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McClatchy Sees Ad Sales Down in First Half of 2007

McClatchy Co., the No. 2 U.S. newspaper publisher, cautioned that advertising revenue would be down in the first half of next year, hurt by depressed real estate and employment spending.

The company, which publishes The Miami Herald and The Sacramento Bee, among others, said automotive advertising could also prove challenging while the retail category would likely show growth but remain "choppy."

Consolidated advertising revenue in November decreased 4.7%, it said.

Also Wednesday, New York Times Co., which operates the Boston Globe and International Herald Tribune along with its namesake newspaper, said its November revenue slipped 1.7% as its print advertising continues to suffer.

McClatchy's forecast follows a recent pattern for the newspaper industry (Play-By-Play: Rough Times For Newspapers). A slow housing market, troubles in the auto industry and other economic factors are contributing to a pullback in print advertising that is hurting newspapers, adding to pressures from falling circulation as more readers turn to the Internet.

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To offset that, McClatchy and other publishers have looked to cut costs and build up their own Internet businesses.

"As we look to next year we expect strength in Internet operations and direct marketing, offset by lower advertising in our print products," McClatchy Chief Executive Gary Pruitt said in a statement.

Pruitt added that the company could not yet forecast revenue trends for the second half of next year.

On the expense side, Pruitt said that lower newsprint prices and other measures should help McClatchy cut costs in 2007.