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176 Newspapers to Form a Partnership With Yahoo
John Marshall Mantel for The New York Times, left; George Frey for The New York Times
Terry S. Semel, left, chief of Yahoo, which is trying to regain its luster. Dean Singleton, the chief of MediaNews, said the
deal would help newspapers earn money online.
By MIGUEL HELFT and STEVE LOHR
Published: November 20, 2006
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 Yahoos 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.
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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 Yahoos 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 Googles 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.
That effort to form a network of newspaper Web sites and sell online ads spanned nine
companies, including The New York Times Company, The Times Mirror Company, The
Gannett Company and Knight-Ridder.
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
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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.
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