The New York Times just reported its fourth-quarter results to finish out 2011.

And it's still shrinking.

Despite the launch of an online paywall that has, by any measure, been a big success, the company's revenue for its core news business shrank again in 2011.

And because news expenses rose, profits shrank even more.

The culprit, as ever, is the company's print-ad business, which has shrunk steadily for the past five years.

The trends of the past five years are also likely a sign of the future of the New York Times: Steady restructuring and shrinking until the size of the newsroom and broader organization is finally in line with the size of the company's online business, which is thriving.

We estimate that the digital business will eventually support a newsroom about one-third to one-half the size of the paper's current one.

(The paper's online business, we believe, generates about ~$275 million of annual revenue.* This should support newsroom expenses of about $100 million annually, with another $150 million spent on sales, technology, operations and management. We have been told that the paper's current newsroom costs about $200 million a year.)

Fortunately, the New York Times is not in danger of immediate bankruptcy, which it was a few years ago.

Thanks to sharp cost-cutting, the company has returned to profitability. And thanks to frantic debt restructuring during the financial crisis, the NYT has also removed its creditors' foot from its throat and bought several more years to figure out a long-term plan.

But this happy escape has not alleviated the company's long-term problem:

Its core business, the print newspaper, is shrinking, and its digital business, however successful, cannot replace the lost revenue and profitability of the print business.

The chart below lays out the problem: After a century of growth, the New York Times's news business peaked earlier this decade with just over $3 billion in revenue and $500 million of operating profit. In the years since, however, the company's revenue (blue line) and operating profit (green bars) have begun to shrink.

And despite the enormous cost cuts the company has made since the early 2000s (red line), its operating profit--even in these recovery years like 2010 and 2011--doesn't approach the fat years of a decade ago.

Unless the New York Times Company can figure out a way to turn around the print newspaper circulation revenue (highly unlikely), this shrinkage will continue. Even if the online paywall is wildly successful, it will not replace the circulation and ad revenue the company will lose as print subscribers cancel. And as the print business shrinks, the print cost structure that supports it will have to shrink, too.

Here's the chart. The blue line is news division revenue. The red line is news division expenses. And the green bars, on a different scale, are the news division operating profit.

* According to the NYT's latest release, digital advertising for the News Media division totaled ~$234 million in 2011. Assuming that 300,000 digital subscribers are now paying $15/month apiece, this would add another $40 million of annual revenue. So, together, digital ads and subscribers should be producing about $275 million of annual revenue.