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Tickers in this Article: GCI, NYT, NWSA
In an effort to offset declining print revenues, Gannett Company Inc. (GCI) announced the acquisition of BLiNQ Media LLC, provider of social media marketing solutions for companies. However, the financial terms of the deal were not disclosed. The move comes as part of Gannett's strategy to revamp itself by increasing its digital applications, which are in high demand. This trend is also evident from the company's recently concluded quarter, wherein company-wide total digital revenue rose 12.9% to $311.7 million, driven by higher digital advertising and marketing solutions.

Currently, advertisers are migrating to the Internet, owing to increasing online readership and lower online advertising prices compared to print. With the ever increasing demand, the acquisition keeps Gannett well poised in social media marketing as BLiNQ is the industry leader in managing social media marketing campaigns.

Advertising, which remains a significant source of revenue for the company, is largely dependent upon the global financial health. Thus, Gannett is taking initiatives to diversify its business model, shielding itself against any economic onslaught by adding new revenue streams.

Gannett is also repositioning itself for improvement in print and digital media through a new subscription based model, whereby subscribers will be able to access the paid content through websites, mobile and tablet, and will have the preference of choosing the frequency of home delivery of print editions. On the other hand, the company will limit the number of free articles that a non-subscriber can access.

However, the concept of pay-and-read model is not new as the company's competitors News Corporation (NWSA) and The New York Times Company (NYT) are already charging their readers for online content.

Currently, we maintain our long-term 'Neutral' rating on Gannett. However, the company holds a Zacks #2 Rank that translates into a short-term 'Buy' recommendation.

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