The Internet was going to save the newspaper industry. The Internet was going to save The New York Times Company (NYT). Especially The New York Times. The daily is so well-regarded and popular that the parent firm’s websites are ranked No.14 in visitors among all web properties in the US.

But, internet advertising, which was supposed to be able to dodge a recession, is now falling nearly as fast as print sales.

As the costs of printing and delivering newspapers has risen over the last several years, and their advertising bases has been largely replaced by Web sites such as Craigslist and CareerBuilder, publishers bet they could migrate their brands online. The brands were already well-known which should have given them an edge over recently created news sites like Google (GOOG) news.

What newspapers found out is that, by the time they had moved their products onto the internet, there were already websites up and running to give everything from shopping advice to sports scores to business news to weather. Online habits has fragmented the news audience. Consumers were will to use several sites to gather the information that they needed every day.

Today, The New York Times reported that its fourth quarter revenue decreased 10.8% to $772.1 million. Advertising revenue decreased 17.6% and circulation revenue increased 3.7%. The paper has been raising its subscription prices. Ad revenue at the company’s standalone operation, About.com, fell 3% to $30 million. Total Internet revenue, including the firm’s newspaper websites fell 3% to $92 million.

The numbers got worse in December, which means that 2009 will probably be rough and online revenue will not buttress print results. In the last month of the year, total company sales fell 9% to $232 million, Internet sales fell even faster, down 12%.

A great deal has been said about the value of the Times as a public service. It is, by almost all accounts, the most important newspaper in the country. Whether it is a shame or not is a matter of opinion, but The New York Times will have to go through more rounds of cost cutting in 2009. Some of them will almost certainly involve sharp decreases in the number of writers and editors that the newspaper firm employs.

Whatever hope there may have been that the internet would save those jobs is nearly gone.

Douglas A. McIntyre

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