Yep, their stock price didn't crash with the dotcom bubble, they still had time to make adjustments without it being so dire. Their stock averaged about $35 / share, from mid 1997 to mid 2005. They had to take loans from Carlos Slim, and they could have just earlier issued stock with a $7 billion market cap.
The idea here is that their business got disrupted by the internet and therefore they need some sort of internet-wizard who can tell them all the things they need to do to reclaim their business. That world-view only works if you think that the internet is nothing more than magic.
The reason that newspapers are failing is that they had local monopolies, got soft and fat, and then got disintermediated in a hurry by the internet. Now, newspapers don't even have a good or correct idea of their own identity any longer. I'll give you a hint, a newspaper ain't about reprinting marmaduke, or the weather, or crossword puzzles, or classified ads, or even obituaries.
Someone recently brought up that great quote of George Orwell's "Journalism is printing what someone else does not want printed: everything else is public relations."
I think there's a sound truth to that. But I think that's only half of journalism, the other half is research. Not just revealing what has been known by some and kept secret to others, but revealing what has been unknown to everyone. Investigative reporting need not necessarily have a "bad guy", as in Orwell's view.
But this is almost orthogonal to the current mission of most newspapers and the current educational foundation of most journalism graduates. "Journalism" the discipline today focuses on the form, the mechanism, and access, precisely those things which have become the most ubiquitous and fungible in the modern age. Journalism puts the cart before the horse, imagining that reporting is done by journalists with specializations. The way of the future, I believe, is the opposite, experts in a particular field with journalist specializations.
In the past there was much value around merely printing or re-printing a thing. It was like manufacturing. If you manufacture a widget it doesn't matter that a thousand other people are simultaneously manufacturing nearly identical widgets, in the end it's still a widget, and has some value. Today there is only a little value in making newspaper "widgets" (writing stories) because copying is so close to free as to make little difference. The world doesn't need a million stories all regurgitating the same wire reports to their local readership, everyone has access to the wire reports directly now.
The value is in original reporting and investigation. That's not something that an executive skilled in SEO and traffic monetization could necessarily help with. If anything they'd be more likely to drive your newspaper into being a tabloid than into becoming a robust source of original reporting.
But that is what I would do if I ran a newspaper. Fire all the regurgitators, keep all the people who will write the sort of stories that nobody else is writing and hire people who are experts in some field first and writers second.
It's even worse for the NY Times. They derived a huge amount of their business from national and international news (rather than just local / NY City). At the national & international level, there is obviously tremendous competition online.
There is going to be consolidation in the newspaper industry, however I think certain newspapers like the NYT and the WSJ are best suited to navigate this. The NYT is a newspaper of record for all the reasons InclinedPlane stated makes good journalism; they are already incredible in that respect. Paywalls are the right strategy for them because they have a premium that people are willing to pay for, which has worked for the WSJ.
Claims that the newspaper industry is dead are likely from people who don't read any newspapers. The NYT is still the standard (WSJ and Financial Times among the financial press) for journalism and there will always be a market for that, despite the rise of blogs, citizen journalism, and cable news.
I'd also like to add that there is research that shows that the monopolies newspapers have/had is responsible for greater accuracy and less bias (and I would argue greater overall quality). Cable news is the best example of heavy competition being responsible for a decline in accuracy and quality. Fox and MSNBC cater to different ends of the political spectrum because it draws viewers in. CNN, who attempts to position themselves as straight news, has been caught holding the ratings bag because they have no niche (and they were at one point the top of their game during the 90s with their coverage of the Gulf War).
I agree with much of what you said though I do think there are a small handful of sites and channels (such as PBS) which is interested in original journalism. Sites that concentrate on news regurgitation won't last in the long run because the quality is inferior.
The main issue for the NYT for me is the pricing model and a lack of creativity when it comes to their mobile applications.
The price for subscriptions (for Internet, phone and tablet) is three times higher than it should be. The goal of the NYT should be to get the paper in as many hands as possible and start from there. People will always pay for quality when it's reasonable.
Secondly, the mobile applications are seriously lacking in design and functionality. I'm willing to place good money that many of their paying customers in the future will be access their content from here instead of the site. If it was up to me, I would be looking for the next Mike McCue (Flipboard) or Mike Matas (Push Pop Press/Facebook) and put them completely in control of design.
Disclosure: I worked at a metro daily (the orange county register) as their first webmaster from 1994-2001.
I was there for the first collapse.