176 Newspapers to Form a Partnership With Yahoo
A consortium of seven newspaper chains representing 176 daily papers across the country is announcing a broad partnership with Yahoo to share content, advertising and technology, another sign that the wary newspaper business is increasingly willing to shake hands with the technology companies they once saw as a threat.
In the first phase of the deal, the newspaper companies will begin posting their employment classified ads on Yahoo’s classified jobs site, HotJobs, and start using HotJobs technology to run their own online career ads.
But the long-term goal of the alliance with Yahoo, according to one senior executive at a participating newspaper company, is to be able to have the content of these newspapers tagged and optimized for searching and indexing by Yahoo.
In that way, local news — one of the pillars of the newspaper business — would become part of a large information network that would increase usefulness for readers and value to advertisers.
“Now the industry has religion about the Internet, based on what has happened to the business in recent years,” said the executive, who declined to be identified because he was not authorized to speak for his company. “So there is a lot more genuine enthusiasm today.”
The agreement could also come at an opportune time for Yahoo, which is seeking to regain the confidence of investors and the luster it has lost with some marketers.
The deal could also help position the company as a willing partner for traditional media companies, an effective counterpunch to a deal its archrival, Google, signed with 50 papers a few weeks ago, and could help it capture a larger portion of the fragmented local advertising market.
For the newspapers, which have struggled in recent years as readers and advertisers have flocked to the Internet, the deal represents an effort to earn a greater share of the fast-growing amount spent online on all types of ads.
“There has been a big question asked for a while as to how newspapers will navigate the online future,” said William Dean Singleton, vice chairman and chief executive of MediaNews Group, one of the members of the consortium. “I think this is the answer to that question.”
The consortium includes the MediaNews Group, Hearst, Belo, E. W. Scripps, the Journal Register Company, Lee Enterprises and Cox Enterprises. The group owns newspapers in 38 states, among them major metropolitan dailies including The San Francisco Chronicle, The Dallas Morning News, The Atlanta Journal-Constitution and The Denver Post, with a combined daily circulation of 12 million.
Financial terms of the deal, which is to be announced today, were not disclosed. Details of the HotJobs portion of the agreement were first reported on Saturday by The Wall Street Journal.
The agreement grew out of the existing partnership with HotJobs by MediaNews and Belo.
During the next year, the partnership will be extended as newspapers begin displaying their news articles and local ads on Yahoo’s online network.
Yahoo, in turn, will make available local event listings, maps, search technology and other content and tools on the newspapers’ Web sites. Yahoo will also use its technology to help newspaper sell online ads.
The arrangement “gives us the ability to monetize our content, an ability that we have not had great success with in the past,” Mr. Singleton said.
The deal comes on the heels of Google’s announcement that it will use its technology to sell ads in the print editions of 50 major newspapers, including The New York Times, The Washington Post and The Chicago Tribune. And it comes at a time when competition for the lucrative market for classified ads, which newspapers used to control, is intensifying.
But the significance of the partnership, according to some newspaper executives, extends well beyond classified ads. They see the announcement as the most ambitious collective effort by the industry to deal with the Internet since the New Century Network of a decade ago.
The New Century Network collapsed in 1998, less than three years after formation. At the time, competition from the Internet had not developed as quickly as feared, and the companies went their separate ways.
For the newspaper industry, the worries of the 1990s have come to be realized a decade later.
“Newspapers now fully recognize that the Internet is a threat, and this is a way for newspapers to try to preserve their franchise, with a partner that has huge online distribution,” said John Morton, an independent newspaper analyst.
The willingness to work closely with Yahoo, Mr. Morton noted, is in stark contrast to the reception Microsoft got in the 1990s when it started its local Web service, Sidewalk. Microsoft sought the cooperation of local newspapers, but they refused. When Microsoft realized how expensive it would be to develop its own local content, it shut down the venture.
“Local newspapers have always felt that their core strength was their local content, and they have traditionally been very protective of it,” Mr. Morton said. “This reflects a change in that thinking, and the realization that newspapers need to change.”
Despite its position as the No. 1 online destination, with some 131 million users in the United States and 400 million worldwide, Yahoo has struggled with many problems in recent months.
In particular, it has faltered in its competition with Google as a search engine, and has been challenged by the growing popularity of sites like MySpace, which offer an inexpensive way for advertisers to reach a broad audience. Yahoo shares are down more than 30 percent this year.
The alliance “plays right into the strategy of wanting to be the largest and most comprehensive ad platform out there,” said Sue Decker, executive vice president and chief financial officer of Yahoo. “We believe that the way to achieve that objective is to partner with great brands.”
Yahoo executives emphasized the importance of the local and classified advertising market, which they said is expected to grow to $12.4 billion by 2010, from $3.4 billion this year.
“There is significant opportunity to materially grow local advertising,” said Hilary Schneider, a former executive for Knight Ridder who recently joined Yahoo as senior vice president for marketplaces. Ms. Schneider is responsible for an array of Yahoo sites that include autos, real estate and jobs, and the three largest classified categories.