Newspapers better off in search engine deals than alone

Posted by Lindsay Berrigan on April 18, 2007 at 2:54 PM

Though Yahoo could benefit greatly from its recent deal with 12 large newspaper companies, media analysts and newspaper executives alike agree that papers will be better off, and may even save falling ad revenues, with this partnership.

As newspapers lose classified ad revenue to the Internet, the deal, which includes second-largest US publisher McClachy Co., aims to fix that. The deal will work in two stages. In stage one, newspaper websites will replace online employment ads with links to Yahoo’s HotJobs, where their ads will be listed. Then, newspapers and Yahoo will jointly sell online ads, expanding to real estate and auto, and share the proceeds.

McClatchy Co. will not participate in the first stage, as it is a minority partner with Gannett Co. and Tribune Co. in CareerBuilder, but is involved for stage two alone. “This is where the momentum is,” McClatchy CEO Gary Pruitt said of Yahoo.

“In other words,” wrote Follow the Media’s Philip Stone, “even though publishers are now going to have to share classified revenues with Yahoo, at the end of the day they will be better off than if they had continued to go it alone.”

Source: Follow the Media through Ifra Executive News Service