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Company: McGraw-Hill Companies (MHP)
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  Sluggish Economy Means States Cut Spending on Textbooks

About 40% of McGraw-Hill's revenue come from the sale of textbooks. A majority of books are purchased by public schools for classrooms, using money from the government. The sluggish economy has put state governments in a bind and forcing them to make budget cuts across the board. Unfortunately, public schools suffer from budget cuts by receiving less money for books and supplies. Because schools are fewer funds to buy new textbooks (and thus rely on old ones) the demand for McGraw-Hill's books fall, hurting its revenue. With high-population states like California and Illinois suffering from the economic environment, the demand for the company's textbooks faces the risk of falling.

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  IM business sagging

The IM segment will continue to face pressure on margins and lackluster performance due to stiff competition from Internet advertising.

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  Are kids still going to be lugging those books to school?

The education market is relatively small and has limited upside or growth potential for the company.

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