• by Joe Mandese  @mp_joemandese, February 17, 2005

Characterizing February as "challenging," and noting that the foreseeable outlook for newspaper ad demand "remains limited," New York Times Co. President-CEO Janet Robinson Wednesday announced a tepid 1.4 percent gain in newspaper ad sales for January 2005.

While the company's flagship New York Times fared slightly better, recording a 2.3 percent sales gain for that newspaper division, the relatively weak start to the new year mirrored that of the nation's other major newspapers. Gannett's USA Today reported a 1.2 percent decline in ad revenues and a 1.9 percent drop in ad pages for January 2005, citing erosion in the automotive, technology and packaged goods categories.

Ad pages for the other major national newspaper, Dow Jones & Co.'s The Wall Street Journal fell due to continuing erosion in financial advertising.

Because these three papers are seen as bellwethers for national ad demand, their weak initial results are a foreboding note for the newspaper industry in 2005.

"Month to date at The New York Times, ad categories experiencing softness include financial services and telecommunications," disclosed The Times Co.'s Robinson, adding, "while banking and financial B2B/insurance advertising are seeing growth." There was at least one significant bright spot within the Times Co.'s January results. The company's Internet ad revenues, increased 35 percent compared with January 2004 due to strong growth in display advertising and in all classified advertising categories.

The Times Co., however, is in the throes of rethinking its Web publishing strategy, with some strong internal forces pushing to switch from a free, ad-supported model to some form of paid subscription for the NewYorkTimes.com website, a move the digital division fears would hurt its coverage and curtail future advertising gains.