From the New York Times and Yahoo: Yahoo has announced a partnership to share news and advertising content with 176 US newspapers. Several newspaper publishers are included, including Belo, Cox, Hearst, MediaNews and Scripps. The largest newspapers in the deal are the Atlanta-Journal Constitution, Dallas Morning News, Denver Post, San Francisco Chronicle and the Los Angeles Daily News. The deal covers 38 states and a combined daily circulation of 12 million readers.Google had announced an advertisement placement deal with 50 US newspapers earlier this month. Local advertising is a fragmented market, with national and regional advertisers exerting more pressure on small newspapers for simplified media purchasing and consolidated reporting.
The new Yahoo agreement started with an existing deal among HotJobs, Medianews and Belo. HotJobs is owned by Yahoo, and holds a 9% market share among online job sites. CareerBuilder and Monster.com are virtually tied for first place with 32 and 31 percent shares respectively.
The newspapers will use Yahoo’s technology and content to place ads, maps, calendars, local listings, and search features on their own web sites. News stories from the local newspapers will be posted on Yahoo, and local newspapers will have access to Yahoo’s news content.
“The bottom line is that these newspaper companies have decided to answer the ‘friend or foe’ question that all traditional media companies face regarding online players,” wrote UBS analyst Brian Schachter. “They have decided it is better to be friends with Yahoo.”
This is an interesting business model that has already failed in earlier attempts. Yahoo may be able to learn from other companies’ mistakes.
An earlier attempt by newspapers to form an Internet alliances failed after three years. The New Century Alliance was formed by the New York Times, Times Mirror, Gannet and Knight-Ridder in 1995 as an early entrant in online news content and advertising. The owners dissolved New Century in 1998, before Yahoo, Google and other sites found their online news audiences.
Microsoft also attempted to develop its own local content sites in the 1990s. Sidewalk bled cash as Microsoft struggled with establishing relationships and branding in major US cities.
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