From paidcontent.org. Full story here.

As Gannett (NYSE: GCI) continues to be roiled with huge debt problems, an absent CEO, and hundreds more layoffs across its community newspapers, its digital division appears to be a sea of calm. In fact, to hear Josh Resnik (pictured), Gannett Digital’s VP and GM of the Gannett Digital Media Network, PointRoll CEO Jason Tafler and Ripple6 CEO Sang Kim, tell it, things are going just fine on their respective ends. As Gannett prepares for its Q2 earnings report next Wednesday morning, the digital unit faces a question left over from the previous quarter: do they represent a meaningful strength amid the company’s general weakness?

—The digital mirage: None of the executives would offer specifics on Q2 numbers, claiming only that digital ad sales are holding up. Certainly, as Gannett’s Q1 revenues fell 21.4 percent and net income dropped 60 percent, the McLean, VA.-based publisher’s interactive businesses saw $143.2 million in Q1 compared with just $13.9 million.

But Gannett’s digital oasis is also something of a mirage. The Q1 results were skewed by the addition of its increased stakes in both CareerBuilder (to 50.8 percent from 40.8 percent) and ShopLocal (100 percent from 42.5 percent). On a pro forma basis, digital’s operating revenues were 13.1 percent lower in Q1. That’s not to say that Gannett’s digital revenues are significantly under performing—and the incremental revenue from the online side keeps an ugly picture from looking even worse. Most importantly, as Gannett is expected to resemble a very different company by next year because of its debt woes, the digital business will ultimately take on greater prominence.