Long-time newspaper and Net exec Alan Mutter points out on his blog that McClatchy is rapidly losing whatever value it got from the 2006 Knight Ridder transaction:

The deep drop in the value of the McClatchy’s shares in the fourth quarter of 2006 is forcing the publisher to take the second extraordinary charge against its earnings in as many quarters. In the third quarter of 2007, McClatchy wrote off nearly $1.4 billion of the value of the goodwill of the assets it acquired when it purchased Knight Ridder.

If you add the $1.4 billion writeoff in the third quarter to the $775.6 million drop in the stock to date, the sum is equal to a shade under $2.2 billion, or almost exactly half of what McClatchy paid to buy Knight Ridder in the summer of 2006.

Mutter also notes that it is a ongoing mystery why McClatchy continues to lag the industry in online ad revenue. The trend started last fall and has yet to correct itself. This revenue gap must be one major topic of discussion inside the company, but so too is spending.

Mutter concludes, “It’s a safe bet that aggressive new cost cuts are on the agenda this week at the annual meeting of McClatchy’s publishers and editors.”

Update: Net head Marc Andreessen has kicked off the New York Times Deathwatch.