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LinkedIn beefs up cash war chest, NYTimes running on fumes
Maybe it's the sign of the times, or a sign of the future. Classifieds, long a staple revenue for newspapers, continue to shift to the online players. For the New York Times, the gray of the Gray Lady is really showing.
The New York Times on Thursday said it had weak classified advertising in September. Silicon Alley Insider suggested that the New York Times is running on "fumes," and "burning more than it's taking in."
Meanwhile, LinkedIn, the leading business network and a profitable one to boot, is building up its cash war chest and benefiting from job classifieds. CEO Dan Nye announced in the LinkedIn blog that the company just raised $22.7 million, as a follow-on round of the Series D, $53 million it raised in June. The company had a valuation of $1 billion in June, according to another post by Dan.
Importantly, Linkedin is benefiting from the downturn as "more job seekers and recruiters are turning to the Web site," according to Dan, in an interview with the Wall Street Journal.
Seems to me that unlike the Internet bubble days, the companies that are troubled today aren't the newbies. They're the ones building the "cash" war chest. You won't be seeing LinkedIn in a Barron's "Up in Smoke" article.
LinkedIn, which has 370 employees, has raised over $100 million. The latest round comes from SAP Ventures, Goldman Sachs and McGraw-Hill. Revenues are apparently doubling year-over-year.
Now, I realize that LinkedIn and the New York Times are two different businesses. And, LinkedIn's revenue is a fraction of the New York Times, which just reported preliminary quarterly sales of $687 million, down nearly 9% from the same period a year ago.
But it is interesting to point out the juxtaposition of these two entities as the definition of new media evolves.
New York Times on Thursday reported September revenue results, showing that overall advertising in its News Media group declined 14%, despite a 16.4% jump in Internet advertising. Among the weak spots at the newspaper was a drop in classified ads. Henry Blodget, at Silicon Alley Insider, had this to say in his "New York Times running on fumes" piece today:
"Not sure how it came to this so fast, but the New York Times (NYT) is
approaching the point where it will have to manage its business
primarily to conserve cash and avoid defaulting on its debt. This
situation will only get worse as advertising revenue continues to fall,
and it will be very serious by early next year."
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