MARKETWATCH ON NEWS CORP LIFE SUPPORT?

LBX reporting live from America.....

MARKETWATCH ON NEWS CORP LIFE SUPPORT?


Advertising spending is shrinking fast. Google expects earnings to grow by 4%.

The more pertinent question is what is going to happen to advertising spending in Finance oriented publications when the general public is losing interest in the Stock Market and Investing fast?

Investing and trading stocks have gone from the late 20th century mania to be as “out” as owning a Hummer SUV.

As more and more people open their 401(k) and mutual fund statements in April, and finally confront the tax loss sales in time for April 15, the reality will become impossible for a majority of the investor public to avoid.

In this environment, clearly, one of the most overbuilt and overmanned industry is Financial news sites and information services, TV, and media. Indeed, not even Bloomberg will be immune from this downturn.

The economy will likely see Financial services shrink to less than half its peak size as a percentage of GDP.

Where does this leave Dow Jones and Marketwatch?

The family of financial publications range from out and out stodgy icons (Wall Street Journal) to the plain out-of-fashion (community newspapers).

Marketwatch had potential to be a survivor, but its scandal plagued management never really recovered from the “resignation” of its founder and Editor Thom Calandra after being charged with Securities Fraud in 2004.

After Marketwatch was sold to Dow Jones, the better writers at Marketwatch gradually defected or were transferred to the Wall Street Journal and other flagship Dow publications, weakening the website further and further.

By 2008, Marketwatch was hardly anything more than a news wire reprint service with a few writers, but at least, it had a thriving “Community” of commentators.

This community virtually imploded around November, 2008, with the hostility of the Presidential election, the collapse of equity markets, and the financial crisis creating a toxic brew of investors who lost their shirts, finger pointing at politicians and blame games, and “community” members that ran wild.

By March, the “community” became a shadow of itself, with a large number of long time members drummed out, quit, or just disappeared.

Marketwatch’s page views, the all important metric for an online publication’s survival, plunged by over 30% in the most recent 3 months.

While News Corp does not break out revenues by individual entities, industry observers estimated that revenues at Marketwatch have declined roughly in proportion to the decline in pageviews.

Time for Dow Jones to buy a small Bank, and ask for TARP funding.