Newspaper revenue rose 7.7 percent in October, up from a gain of 5.4 percent in September, Deutsche Bank Alex Brown analyst Peter Appert estimated in a report. Continuing softness in retail ads was offset by strong national ad sales, particularly from Internet-related businesses, Appert said.
So far this year, shares of major U.S. newspaper publishers, including Gannett, Dow Jones, New York Times, Knight Ridder, Times Mirror and Tribune, have risen 18 percent as a group, compared with a 14 percent increase in the Standard & Poor's 500 index. A year ago, the group was "sharply underperforming" in the broader U.S. market amid fears that ad sales would slip in 1999 because of a slowdown in the economy. The opposite happened.
"Strength in personal income growth, consumer confidence, existing home sales and auto sales creates a positive backdrop for advertising spending," Appert said in the report.
An influx of Internet businesses looking for exposure has helped spur national ad sales at newspapers. This comes as industry observers debate the fate of traditional print newspapers, which are thought by some to be in their last days because of competition from online publications.
Internet businesses are being blamed for weaker sales in newspaper retail advertising, said Appert, who noted that some big advertisers may be holding back spending because of an advertising environment "glutted with '.com' activity."
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