If the Times can't make it, nobody can

Speculation that frustrated New York Times stockholders might bring management change to the nation’s newspaper of record is obscuring a much more important story.

Unless there's a revolt within the Sulzberger clan -- and there's no hint of that – the stockholder grumbling is going nowhere. The two-class stock structure that gives the family control of the paper and so angers other stockholders is doing precisely what it was designed to do – insulate the newspaper from short-term profit demands of Wall Street.

Publisher and board chairman Arthur Sulzberger had it exactly right in pointing out that stockholders knew what they were buying.

For me, the story isn't stockholder grumbling. It's whether the Times succeeds in transforming itself into a primarily Internet enterprise.

That's clearly the goal. Sulzberger revealed as much when he said a couple months ago that the Times had to be prepared to go paperless within five years.

The management of the Times -- more than any other newspaper – has a vision of the future and a plan to get there.

In moving to the Web, the Times' role as the nation's paper of record gives it a tremendous advantage. Most newspaper Web sites compete with their paper product. I can't cite specific research, but I suspect that the number of Chicago retirees in Florida who use chicagotribune.com to keep up with the Cubs is largely offset by locals who dropped their subscriptions because they can get what they need free from the online Tribune.

Not so the Times, whose Web site is pure gain. The weekday circulation of the Times is just over a million. But nytimes.com has 12 million unique viewers daily. Not in Google's league, but it's more than any other newspaper’s site.

With all this going for it, the New York Times has a better chance of crossing over to the Internet promised land than any other newspaper, with the exception of the Wall Street Journal. (The Journal has its own advantage – unique among mainstream newspapers. It's seen as a necessity by its core readers, who have demonstrated they’ll pay for the online version. A subscription is literally written off as the cost of doing business.)

But what if the Times doesn't succeed?

Last week, the Times downgraded its forecast of a 30 percent increase in Internet revenue this year.

This was scary. If the Times -- with its millions of additional readers on the Web and managers who know what they are doing – can’t find a way to make enough money online to offset the losses in the printed product, what chance do other newspapers have?

I'm optimistic the Times will succeed. But I think it will be a close call. The problem on the Web is the constantly growing competition for eyeballs spreading thin a fixed amount of advertising dollars. Twelve million Web viewers translates into a hell of a lot less ad revenue than 12 million subscribers to a printed newspaper.

In any case, I think we'll know the answer soon. I think Sulzberger got the time frame right: less than five years.