12 newspaper firms and Yahoo! agree to share content, sell ads

BY A CORRESPONDENT

17 April, 2007

In all, 12 newspaper companies have joined Yahoo! in a bid to sell advertisements and also help readers find local news online.

The development has been described by media analysts as a huge attempt by the struggling media industry to cope with the challenges posed by the continued rise of the Web.

The cooperation among the industry in this connection is being seen as crucial to attracting online advertisers, who want to reach newspapers’ online readers but do not want to deal with dozens of different sales and technical departments.

The newspapers’ share of local online advertising has fallen by 8 percentage points to 36%.

However, the agreement has a risk – individual newspapers will find their brands overwhelmed by Yahoo! when an expected bonanza of online advertisement revenue fails to materialise.

The move by the newspaper companies – called the ‘newspaper consortium’ – was first announced in November 2006. It initially included seven newspaper companies and 176 newspapers. Five more newspaper companies later signed on, including McClatchy, which owns the Sacramento Bee, Calkins Media, Media General, Morris Communications, and Paddock Publications.

The consortium now includes a total of 264 newspapers spread across 44 States in the United States. However, it leaves out key players, including Gannett, the largest newspaper publisher by circulation, and Tribune, the second largest. Gannett and Tribune have been developing a separate online advertising network.

According to Dean Singleton, chief executive of MediaNews and one of the architects of the partnership, this is the closest thing the newspapers have reached to an industry-wide effort. The 120 publications of MediaNews include the Mercury News and 25 other Northern California newspapers.

The first phase of the partnership focused on job-related advertising. According to the agreement, participating newspapers will replace their online employment advertisements with a link to Yahoo’s HotJobs service and list jobs in HotJobs’ database.

Yahoo! and the newspapers will begin to sell jointly online advertising later in 2007 and share the proceeds. Yahoo’s advertisement-serving software, which will let newspapers display graphical advertisements sold by Yahoo! on their websites, will be installed by the newspapers in 2008.

While the newspapers have agreed to install Yahoo’s search technology, Yahoo! has consented to treat the consortium members as preferred providers of local news across Yahoo’s own network.

Yahoo! officials have said a revenue sharing agreement “advantageous to both sides” is in place. However, no financial details were disclosed nor were terms of the agreements Yahoo! has with the newspapers.

The newspaper companies in the consortium include Belo Corp, Cox Newspapers, The E W Scripps Co, Hearst Newspapers, Journal Register Co, Lee Enterprises; and MediaNews Group Inc.

The newspapers in the consortium comprise major market dailies like the Atlanta Journal-Constitution, The Commercial Appeal (Memphis), The Dallas Morning News, The Denver Post, The Florida Times-Union, Houston Chronicle, The Miami Herald, New Haven Register, Rocky Mountain News, S Louis Post-Dispatch, The Sacramento Bee, San Francisco Chronicle, San Jose Mercury-News, and The Tampa Tribune.