Specialty publications follow trend of dropping circulation: numbers for Daily Journal Corp. show significant decline.

For years circulation has declined at daily newspapers, but specialty publications have in many cases bucked the trend. Now it seems gravity is catching up to legal newspapers, based on the 2006 annual report of Daily Journal Corp.

The report shows circulation at the flagship Los Angeles Daily Journal fell 5.4 percent in the year ending Sept. 30. At two other L.A.-based properties, Daily Commerce and California Real Estate Journal, paid subscriptions fell 22 percent and 42 percent respectively.

Financially, the company reported revenues of $32.4 million for the year, representing a drop of 2.7 percent compared with 2005. Net income fell a whopping 43.1 percent to $2.4 million. These days the Internet usually receives the blame for circulation woes and that seems to tell the story at Daily Journal. Classified and display ads account for about 34 percent of total revenues, but "recently, Internet sites devoted to recruitment have become significant competitors of our newspapers and Web sites for classified advertising," according to a company report. Executives at the paper declined to be interviewed.

At the same time, state legislatures are looking to reform public notice advertising, including proposals to move them online. The so-called legal ads represent 28 percent of Daily Journal revenues. Any reform that eliminates or reduces the need for legal ads "would have a significant adverse impact on the company's public notice advertising revenues," the report states.

Despite the cloudy outlook, the report barely moved the stock price. Five trading days after the report's release, the stock closed at $41.58, up less than 1 percent. No analysts currently track the company.