around $25, while the comparable metric for websites was around $5. In addition, Internet advertising companies such as [[Google (GOOG)]] and [[Yahoo! (YHOO)]] have implemented performance-based business models allowing advertisers to pay only when a viewer activates a desirable action (such as clicking).
-
-	Gannett has responded to serious Internet competition for advertising revenue with its joint investments in Web sites and development of online sites around its existing offline properties. In 2006, Gannett's Internet revenue rose by 24 percent but it trails both Dow Jones and New York Times in terms of the portion of revenue coming from online.
-	Gannett has recently launched a new effort at uniting its print, online and broadcast holdings. Called the Information Center [http://www.newsandtech.com/issues/2006/12-06/pt/12-06_gannett-convergence.htm], it is envisioned as a 24-hour news desk that streamlines the process of reporting and editing. Reporters will be asked to have print, online and television skills and editors will be expected to be able to shape multi-platform content. This is broadly conceived as a way to take Gannett into the information and Internet age.
	==References==		==References==
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	[[category:Mature]]		[[category:Mature]]
	[[category:Media &Entertainment]]		[[category:Media &Entertainment]]
-	[[category:Publishing - Newspapers*]]	+	[[category:Publishing - Newspapers]]
	[[Category:Newspapers*]]		[[Category:Newspapers*]]

---

Current revision

Gannett (NYSE:GCI) is a media company that publishes USA Today, the nation's largest newspaper by circulation, along with 85 other daily newspapers in the U.S.^[1] Additionally, GCI publishes 17 daily newspapers internationally as well as more than 200 weekly newspapers in the United Kingdom, which together account for 84% of GCI's revenue.^[2] Apart from publishing, Gannett also earns revenue through its digital and broadcasting segments.^[1]

Gannett's circulation numbers and attendant advertising revenues have been declining - a trend shared by many of the company's competitors, who are losing advertising dollars to the internet and other media. This spells doom for Gannett's publications as 73% of GCI's publishing revenues are earned through advertising sales.^[3] In an effort to offset these struggles with the print paper, Gannett is turning its focus to emphasizing other mediums (such as online and mobile) while de-emphasizing the print paper.^[4]

In an attempt to capitalize on internet advertising revenue, Gannett has built websites for its publications, and has acquired, built, or partnered with a number of websites like its CareerBuilder.com. The company's online advertising revenues increased by 72% in 2008 as the company continues to expand its online presence.^[5] However, the company's declines in traditional print and broadcasting advertising revenue contributed to GCI's 9% decrease in overall revenue during 2008.^[2]

Company Overview

Gannett is a media conglomerate that operates three businesses: publishing, digital, and broadcasting.^[6] GCI's publishing division, which includes its primary USA Today newspaper, is the company's largest segment in terms of revenue.^[2]

Publishing (84.4% of Revenue)

Gannett is the largest newspaper publisher in the U.S. by circulation.^[1] GCI publishes 85 daily newspapers including its flaghship USA Today and about 850 non-daily publications as well as affiliated websites.^[1] GCI also owns publication operations in the United Kingdom, with 17 daily newspapers and more than 200 weekly publications.^[1] The company's U.S. publications reach about 14 million readers every weekday and 12.6 million readers every Sunday, with the USA Today reaching about 2.25 million readers daily.^[7][8]

The publishing segment depends greatly on advertising revenues to run its businesses.^[3] GCI's publications also earn revenue through circuIation fees and commercial printing.^[3]

Digital (4.2% of Revenue)

The digital segment, created in 2008, includes its online businesses like CareerBuilder.com and ShopLocal.^[9] CareerBuilder.com is primarily based in North America- the website is the largest online recruitment and career advancement source for employees, recruiters, and job seekers.^[10]

Broadcasting (11.4% of Revenue)

GCI's broadcasting segment includes 23 television stations and affiliated websites in markets with a total of 20.8 million households reaching 18% of the U.S. population.^[10] Like its other segments, GCI's broadcasting business earns revenue primarily through advertising sales.^[10]

Trends and Forces

Slumping Advertising Expenditures Leads to Lower Revenues

Gannet generates most of its revenue from advertising, which includes both print and online channels. Like most newspaper companies, Gannett has suffered declines in print advertising revenue due in large part to the increasing popularity of the Internet and online advertising. Gannett has responded to the challenges of the print industry by increasing its own online presence, but is still failing to stem its decreases in advertising sales in its publishing and broadcasting businesses.

Several areas of print advertising have been particularly affected by economic conditions and the shift towards the Internet. GCI's publications rely primarily on automotive, retail, and classified advertising to earn revenue.

Gannett has worked to increase its online competitiveness and created the Gannett Digital group in 2006 to focus on these efforts. Its online initiatives have focused around developing Web sites for its existing newspapers and television networks. In theory, the company will be able to leverage its existing user base while gaining a better understanding of its audience through registration and measuring behavior online.

Declining Circulation Compounds Revenue Woes

Though the age of the Internet has diminished the importance of the circulation of print newspapers, it nevertheless remains an essential factor to newspapers’ profitability. This includes both newspapers sold on newsstands as well as subscriptions. USA Today is the paid newspaper with the largest circulation in the country and Gannett has the highest total circulation numbers of any newspaper company, averaging about 6.6 million in daily paid circulation.^[1]

Similar to the decline in advertising, Gannett has suffered from ongoing decreases in circulation as readers transition to the Internet for their news.

Vulnerable to Newsprint Prices

Newsprint prices are a significant cost for any newspaper, and consolidation among suppliers has increased prices for newsprint.^[11] Gannett has been more aggressive than its competitors to minimize these costs, however. In the past, the company reduced the width of all but one of it presses and newspapers.^[12]

Competition

Gannett's competition is twofold: other newspapers chains, and increasingly, Internet websites. Gannett's national print competitors include New York Times Company (NYT)-publisher of the iconic namesake newspaper--and News Corporation (NWS)-publisher of the Wall Street Journal. It also competes with countless local newspapers such as the The Washington Post, and Hearst-Argyle Television (HTV)'s San Francisco Chronicle.

References

1. ↑ ^{1.0 1.1 1.2 1.3 1.4 1.5}
2. ↑ ^{2.0 2.1 2.2} GCI 2008 10-K, pg. 67
3. ↑ ^{3.0 3.1 3.2} GCI 2008 10-K, Item 7, pg. 30
4. ↑ Wikinvest: Gannett Revamps USA Today for Web
5. ↑ GCI 2008 10-K, Item 1, pg. 10
6. ↑ GCI 2008 10-K, Item 1, pg. 4
7. ↑ GCI 2008 10-K, Item 1, pg. 5
8. ↑ GCI 2008 10-K, Item 7, pg. 31
9. ↑ GCI 2008 10-K, Item 7, pg. 32
10. ↑ ^{10.0 10.1 10.2} GCI 2008 10-K, Item 7, pg. 33
11. ↑
12. ↑ Gannett 2007 10-K page 8

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